3 ms·
There's no bell curve. Insurance is hedging against the value of something you have an interest in (which takes the form of a bet against that thing). Gamblin
by sdwr 2y ago
There's no bell curve.
Insurance is hedging against the value of something you have an interest in (which takes the form of a bet against that thing).
Gambling is betting on a thing.
So a short option on a stock (betting against it) would be:
a) insurance if taken out by the company, or a shareholder, or someone with stake in the business
b) gambling if done by a random third party
There's a moral component to the definition.
- kortilla 2y agoThere’s nothing moral. It’s gambling either way. The only confusion comes from people who bend over backwards to convince themselves they aren’t gambling because of weird “it’s a sin” morals that leak into their mind. Betting against a company by shorting has no different moral component than betting on a company by investing. Either way you aren’t doing work and are taking risk to get a higher return. Insurance products have different risk curves but they are still gambling. Someone can buy a ton of garbage houses, buy bunch of insurance, and just hope they burn down for the payout.