Why Trading Options is a Horrible Idea

11/07/2023 17 min

Listen "Why Trading Options is a Horrible Idea"

Episode Synopsis


Stay informed with our free disruptive technology investing newsletter, Nanalyze Weekly. Signup now at https://www.nanalyze.com/nanalyze-weekly/. This episode is pulled from a YouTube presentation. View the original presentation at https://youtu.be/rqp0yy_pr6s.

Trading options is a dumb idea, but most newbie investors don't know any better. Retail option trading has increased tenfold over the past decade as platforms like Robinhood encourage newbie investors to engage in risky behavior that does nothing but transfer wealth from people with no means to those evil hedge funds that everyone loves to hate. Academic research shows time and time again that retail investors who dabble in options, especially call options, are likely to consistently lose money over time. Oh sure, they'll have some winners, just like how a blackjack dealer doles out the occasional 21, but as in a casino game, the odds are fixed. Did you really think Joe Retail investors sitting around in his underwear buying some call options can really compete with generative AI algorithms that bested the world's top Go players? Academic research shows that retail investors consistently lose money despite what some muppet on YouTube is trying to tell you.