Isn't stock investment making you part owner of the company?
While playing in the options trading is gambling with the big companies as they are both on the same side betting on the players speculating where the market price goes. It's a rigged game in which they are the house that wins all the time. There was even a report about trading platforms selling thier order flow data which they make more money out of it than providing trading services.
Yes that's why I said "almost". However, the company can always go bankrupt and your share's value can go to zero or lower than what you bought. You buy a stock because you want it to go higher against the dollar. When you do options, the same logic applies. What you want is always more USD.
You just have to be on the right side of the trade to make them work.
And no, stocks don't always go up. Paypal was $300 6 months ago, now it is trading at $188. You may own the stock, but if you bought at $300, right now you are holding a negative position. It may never recover and make a new ATH. Nobody can guarantee it. Was it gambling just because you bought at $300? No it was just a bad investment.
What I meant is that if the investor is just on the spot market, he wouldn't lose all his funds after the price goes in the opposite direction. On the spot, even when the price hit its bottom, his investment can still be withdrawn although he loses a percentage of it. He didn't lose it all. Buying $300 means you lose all of it in the options trading executing in the hourly chart but he'll not lose it all in the spot market.
Well, I think the term "gambling" is wrong to describe the activity? Instead of calling it gambling, it should be a much riskier option compared to spot trading no? Well granted any type of investment that one just willy nilly enters is gambling in itself, but if it isn't, then comparing the two, options are simply riskier and that's about it.
Around 39 million options contracts have changed hands on an average day this year, up 35% from last year and the highest level ever, according to Options Clearing Corp. data as of the end of November.
Regulators worry is that companies like Robinhood and Ameritrade easily approve users to gain access to options which makes the surge of these new gamblers. Retail investors are also enticed to join this frenzy because leverage is quite high while zero transaction fees.
Honestly, I don't even see the issue here, pretty sure that they know what they're getting into, whether it be spot, options, futures or whatever, investing means accepting the fact that you can lose whatever you invested in. Trading is a zero-sum game, people win, people lose.
The issue is that options trading is rigged because the platforms are just betting against these gamblers and they are on both sides of the game.