Retail investors are losing billions buying stock options
The latest fad is contracts with just hours left before expiration
Not long ago trading in American stock options was limited mainly to professional investors. Options are contracts that provide the right to buy or sell a security at a specified price over a fixed time period. They can deliver big payouts if a stock moves in the desired direction, and expire worthless otherwise. Sophisticated buyers use options to hedge against risk, generate income or as a form of leverage. However, options can also be used to gamble.
This article appeared in the Graphic detail section of the print edition under the headline “No good options”
From the March 11th 2023 edition
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