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Why Short Options

tasty Extras

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

By looking at a short option’s profitability in the long term, one may be led to the conclusion that there is an inefficiency in the market.

That is far from the truth.

The market is efficient, and what is being exchanged is peace of mind and limited risk for the option buyer in exchange for financial gains in the long run for the option seller.

This is similar to an insurance company; insurance companies sell "peace of mind" from financial disasters to insurance buyers, and in exchange, the buyer pays a premium to the insurance company.

Tune in as Tom and Tony explain this concept in depth.

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