Comment on What will happen to large companies once poor people have no more money to use?
ralphio@lemmy.world 2 months agoEvery trade has two sides. Someone has to sell you the options contract. No one is out there selling “free money” contracts. Why wouldn’t they just give you the money and skip the song and dance?
To everyone else: please don’t trade options if you don’t understand them, there is no quicker way to drain your savings.
z3rOR0ne@lemmy.ml 2 months ago
I agree. I’m not saying its not without it’s risks, Options on individual stocks are pretty risky, but a call Option that follows the S&P500 over the course of 3 years? That’s a pretty safe bet. It takes a multi year US recession to lose that bet, and while certainly not impossible (we’ve obviously had a few of them over the past couple decades), but it’s the safest bet I’ve seen on Options.
I’m not advising people to do this, I’m using this scenario as an illustration to point out how making money on the US stock market is usually based off of mass speculation rather than any actual value made by people actually producing goods and services on the ground floor.