Hello all, I am a student who is learning options trading in class and have a quick question why options trading is a zero supply market. I am studing the optimal decision selections for call options. In particular, I am looking at an example of an American call option's values with constant strike price K =101 and maturity date 2 on the coupon bond. If a trader exercises suboptimally where the payoff in the following period is lower, why does someone who shorted the call option gains? Can someone please explain in layperson's term? I thought about this many times, but I lack the financial knowledge or experience to understand how this works. Someone who fails to exercise optimally on long call option allows the other side (short call option) to earn the amount the longer missed? I even read a WSJ article that was published few weeks ago regarding how SCC is compelled to do something about this. Sophisticated traders are taking advantage of "normal" investors who exercise suboptimally in ex-dividend situation. I understand the benefits sophisticated investors reap from this situation is not huge, but I still want to understand the principle on which the phenomenon depends. Thank you!!!