For all practical purposes, I think all these points (BigShort's included) are moot. Many parallels exist between option contracts and insurance contracts and I don't think there's any problem using familiarity with insurance to better understand options. This is also not to say you can't go bust doing either one. One of the bigger objections I have is when I hear people calling it an ATM machine.
Wanna address them one by one? I do not perceive them as moot at all, FWIW. There is a massive difference between actuarial risks and systematic risks, even if you don't get into the actual mechanics.
*Solely* to point out just one example that disproves that, and definitely not an endorsement of Ross Cameron or his service: From the "Is this real?" thread in the General Topics/Wall St. News forum here: I don't even understand why you'd make such a broadbrush statement. And I can think of a number of logical reasons why someone would charge for their mentoring or service, even if they're a profitable trader. Or am I misunderstanding your post?
One possible exception would the the pump-and-dump guys who make recommendations on obscure securities, after having front-run them with their own trades. Then sell before the "target" price or announced sell signal. In those cases, they extract more from the market because they are "mentors".
Let's see. @TheBigShort s main argument is that most of the insurance contracts underwrite highly idiosyncratic events, such as fires, deaths or car accidents. The sheer diversity of their pools mitigates their risks and they can further mitigate it by laying it off to reinsurer companies (who, in turn, have even more diversified books). On this other hand, a stock option is a combination of the company risk with the market risk. Market risk is systemic in it's nature and it's impossible to diversify away. In fact, one can argue that company-specific risks are efficiently priced while the market risk is rich by nature (e.g. that's why dispersion works). My argument is that insurance price is dictated by a cartel of providers and that naturally creates pricing that's favorable to them. An options market has steady two-sided professional flow so by and large it's going to be efficiently priced. Of course, there are some pockets of inefficiencies, there are forms of risk aversion specific to various players and, finally, there are regulatory pressures, but all of these are secondary to the market flows. Last but not least is mark to market. An insurance provider is not required to post more capital as the risk of his positions increases. In fact, their standard approach is to keep no more than the regulatory reserves and invest the balance into all sorts of risky assets. An option seller has to be comfortable with the MtM fluctuations, even if the actual event is extremely unlikely.
If you're referring to Ross, I've seen people who've at least claimed that they verified his entries/exits by comparing his recordings and matching them up to T&S. It's not an exercise that I care to do personally -- again, I don't have a dog in that fight either way -- but that seems like one possible way to verify that. Maybe the accusation that "sticks" more, and would be harder to prove/disprove is that he's benefiting from his subs' volume, given that novice traders especially will often blind-follow, hesitate and chase -- even when counseled not to. And so the accusation goes, the subs will help push/hold the stock up and also provide more liquidity for him to sell into. There are also some non-momo-type traders with trading services out there who I'm personally pretty confident are legit profitable... but it's hard to prove that to everyone's satisfaction, and you end up fighting a battle that you don't have any real stake in to begin with, while also looking like a "shill" -- so why bother? And who knows... short of being able to see their trade platforms live and their actual trade statements -- maybe I'm being fooled?