I agree. One could get the same results and the same p&l distribution by selling deep out of the money index puts, same difference. Make money every month for 5 years, lose it all in one day. This circus has been around for decades. There are tons of stupid ways to do this. Sell expensive upside calls in grains. Hey, droughts rarely happen. Sell upside calls in oil, we have plenty of that right? Sell upside calls in natural gas, hey spikes are rare right? All playing on the same theme. Retail trader doesn't know how to trade. Looks for easy money. Loves the positive feedback loop from selling monthly premium against rare events. Blows out his account. Goes back to work at his old sales job selling life insurance. And round and round we go.
But the payout is SO LUCRATIVE OMG!!! You can make like a year of profit in one shot writing those options if you get lucky! But yeah if you think about it, it's really like gambling. Make a windfall of money on one table again and again and again and then eventually lose it all back to the dealer in this ONE hand or even more and then one would want to keep betting again and again to try to earn them back and then eventually lose even more. The only difference I find between gambling in a casino and in the assets market is that you are able to hedge your bets in the assets market. I wonder if casinos allow hedging would make betting in casino more lucrative than betting in the assets markets? I guess it would depend on the potential profit vs. the cost of hedging and the effectiveness of hedging. Hmmmn...