The Contrarian Predictive Power of Retail Option Trading

Discussion in 'Options' started by ETJ, May 30, 2023.

  1. ETJ

    ETJ

    The Contrarian Predictive Power of Retail Option Trading
    Larry Swedroe - WealthManagement.com
    Trading in equity options is attractive to individual investors because of its considerable embedded leverage and the opportunity it presents for lottery-like wins.
    The attraction exists despite the fact that there is now a large body of research (see here, here, here and here) showing that options trading, particularly the buying of calls, has resulted in the transfer of billions of dollars from the wallets of retail investors to the pockets of the market makers of those options. That explains all the commercials from broker-dealers touting their options trading offerings!
    /jlne.ws/3OINFAb

    To access links to the research go to the story.
     
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