sellers should have an edge because in general they are smart people working for finance companies whereas buyers are in large part dumb retail investors who just want a 1000% gain with no idea of the probabilities however sellers can get screwed by insiders...
Insiders vs non insiders, whatever your idea of dumb or smart people is, or whomever someone or some people work for has zero effect on edge. Both sellers of options and buyers can get screwed by different events in the market whether theyâre related to inside events of not.
I'm not too sure about whether there is an intrinsic hedge either way. Heck much smarter people than us have spent time on this and the fact that there is no consensus among people here is a testament to that. Obviously no-one can predict in advance what is going to happen to any given stock and there is always a price at which a buyer and a seller will agree otherwise there would be no market. Obviously both of them think that they have the hedge at that point. Providing they are both intelligent and logical of course. So my point is: in the end it doesn't matter if there is an hedge on one side or another because in any market there will be price that would make it acceptable to take the risk, buying or selling. The transaction premium is supposed to cancel out the hedge in an efficient market. (That is not a testament to whether or not I think the market is efficient).
<<< (That is not a testament to whether or not I think the market is efficient). >>> You may have just initiated a new debate on a new topic!
Sellers have the edge. Also, black swans are a mathematical fairytale, that only exist in books. Dackster.
More than a thousand posts on this topic in the thread: "Writing options for a living" http://www.elitetrader.com/vb/showthread.php?s=&threadid=53037