Apple Tree Fund uses options in a similar manner as an insurance company sells its insurances.
But options are also too well known for a far riskier usage. And that has become more popular at a fast pace in the past few years.
The zero-day options mania reached new heights in 2024, driving broader options trading toward an all-time high. New data from SpotGamma highlights the explosive growth in this market. Approximately half of all trading in Nvidia and Tesla options—some of the most popular trades—has been concentrated in bets expiring within five days, according to the data provider.
The surge in these trades—boom-and-bust bets that expire in just hours or days—lies at the heart of a rise in compulsive gambling in financial markets.
The WSJ interviewed individuals who shared their struggles with the irresistible urge to bet in financial markets, including options, crypto, and stocks. Many of them said they found short-dated options particularly addictive.
Source: Options Clearing Corp, SpotGamma, Valerie Noel
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