Stock options gained popularity on Main Street this year as a growing number of retail investors started executing high-speed derivative trades, but most of them are playing a losing game given the lack of access to more complex strategies.
A record of 39 million options contracts have traded daily on average this year, rising 35% from 2020, according to Options Clearing Corp. Retail investors account for more than 25% of total options trading activity, due to easy access via commission-free online brokers, according to data from Alphacution Research Conservatory.
A staggering majority of these small-time traders are buying the most basic call and put options, which have a much lower probability of profit compared to advanced strategies
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