The asset class that acts most like a lotto ticket

[garchbrooks]

Quote from Rearden Metal:

That's a pretty original idea- I do like how you think. Even though your 'options-lotto' customers could be getting better odds with you than with the state lottery, the bottom line is that I highly doubt your idea would be legally possible because there are stacks of disclosure/suitability forms that have to be filled out and signed at any brokerage firm before they let you trade options.

So I open the account in my name, but sell them to the rights to the proceeds from the transaction -- no laws violated, and it's not real lottery. So I can't violate the numbers racket, am in compliance with securities law, and can make a contractual agreement with purchases of my lotto tickets to get a portion of their income, but also promise them better odds than the lotto.

The only trick would be taxation. Maybe not do it in my name so much as a Lotto-Option LLC.

 

[rew]

Quote from drcha:

The expectation on all options trades is around zero. So many people here, including some of the pros, do not understand what expected value is.

I understand what expectation is. I also understand what a bid/ask spread is. Even if the mid-point price of an option is priced so that it's expected return is exactly 0, when an OTM option has a bid/ask of 0.20/0.25 and you buy at 0.25 your expectation is negative.