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REDDIT

Why do so many people buy options instead of just investing in shares long term?

S
Jul 25, 2026 · 20:07

I'm still learning about the market, so this is a genuine question.

From what I've read, long-term investing in broad index funds or strong companies seems to almost always (please fact check me if I'm wrong) outperform most people over time with a lot less risk. On the other hand, buying options seems incredibly risky, especially short-dated contracts where you can lose 100% of your premium pretty quickly. Tons of people from numerous subs have mentioned that it's essentially gambling.

Yet options trading seems extremely popular online. All my friends (we are in our 20's) are obsessed with it. Is it mostly because people are chasing faster returns or are there legitimate reasons that the average retail investor should be using options?

I'm talking more about people buying calls and puts to try to make money, not using options to hedge an existing portfolio. I feel like for a lot of retail traders it ends up looking more like gambling than investing, so I'm wondering what I'm missing.