Options degenerates traders like those that got popular during the GME saga spend a little bit of money buying contracts that pay out if a stock takes a big swing. Well, in all transactions there's a counterparty, in this case someone who sells the contracts to make a little bit of money but without the risk. The neologism for options sellers is 'theta gang' because they make money as the contract approaches an expiration date (this movement is called 'theta').
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CoverStar Wars: Squadrons and covered calls 101. |