Re:Robinhood’s big gamble
by zachrip on Wednesday May 19, 2021 @01:41PM
(#27211868)
Making things easier to understand does not mean the person doesn't understand it. Just because adults struggle to understand common core math, doesn't mean kids aren't just as capable of solving an equation. Options don't need to be confusing and I actually find RH's educational material and examples pretty good to get a basic understanding of how they work.
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Disclaimer: I haven't used RH.
However, if the person you're responding to is correct about their UI it's negligent. The price of an option does not vary only with whether "you think the price will go up". Essentially it's mis-representing an option as a delta trade which it isn't.
yah, the problem is in the invitation to make a serious mental model mistake on how options are valued, how they pay off, and what the hidden pitfalls are.
i’m all for democratizing access to (and the returns from) equity markets, but this isn’t about building wealth through long-term investing, or even about price discovery. it’s sharks looking to part small-time gamblers from their money.