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points by JumpCrisscross 4 days ago | 0 comments

> why doesn't the reasoning apply to stock market?

You have lots of recourse if you lose money through your stock broker. Kalshi, on the other hand, is less regulated than a casino.

[–] weird-eye-issue 4 days ago

That's not really true. It's very easy to start trading options and lose all of your money overnight. There would be no recourse

[–] JumpCrisscross 4 days ago

> It's very easy to start trading options and lose all of your money overnight. There would be no recourse

Of course there is. If the broker improperly evaluated your suitability to trade options, you'd be able to–at the very least–cost them tens of thousands of dollars in compliance costs. In all likelihood, a retail investor taking their broker to FINRA arbitration has even odds of prevailing.

[–] weird-eye-issue 4 days ago

If you answered the options questionnaire and placed the trades yourself, you have essentially no case. So in reality what you are saying is not really true for 99.9% of people that lose money on options

And even in the extreme case that you did file a claim and you were awarded damages it would probably be only for a fraction of what you lost

[–] JumpCrisscross 4 days ago

> If you answered the options questionnaire and placed the trades yourself, you have essentially no case

What are you basing this on?

[–] cowlevel 4 days ago

I lost a bunch (not all) of money in options after checking a box that said "enable options trading" and answering a few multi-choice questions about how they worked. Nothing happened to my broker.

[–] JumpCrisscross 4 days ago

Did you submit a written complaint and threaten escalation to arbitration?

[–] weird-eye-issue 4 days ago

FINRA statistics, common sense, and real world experience with options trading

[–] JumpCrisscross 4 days ago

> FINRA statistics

Sure. What are you looking at?

> common sense

There's your problem.

> real world experience with options trading

Did you ever take anything to arbitration?

For what it's worth, former options market maker here.

[–] weird-eye-issue 4 days ago

https://www.finra.org/arbitration-mediation/dispute-resoluti...

The number seems very small compared to the sheer number of retail investors that lose money on options and a lot of these don't even go in favor of the complaintant either.

Just to clarify I'm not talking about somebody doing some sort of complex options play that ends them up in debt when they are 17 years old or something like that.

I'm talking about the average case where somebody signs up for a brokerage account, funds the account, accepts the disclaimers and fills out the questionnaire to do options, is approved for level one, buys some call options, and they all go to zero. Why should they get their money back?