alt Hacker NewsI know, but I think that they're overwhelmingly used for glorified gambling.
It wouldn't bother me if it was just hedge funds or big corporations or multibillionaires who played with contracts, it bothers me that regular people do it too, and the average John Doe simply doesn't have the same multi-million-dollar option pricing algorithms that Goldman Sachs does. At that point, it feels like it's big corporations leeching money away from poorer people who don't know better.
Full disclosure, I do play with options occasionally, but I have mostly stopped, and I treat it like a casino, or as you mentioned to hedge against risk.
Most of the volume of options trading is done by institutions. By price it's mostly large traders paying each other to mitigate risk. Some smaller traders are getting chewed up in the process, but they are throwing themselves into the machine.
You make it sound like options exist for large traders to profit off individuals with access to less information. That's not how options are primarily used. That is however how sports betting is primarily used.