logoalt Hacker News

qurrenyesterday at 9:17 PM5 repliesview on HN

Depends on what you ask. It's pretty easy to get wrong information.

e.g. search for "how do you make money with options"

Google's AI says

"When you buy a Call, you are betting the stock price will go up. When you buy a Put, you are betting it will go down."

Wrong right off the bat, because it ingested a whole bunch of get-rich-quick bull on the internet. The correct version is that if you buy a call you are betting the stock price will go up more than the market expects it to.


Replies

al_borlandyesterday at 9:55 PM

I tried this search. It gave a write up about buying and selling options, noting that the price of the stock had to move significantly, not just go up or down. It also talked about vertical spreads and iron condors. It touches on delta, theta, and volatility and their impacts, as well as leverage risk and potential uncapped risk.

While I agree that AI gets things wrong a lot, and someone should read significantly more before getting into actually trading options, this does give a decent overview to give a layperson an idea of what they are, and some key terms on what to look for if they want to dive deeper. That said, with this info alone, there are some sharp edges that would leave the person open to unnecessary risk if they went on this information alone.

show 2 replies
9devyesterday at 9:58 PM

Is that really categorically wrong, or is it a correct-enough explanation for laypeople looking for a one-sentence answer?

show 2 replies
ddalexyesterday at 9:26 PM

In fact, more then what the call seller expects, not the market.

apsurdyesterday at 9:30 PM

This is the problem with teaching and learning. Everything is wrong to some extent. I used to be this way but I don't have a better approach.

Newtonian physics is actually wrong, the founding of any country will be wrong, biology is wrong, nutrition is wrong… what can we even teach? what should we teach in this lens? serious question.

show 1 reply
tick_tock_ticktoday at 1:20 AM

Honestly Google's AI answer is about as right if not more right then your answer.

You can easily make money buying a call without the stock price moving a single cent (IV increases). Funny enough the stock can even go down and with a large enough IV increase you still make money.