Right, I’m saying there is a conflict between these two facts that I don’t know how to resolve.
Ah, you’re saying that because a lot of funds sell OTM calls no matter the price, you’d expect the returns to be positive.
I think the explanation is just that there’s an even larger group of people who buy OTM calls due to lottery-ticket biases, and this effect wins.
Hmm, maybe. Do you know who does this? Is this retail investors?
Right, I’m saying there is a conflict between these two facts that I don’t know how to resolve.
Ah, you’re saying that because a lot of funds sell OTM calls no matter the price, you’d expect the returns to be positive.
I think the explanation is just that there’s an even larger group of people who buy OTM calls due to lottery-ticket biases, and this effect wins.
Hmm, maybe. Do you know who does this? Is this retail investors?