The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again at optionalpha.com and welcome back to the daily call. On today’s call, I want to talk about the striking similarities between options trading and insurance. I love talking about this, honestly. I think it's just honestly one of the best analogies that we can use to help educate people on how to trade options, why we do what we do, like why we setup our trades the way that we do, our portfolio the way that we do, we position size the way that we do and the edge that we’re trying to take out of the market. I think there are so many similarities between this and it’s obviously evident that generally, this stuff works because not only does Warren Buffett have huge stakes in insurance, but he’s also a very big-time option seller. He talks openly in his 10Ks and 10Qs for Berkshire Hathaway about the edge and implied volatility, the overstatement in implied volatility, all this stuff. You guys can all read about it. It’s all public information. When I think about the insurance business