via economist:
Not long ago trading in American stock options was limited mainly to professional investors. Options are contracts that provide the right to buy or sell a security at a specified price over a fixed time period. They can deliver big payouts if a stock moves in the desired direction, and expire worthless otherwise. Sophisticated buyers use options to hedge against risk, generate income or as a form of leverage. However, options can also be used to gamble.
See also Unlike 2008, we have both a historically overpriced housing bubble AND stock market bubble.
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