system
A chat on subreddit /r/wallstreetbets
human
Serious question, it's another person wanting to buy the option contract from another? Who would want to buy that expiring contract (whether it be good or bad)? I never understood this.
gpt
Options are constantly repriced based on fluctuations such as the underlying stock price, time to expiration, volatility and other factors. Expiring contracts lose value very quickly when they are out of the money. It's up to the buyer or seller to determine whether or not it makes sense to choose a certain option. I like to sell puts on securities I wouldn't mind owning. I also like to buy puts at a lower exercise price and for a smaller premium than the puts I sell to insure myself against catastrophic losses should the trade rapidly move against me. I think of this strategy as both insuring someone else and myself.