TL;DR
A Reddit user flaunted $200k in Meta option gains, sparking envy and requests for tips. This classic survivorship bias case ignores the inherent risks of options trading, fueled by FOMO and potentially leading to disastrous losses for those who follow blindly.
Story
Imagine bragging about $200,000 profit on Meta calls as if it’s a sure thing. That’s what happened on Reddit, a social media site, in this particular case. A user posted a screenshot showing massive gains from Meta (formerly Facebook) options, acting like everyone could replicate it. This is a classic example of survivorship bias—only the winners shout, while those who lost stay silent.
How did they supposedly get those gains? Options. These are contracts letting you buy or sell a stock at a specific price later. It’s like betting if Meta’s price will go up or down. This person made a massive bet that paid off big time before Meta announced its earnings (financial reports). Like gambling, options trading can amplify gains… but losses too.
‣ Options: Contracts giving the right, but not obligation, to buy (call) or sell (put) an asset at a set price within a timeframe.
Other users congratulated them and asked for the next “hot tip.” Here’s the problem: What looks easy online is often complex and risky. Treating a single success as a roadmap to riches ignores how many people lose with options. Remember, we only see the winners. This bragging also fueled FOMO (fear of missing out), making others crave similar “easy” profits.
‣ FOMO: Fear of Missing Out – the anxiety that others are having rewarding experiences that you’re missing.
No one shared stories of those who bet wrong on Meta and lost everything. Think of the 2008 housing crash. Many thought housing prices would endlessly rise. They took risky mortgages they couldn’t afford. Then the bubble burst. Same principle here—options trading without understanding the risks can lead to financial ruin.
The comments section further illustrates this naivety. One user joked about “Step 1: Have $168k”—highlighting the privilege often underlying such wins. It’s like saying the key to winning a marathon is starting at the finish line! Without sufficient capital, the average person can’t take these risks, even if they understood them.
This isn’t unique to Meta or Reddit. Similar hype cycles happen with crypto and other assets. People follow “influencers” who flaunt wealth earned through opaque strategies. This leads to herd mentality and inflated bubbles, setting the stage for future crashes. Remember, if it sounds too good to be true, it probably is.
Advice
Don’t chase ’easy’ profits via options or similar hype. Understand the risks before playing with fire. Seek financial advice from qualified pros, not social media.
Source
https://www.reddit.com/r/wallstreetbets/comments/1ijgyl7/200k_gains_from_meta_thank_you_zuck/