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That's right.

The main issue with option is the lack of liquidity.

One may have to put down quite a bit of cash down in order to exercise, and that is a problem, even if in practice, it is usually good value for the option holder.

But most people either 1) do not have a lot of cash on hand, or 2) do not have the appetite to tie their hard-earned cash to anything illiquid-that-maybe-could-go-to-zero.



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