This is not correct. Stock options can decrease volatility and serve as insurance against large increases or decreases. That is the point of hedging.<p>For example if I have 100 shares of AAPL @108 and I&#x27;m nervous of it dropping below $80 in the near future, I may buy a MAR16 put option at $90&#x2F;share for a few pennies in the hopes that if the stock does actually decrease to a level that makes me feel uncomfortable, the options will increase enough to offset the stock loses.<p>So they very much can be insurance. It just depends on how you play them.