I wouldn&#x27;t say there is any singular &quot;point&quot; to insurance such as &quot;decreasing volatility&quot;.  People buy insurance for multiple reasons.<p>If a couple buys &quot;trip insurance&quot;, it&#x27;s more about managing risk and uncertainty so they can sleep at night if their cruise ship is cancelled rather than smoothing over price volatility.<p>Also, I&#x27;d just read the parent&#x27;s quote about &quot;insurance&quot; as a <i>rhetorical device</i>[1] rather than some rigorous financial instrument.  The author thought of SOs as &quot;insurance&quot; against missing out on potential upside.<p>[1] both &quot;<i>insurance</i>&quot; and &quot;<i>lottery ticket</i>&quot; to describe stock options are analogies&#x2F;metaphors