"Excluding the issuer of the underlying makes the market zero-sum whether it is option or stock."

I know this is a semantic argument, but I am still bothered a bit by this. I know this isn't going to come out right, but I will try and explain.

Buying or selling actual stock shares on the secondary market may net to zero financially, but there are also non-financial effects to companies of stock transactions on the secondary markets that do not exist in options markets.

Buying shares on the secondary market give a person a say (no matter how small) in the future of the company. Selling those shares, terminates any future say in the company.

I know that is a quaint view in this day and age where stock transactions are often looked at as more of a casino bet then as actual ownership of a company. But I still think the ownership matters. To take an extreme example, Warren Buffett has amassed stakes in companies by buying stock on the secondary market. It is hard to argue that his ownership of those secondary shares didn't have at least some influence on many of those companies.

To bring it back to Jim's original point. The trading of stock options (as he defines it) is not only zero sum financially, but zero sum non-financially as well. They are literal casino bets. Sure there are casino bets that are positive expectation and some (most) that are negative expectation, but a person making those bets is not adding anything productive to the world where a capitalist buying and selling stock shares (even on the secondary markets) is still doing something productive.