...a Silver Ticket is an Option
An option is a kind of agreement where you have the right not the obligation
to some property for a specific time, for a specific price.
There are many kinds of options. Investors buy options on stocks that
give them the right to buy (called a "call") or sell (called
a "put") the stock at a particular price at or until a particular
The down payment on a house is another example of an option. A buyer
offers money to secure the right to buy a house for a certain price
by a certain time.
And perhaps most relevantly a ticket, such as a ticket to a movie or
play is also a kind of option. You pay your ten bucks and get the right
but not the obligation to sit in one of the seats and watch the movie
at the time of the presentation.
Advantage: Since it is a right and not an obligation the holder has
flexibility. If the situation changes the option holder can change their
plans to adjust to the new situation.
Advantage: Usually options cost only a fraction of the cost that it
would take to buy the actual property being optioned, which gives the
option holder leverage. For a smaller amount invested the option holder
has a limited but valuable right (and control) over a property.
Risk: Time is limited. Since the option expires at an agreed upon time
then the right must be acted upon or it is worthless.
Risk: They price of the underlying property may change in way that
costs the option holder. It may cost you more to buy the option and
then pay for the underlying property than if you had just bought the
property or some other property in its entirety to begin with.
So for the home buyer when they buy an option (put down the down payment)
to a single family home they have the advantage of changing their mind
if they inspect the house and discover that the plumbing is a disaster
and they can then perhaps get their down payment (option money) back
or at least only lose that small fraction of the cost of owning the
entire house (depending on the terms of the agreement). The risk is
that perhaps the homebuyer is not able to secure the rest of the money
needed to buy the house and so has to forfeit the down payment. Or,
perhaps, the homebuyer realizes that no one else wants to buy this house
and they could have bought it for much cheaper but if they don't pay
the price the agreed to the seller will sell the house to someone else
at half the price.
For the moviegoer it is the same situation. If they change their minds
about the film they were going to see they aren't forced to watch it
and can probably exchange their seat for another film if it is before
the start of the movie. They also save money because they don't have
to own their own movie theater or even to buy the DVD to see the movie,
they just have to show up. The moviegoer faces the risk of getting stuck
in traffic and missing the film because they are going to wait for his
just because he bought a seat to the viewing. They also might realize
that they could have watched another movie they wanted to see at home
for free and saved the cost of the entertainment.
Investors use options for to general reasons: to hedge risk and to
speculation on changes in price and circumstances for profit.
Worried about the risk of not getting a seat at an opening day of the
movie the moviegoer buys the ticket online to hedge the risk of showing
up to a sold out show.
Wanting to make a profit the scalper buys several tickets to the NFL
playoffs speculating that the tickets will sell out and so the tickets
can be resold for a profit before the day of the game.
The silver tickets are both a hedge and a speculation depending on
how you frame the various values of the ticket. The option value of
a silver ticket is one value to take into consideration.
For example the material value of the one ounce of .999 fine silver
that is in the ticket will fluctuate based on the current market price
While the option value of the money saved by owning a ticket, getting
into future shows at a discount and accessing special events depends
on the venues, the popularity of the work, and your opinion of the quality
of the work.