The breakout finance products of the past decade converge around a single design: a highly engineered lottery. Small, low probability bets with asymmetric upside. Narrative appeal so you can craft a story around your bet. Based on luck, but gives you an illusion of skill. Rapid feedback loops so you win or, more likely, lose money within hours.
In this post, I cover parlays, zero day options, and perpetuals: seemingly obscure products that have exploded in adoption to reach mainstream people.
Parlays
Sports betting adoption didn’t take off until FanDuel designed a lottery inside it. The most important invention in modern betting is the same game parlay: a single bet that combines multiple independent bets within the same game. Parlays transformed the user experience for casual sports fans. Now, fans can achieve lottery-style outcomes within a few hours of a sports game by betting something as small as five dollars to win a thousand dollars. They can craft a story behind the bet, giving them the perception of skill. When Dallas Mavericks owner Mark Cuban said that Russel Westbrook was not a super star, a sports fan could build a parlay around his revenge: Westbrook will answer the insult by scoring over thirty five points, have at least ten assists, and take his team to victory. Sports is reality TV for men; parlays keep them glued to their screens because now they have a stake in the outcome.
$150 billion was wagered on sports in 2024. Parlays contribute to two-thirds of sportsbook revenue and to the significant increase in hold, which is sportsbooks’ profit margin on all bets. Sportsbook hold has doubled from 6% when parlays were just introduced to over 12% today.
Parlays allow players to place a small bet for life-changing upside. But each leg of the parlay must be won for the player to win the bet, which drastically shrinks the odds. You would have a far higher probability of winning money if you placed all bets individually rather than placing a single parlay bet, but then the user has to click through and submit individual bets and won’t receive lottery-like upside. A parlay bet triggers a bigger rush.
Zero day options
Zero day options are short-term options contracts that expire within the same day. They were first introduced by the CBOE in 2005 but limited trading to once a week on Fridays. It was only in 2022 that trading expanded to all five trading days, which unleashed a massive boom in short dated options trading.
Zero day options rose from 5% of total options volume in 2016 to 61% by May 2025. Retail share of zero day options volume is a staggering 54%. Zero day options have low premiums and provide a lottery-like payoff since small moves in the underlying asset produce outsized P&L. You can also tie your bet to specific catalysts or events, which are easy to digest on social media. Speculation on whether “Trump will announce a new round of tariffs on China” or “Powell will cut rates” can help people craft a story on why their lottery ticket is a sound investment.
Post COVID, there was a massive boom in retail participation in the stock market: 30 million new brokerage accounts were opened in 2020 and 2021. This is more than double the total number of new brokerage accounts opened the decade prior. Retail consumers love zero day options, and brokerages like Robinhood love them more. Options were 26% of Robinhood’s revenue in 2024 with an implied gross margin of over 90%.
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