Are options traded inthe market offer as a free lunch to the customers??

Because we dont have to pay for the losses for the stock and if this situation arises we just incurr a loss of our premium, and when we earn capital gains we are eligible for the profits derived fro the deal.

CERTAINLY NOT because call option pricing is based on the volatility ,exercise price,returns on stock ,underlying assets,strike price.So after taking every factor into pricing stock options takes away all the free lunches and even if any arbitrage oppurtunity available those are taken up by the market scavengers(techincal analysts.)

Options can be very useful for hedging one's position unwanted fall in underlying assest prices.