Behavioral Finance , textbook practice, reading 7, first question

Statement 2: (from a client): “When considering investments, I have always liked using long option positions. I like their risk/return tradeoffs. My personal estimates of the probability of gains seem to be higher than those implied by the market prices. I am not sure how to explain that, but to me, long options provide tremendous upside potential with little risk, given the low probability of limited losses.”

Answer: Statement 2 is consistent with prospect theory; the client is overweighting the probability of a high financial impact outcome (gains on options) and underweighting the probability of a loss (the option premium cost).

In my understanding, Option is low risk, high payoff risk, and investor is risk-seeking for gain. However, prospect theory demonstrates risk-seeking for loss.

Please someone help me understand it, thank you so much.

You could think of prospect theory in the case of a gamble with even chances to win and lose. If the amount of the possible win is at least twice the amount of the possible loss, people will choose to play because they overweight the probability of winning over losing.