Optionality

Optionality is holding the right to act without the obligation to — a position with a capped downside and an open-ended upside.

Building optionality means positioning by:

1. Paying a small, known cost to keep a large, unknown payoff available.

2. Refusing commitments that cap the upside while leaving the downside open.

3. Exercising only once the payoff is clear, and letting the rest expire.

Pay small to stay in the game, and let the asymmetry do the rest.