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You are here: Home / Archives for optionality

492: The Power of Optionality: Small Bets, Big Payoffs

September 4, 2024 by David Stein · Updated September 20, 2024

In this episode, we explore the concept of optionality—how small, strategic decisions can lead to outsized rewards with limited downside risk. From ancient philosophy to modern financial strategies, discover how recognizing and seizing options can unlock opportunities in both life and investing. Topics covered include: How call and put options work The difference between American and European style options and why it matters Why options are positively skewed Examples of using … [Read more...]

Filed Under: Podcast Tagged With: call options, optionality, options, options writing, put options

268: How To Better Manage Risk

September 11, 2019 by David Stein · Updated May 20, 2021

What are the three steps to better manage risk and get what you really want. In this episode you’ll learn: Why goods and services that lessen risk tend to cost more.What is the three-step process for assessing and managing risk.Why defining the risk-free option or asset is critical to managing risk.Why immediate annuities are the retirement risk-free option rather than a conservative investment portfolio.What are the two types of risk and how do we mitigate them.What is the … [Read more...]

Filed Under: Podcast Tagged With: hedging, idiosyncratic risk, insurance, optionality, risk, risk management, Schrager (Allison), systemic risk

164: Optionality—When To Keep Your Options Open and When To Commit

July 12, 2017 by David Stein · Updated March 12, 2024

How to use the asymmetric payoff of options, trial and error, and commitments to better yourself financially and in other areas of your life. Photo by Alexandre Chambon In this episode you’ll learn: Why the asymmetry of options is their most valuable characteristic. Why option holders don't care about the average outcome. The importance of trial of errors. How commitments lead to less options but higher growth. Show Notes Story of Thales of Miletus by Aristotle in … [Read more...]

Filed Under: Podcast Tagged With: Aristotle, Desai (Mihir A.), optionality, options, Taleb (Nassim Nicholas), Thales

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