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Exploring selling 0 strike calls on time, shorting, and responding too quickly
Logan
March 06, 2025
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Exploring selling 0 strike calls on time, shorting, and responding too quickly
Happy Thursday! Thanks for reading Intentional Dollar — where we look at old money ideas through a new perspective.
What’s inside?
One idea to experiment with
Two quotes from others
Three questions to dig deeper
Four lines of poetry for the point
Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.
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One idea to experiment with:
Selling 0 Strike Calls On Time:
Deferring the important financial items on our to-do list is like selling a 0 strike call option on time. It’s “in the money” and as the day goes on, the hours pass, it gets real painful.
In fact, this may be the reason we miss out on financial progress; we are attempting to make the progress at the wrong time of day, the wrong way.
But shorting time feels good.
We collect some quick comfort premium so all seems well.
It’s not until we get to the end of the day that we feel the weight of the accumulated leverage. And it just keeps getting worse. We defer to the next day, and the next day to the next. We sell another call and repeat the loops.
On the flip side, we can be prudent investors and buy calls on time. Sure it’s a little painful shelling out the premium on the front end, but we own the entire upside of the day, week, and month.
Try flipping the script this week and buying time (doing the important tasks first thing in the morning) rather than shorting time (procrastination, deferral).
pay a little now or everything later
Two quotes on shorting:
Not worth it, don’t do it.
“Short selling, it’s an interesting item to study because it’s ruined a lot of people. It is the sort of thing that you can go broke doing…. Being short something where your loss is unlimited is quite different than being long something that you’ve already paid for. And it’s tempting. You see way more stocks that are dramatically overvalued in your career than you will see stocks that are dramatically undervalued. It’s the nature of securities markets to occasionally promote various things to the sky, so that securities will frequently sell for five or 10 times what they’re worth, and they will very, very seldom sell for 20 percent or 10 percent of what they’re worth. So, therefore, you see these much greater discrepancies between price and value on the overvaluation side. So you might think it’s easier to make money on short selling. And all I can say is, it hasn’t been for me. I don’t think it’s been for Charlie. It is a very, very tough business because of the fact that you face unlimited losses, and because of the fact that people that have overvalued stocks — very overvalued stocks — are frequently on some scale between promoter and crook. And that’s why they get there. And they also know how to use that very valuation to bootstrap value into the business, because if you have a stock that’s selling at 100 that’s worth 10, obviously it’s to your interest to go out and issue a whole lot of shares. And if you do that, when you get all through, the value can be 50.”
“We don’t short really much at all. It’s tempting for people to think that shorting is always a risk-reduction activity—that it is the mirror image of going long, and it just isn’t. If you go long, all you can lose is the money you’ve put up. If you go short, you can lose an infinite amount, and so we really are loathe to short.””
Three questions on responding too quickly:
Where am I making hasty decisions because I react too quickly?
What emotion underlies the decision? Fear, greed, desire to people-please?
What if I implemented a decision lag — T+1, +2, +3?
Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.
Four lines of poetry for the point:
The profit is yours when you engage right away
You own the upside, optionality on the day
But pressure builds when you sell short and defer
Comfort premiums hide painful downsides that occur
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Content ideas, questions? Reply to this email or reach out to me at [email protected]
Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.
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