Optionality
Why is keeping the ability to act later sometimes worth more than committing to a position right now?
In plain words
Optionality is the value of not being fully committed, so that you can respond when more information arrives. It can mean holding cash, keeping a position small, or leaving a decision open rather than acting at the first opportunity.
Why it matters
Markets move in ways a single decision cannot anticipate. A trader who keeps room to act can resize, add, or step aside as the week develops; one who commits fully at the start must simply absorb whatever follows, including moves in both directions.
In a real week: BTC, week of 19 February 2018
In the week of 19 February 2018, BTC opened at 10375.01, rose to a high of 11786.01 on Tuesday, then fell to a low of 9274.8 on Sunday and closed at 9590.0, down 7.57%. The week's range was 27.08%, and the high came before the low. Committing fully at the open meant riding both legs; keeping capacity in reserve left room to act after the turn.
A common mistake
Treating optionality as simple indecision. Preserving the choice to act has a real cost: gains that would have come from committing early, and resources held idle in the meantime.