In this episode of Wealth Building with Options, host Dan Passarelli dives into one of the most powerful – and often overlooked – forces shaping trading decisions: the endowment effect. This behavioral economics concept explains why we tend to overvalue what we already own, and why that bias can hold traders and investors back from making better choices.

Drawing on research from Richard Thaler and examples ranging from coffee mugs to Super Bowl tickets, Dan shows how the endowment effect plays out in real-world trading—especially when running strategies like the wheel, covered calls, and cash-secured puts. He explores how our brains are wired against discipline, why letting go of a position feels harder than it should, and how traders can use tools like the “Would I do it now?” rule to cut through bias.

From Catholic confessions to Chicago hot dogs, from historical revolutions to behavioral finance studies, Dan blends humor, history, and hard-hitting trading lessons into a thought-provoking conversation that will help you rethink how you value your trades.

What You’ll Discover in This Episode:

Key Takeaways:

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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