Index   • 315
Rolling, 200–201
Round-tripping, 148–149, 300n1 
(Chapter 7)
S
Safeway, 100
Schiller, Robert, 43
Scholes, Myron, 8–9
Secular downturns, 302n2 (Chapter 11)
Secular shifts, profitability and,  
101–102
Sell-side structural impediments, 
136–137
Settlement prices, 146
Shiller, Robert, 42
Short calls, 14, 221
Short diagonal, 238–240
Short puts, 211–220
about, 213–214
BSM cone, 212
covered calls and, 241–244
in long diagonals, 235–237
loss leverage with, 211–212
portfolio management with, 216–220
protective puts vs., 248–250
returns for, 245
strike price for, 215
tenor for, 214–215
Short straddles, 230–232
Short strangles, 231–232
Short-call spreads, 220–230
about, 221–222
BSM cone, 220
portfolio management with,  
228–230
in short diagonals, 238–240
strike price for, 222–228
tenor for, 222
Short-term trading strategies:
implied volatility in, 63–64
intelligent investing vs., 267–268
and market risk, 264–265
Slovic, Paul, 119
Smolan, Rick, 114
Solvency risk, 256, 263
S&P 500 (see Standard & Poor’s 500 
Index)
Special-purpose vehicles, 110
Spreads:
bid-ask, 147–149
short-call (see Short-call spreads)
SPX ETF , 251–252
Standard & Poor’s 500 Index (S&P 
500):
correlation of hedge funds and, 134
distribution of returns, 44–46
protective puts on, 252–254
Startup stage, 86
Statistical volatility, 60
Stock investing, xiii
choices in, 20–22
visual representation of, 10–11
Stock prices:
BSM model assumption about, 32, 
34–35, 40–47
directional predictions of, 68–74
of dividend-paying stocks, 35–36
predicting, with BSM model, 32–39
(See also Forward prices; strike–
stock price ratio [K/S])
Stock-split effect, 42
Stop loss, 229
Straddles:
long, 208–209
short, 230–232
Straight-line depreciation, 283
Strangles:
long, 26–27, 205–207, 209
short, 231–232
Strategic capital, 297n1 (Chapter 4)
Strike prices:
and BSM cone, 52–54
defined, 12
long call, 192–196
long diagonal, 236–237
long put, 203