310  •   Index
Gross domestic product (GDP), 104–108
Growth:
buying call options for, 22
nominal GDP , 104–108
revenue, 92, 97–99
structural growth stage, 94, 95
H
Hedge funds, 132–134, 136
Hedge funds of funds (HFoF), 134
Hedges:
reinvesting profit from, 254–255
size of, 255–258
timing of, 252–254
Hedging:
planning for, 255–258
for portfolios, 251–252
Herding, 138, 299n1
HFoF (hedge funds of funds), 134
Historical volatility, 60
Hostile takeovers, 110
The Human Face of Big Data (Rick 
Smolan), 114
I
IBM, 224–230, 299n5 (Chapter 5), 
301n6
Idiosyncratic assets, 272
Immediate realized loss (IRL), 180, 183
Implied volatility:
bid/ask, 149–151
changing assumptions about, 60–64
and short puts, 216–217
Income, selling put options for, 23
Indexing, closet, 133
Insurance, 5, 250
Insurance companies, 135, 136
Intel, 175
Interchangeable assets, 272–273
Interest:
calculating, 303n2
options and payment on, 168
prepaid, 170
Interest rates, 67
In-the-money (ITM) options:
calls vs. puts, 27
covered calls, 242
defined, 13, 16, 17
investment leverage for, 170–172
levered strategy with, 176–180
long calls, 189, 193–197
long diagonals, 236
long puts, 204
managing leverage with, 183–184
and market risk, 263–264
pricing of, 56–59, 150
protective puts, 249–251
short puts, 213–215
short-call spread, 222, 223
time decay for, 66–67
Intrinsic value, 56–59, 171
Investing level and efficacy, 92,  
103–108
Investment capital, leverage and, 
183–184
Investment leverage, 163–185
from debt, 165–166
defined, 164
managing, 183–185
margin of safety for, 197–199
measuring, 169–173
from options, 166–168
and portfolio management,  
196–197
in portfolios, 174–183
unlevered investments, 164–165
Investment phase (investment stage), 
86, 93–96
Investors:
activist, 110
risk-averse, 123, 125–127
risk-neutral, 124–126
risk-seeking, 123, 125–127
IRL (immediate realized loss),  
180, 183
ITM (see In-the-money options)