Index   • 307
C
CAGR (compound annual growth 
rate), 46
Call options (calls):
BSM cone for, 50–55
buying, for growth, 22
covered, 240–248
defined, 11
delta for, 151
dividend arbitrage with, 292–293
leverage with, 167–168
on quotes, 145
short, 14, 221
tailoring exposure with, 24
visual representation of, 12–16
and volatility, 68–74
(See also Covered calls; Long calls; 
Short-call spreads)
Capital:
investment, 183–184
strategic vs. working, 297n1 
(Chapter 4)
Capital asset pricing model (CAPM), 
88, 298n4
Capital expense, 80
Career risk, 263
Cash, hedge size and, 257
Cash flows:
on behalf of owners, 80–82
expansionary, 82, 104–108 
in golden rule of valuation, 77
present value of future, 87–89
summing, from different time periods, 
87–89
(See also Free cash flow to owners 
[FCFO])
“Catalysts, ” 137
CBOE (see Chicago Board Options 
Exchange)
Central counterparties, 8
Change (option quotes), 146–147
Chanos, Jim, 202
Chicago Board Options Exchange 
(CBOE), 4, 8, 47
Chicago Mercantile Exchange, 8
China, joint ventures in, 84
Cisco Systems, 299n6 (Chapter 5)
Closet indexing, 133
Closing prices:
change in, 146–147
defined, 146
Collars, 258–262
Commitment, counterparties’ , 211
Commodities, options on, 6–7
Companies:
with bimodal outcomes,  
277–278
drivers of value for (see Value 
drivers)
economic life of, 82–86, 93–94
economic value of, 137–139
operational details of, xiii–xiv, 
110–111
Complex investment strategies, 142
Compound annual growth rate 
(CAGR), 46
Condors, 27–28
Confidence, accuracy vs., 119–121
Contingent loans, call options as, 
167–168
Contract size, 146
Counterparties:
central, 8
commitments of, 211
for options contracts, 295n1 
(Chapter 1)
Counterparty risk, 7–8
Covered calls, 23, 240–248,  
301n4
about, 241–242
BSM cone, 240–244
execution of, 242–245
pitfalls with, 245–248
with protective puts, 259–262
Covering positions, 219, 228
Cremers, Martijn, 133
C-system, 115–118
Customer “flow, ” 299n5 (Chapter 6)