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Glossaries

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TermDefinition
call option

A contract which gives the holder the right (but not the obligation) to buy a stock at a specified price (strike price) within a specified time period (before exercise date). A call option increases in value if the underlying stock increases in value.

Capital expenditures

A cash flow statement item which includes investments in property, plant and equipment, either for maintenance or growth purposes. Used to calculate free cash flow in the Discounted Cash Flow model.

Cash flow statement

A financial statement which depicts the actual cash inflows and outflows of the company.

Cash from operating activities

A cash flow statement item which indicates the amount of cash a company earns from its core, ongoing business activities.

covered call

An option strategy where you hold a long position in a stock while also writing (selling) call options to generate extra income from the option premium.



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