Sophisticated practitioners employ advanced techniques:
Option Stacking
Creating options on options multiplies potential:
Gregory stacked options: - Base: Technical expertise - Layer 1: Consulting option using expertise - Layer 2: Equity option in client companies - Layer 3: Board option from equity success - Layer 4: CEO option from board experience
Each layer multiplied previous value.
Synthetic Option Creation
Combining multiple positions can synthesize options:
Helen created synthetic options: - Long position: Deep expertise in emerging field - Short position: Automation of traditional role - Result: Option to transition when field matures
Her synthetic positions provided option-like payoffs without explicit options.
Option Arbitrage
Different people value options differently, creating arbitrage opportunities:
Ian arbitraged option values: - Acquired undervalued equity options from departing employees - Bought intellectual property from closing businesses - Secured rights to dormant technologies - Obtained licenses for unexploited territories
His arbitrage captured value from others' inability to exercise options.