- Futures and Options Basics - Fundamental Concepts
and Market Conventions
- What are futures and options?
- Who are the market participants?
- Futures and options market definitions
- The futures and options market today
- Why Trade Futures and Options? - City Players
and Investment Strategies
calculations
- Speculating
- Hedging
- Arbitrage
- The Various Components of an Options Contract
- Long vs short positions
- Open vs close positions
- Option buyers vs option sellers
- Contract specifications
- American and European style options
- What are the Different Types of Options?
- Share (stock) options
- Equity index options
- Foreign exchange options
- Interest rate options
- Bond options
- Options on futures
- Commodity options
- Futures and Options Valuation - The Determinants
of an Options Price
- Intrinsic value and time value
- Underlying price
- Strike price
- Volatility (historical, implied and forecast)
- Time to expiration
- Dividends
- Interest rates
- In-the-money, at-the-money and out-the-money
- Understanding Option Valuation - Option Pricing
Models
- The Black-Scholes model
- The Cox-Ross Rubinstein Binomial model
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- Risk Management, the Price Sensitivity of
Options and the Greeks
- Introduction to option risks
- Delta hedging - understanding delta risk
and the hedge ratio
- Gamma - interpreting gamma
- Vega - valuing and using implied volatility
- Theta - option time decay
- Rho - interest rate sensitivity
- Understanding the interaction of the Greeks
- Basic Option Strategies and Position Risk
Profiles
- Risk-return profiles of basic option strategies
- Straight orders
- Call and put options
Case study: Basic option strategies profit
and loss calculations
- More Complex Option Strategies and Position
Risk Profiles
- Risk-return profiles of more complex option
strategies
- Call and put spreads
- Strangles and straddles
- Butterfly and calendar spread
- Conversion/reversal
Case study: Basic option strategies profit
and loss calculations and loss calculations
- Making Futures and Options Orders
- The different types of options orders
- How to make an options order
- Buy and sell orders
- Market and limit orders
- Spread orders
Case study:
The process of a buy and sell order
The process of spread orders
- Exercise and Assignment
- Owners exercise and writers are assigned
- Margining
- Commissions and taxes
- Clearing and settlement
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