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Options Trading (Advanced) Module Overview

 

Why should one take this course?

  • To have a comprehensive and broad based knowledge about the options markets.
  • To get acquainted with various types of options and options strategies

Who will benefit from this course?

  • Students
  • Teachers
  • Investors
  • Traders
  • Employees of brokers / sub-brokers
  • Anybody having interest in this subject

 

·

Options Trading (Advanced) Module Syllabus

 

Options – A Backgrounder

A. Derivative Types
B. Continuous Compounding
C. Option Valuation
D. Option Pricing Band
1. Upper Bound: Call Option
2. Upper Bound: Put Option
3. Lower Bound: Call Option
4. Lower Bound: Put Option
E. Put-Call Parity: European Options
1. Position A undervalued
2. Position B Undervalued
F. Put-Call Parity: American Options
G. Dividends

Quantitative Concepts – A Backgrounder

A. Normal Distribution
B. Share Prices – Lognormal Distribution
C. Linkages that arise from the Distribution
D. Volatility (s)

Binomial Option Pricing Model

A. Single Period Binomial
B. Multiple Period Binomial
C. European Put Option
D. Binomial Model for American Options
E. Role of Volatility in ‘u’ and ‘d

Black-Scholes Option Pricing Model

A. European Call Option
B. European Put Option
C. Dividends
D. American Options
· Option Greeks
A. Delta
1. European Call on non-dividend paying stock
2. European Put on non-dividend paying stock
3. European Call on asset paying a yield of q
4. European Put on asset paying a yield of q
B. Gamma
1. European Call / Put on non-dividend paying stock
2. European Call / Put on asset paying a yield of q
C. Theta
1. European Call on non-dividend paying stock
2. European Put on non-dividend paying stock
3. European Call on asset paying yield of q
4. European Put on asset paying yield of q
D. Vega
1. European Call / Put on non-dividend paying stock
2. European Call / Put on asset paying yield of q
E. Rho
1. European Call on non-dividend paying stock
2. European Put on non-dividend paying stock

Volatility

A. Historical Volatility (s)
B. ARCH(m) Model
C. Exponentially Weighted Moving Average (EWMA)
D. GARCH Model
E. Implied Volatility

Basic Option & Stock Positions

A. Payoff Matrix for Basic Option Positions
1. Long Call
2. Short Call
3. Long Put
4. Short Put
B. Payoff Matrix for Position in the Share
1. Long Stock
2. Short Stock
C. Assumptions
D. A Few Option Contract Intricacies

Option Trading Strategies

A. The Strategies
1. Single Option, Single Stock
i. Protective Put
ii. Covered Put
iii. Covered Call
iv. Protective Call
2. Multiple Options of Same Type
i. Bull Spread
ii. Bear Spread
iii. Butterfly Spread
iv. Calendar Spread
v. Diagonal Spread
3. Multiple Options for Different Types
i. Straddle
ii. Strangle
iii. Collar
iv. Range Forward – Long
v. Range Forward – Short
vi. Box Spread
vii. Condor
B. Option Chain
C. Contract Fundamentals
D. Option Trading Intricacies
1. Choice of Strike Price
2. Choice of Expiry
3. Roll Over and Covered Calls· Option Trading Strategies
A. The Strategies
1. Single Option, Single Stock
i. Protective Put
ii. Covered Put
iii. Covered Call
iv. Protective Call
2. Multiple Options of Same Type
i. Bull Spread
ii. Bear Spread
iii. Butterfly Spread
iv. Calendar Spread
v. Diagonal Spread
3. Multiple Options for Different Types
i. Straddle
ii. Strangle
iii. Collar
iv. Range Forward – Long
v. Range Forward – Short
vi. Box Spread
vii. Condor
B. Option Chain
C. Contract Fundamentals
D. Option Trading Intricacies
1. Choice of Strike Price
2. Choice of Expiry
3. Roll Over and Covered Calls

Exotic Options

A. Asian Option
B. Bermudan Option
C. Compound Option
D. Binary Option
E. Barrier Option
F. Look back Option
G. Shout Option
H. Chooser Option

Market Indicators

A. Put-Call Ratio
B. Open Interest
C. Roll-over
D. Volatility