Options belong to the larger group of securities known as derivatives. The price of a derivative instrument is dependent on or derived from the price of something else. This short course will focus on understanding the mechanics of options and their uses in trading and investment.
Course Objectives
- Understand how options contracts, especially single stock and stock index options, work
- Learn the essential pricing principles for options
- Understand how to use options in trading and investing
- Know simple but yet essential option payoffs
- Understand options Greeks and their importance
Course Outline
Module 1: What is an Option?
- Call options
- Put Options
- Options are All Around Us!
Module 2: Option Pricing Fundamentals
- General Factors that Determine Option Prices
Module 3: Option Payoff
- Call Options
- Put Options
Module 4: Why Options?
- Earning Income
- Protecting the Value of Your Shares
- Capitalising on the Share Price Movements Without Having to Purchase/Short-Selling Shares
- Using Options Give You Time to Decide
Module 5: Trading Index Options
- How are Index Options Different from Single Stock Options?
- The Key Advantages of Trading Index Options
Module 6: Options Risk Metrics: The Greeks
- Delta
- Gamma
- Theta
- Vega
- Rho
- Minor Greeks