This course aims to provide a thorough understanding of the basics of financial options, covering the market terminology, trading strategies and applications and an intuitive understanding of option valuation and risk metric. No prior knowledge of financial mathematics is assumed.

Options fundamentals and terminology buster
5. Characteristics of calls and puts
6. Payoff profile and direction
7. How are options settled?

Understanding the intrinsic value and “moneyness” of an option
8. The option premium as a function of intrinsic value and time value
9. Put-call parity and arbitrage

Option geography and exercise mechanics
10. Differentiating between Europeans, Americans, Bermudans and Asians

What drives the option price?
11. What are the inputs and where do they come from?

Why use options?
12. A client’s perspective – a case for leverage
13. Cash products vs. derivative products

Option strategies and applications
14. Using option combinations to create specific payoff profiles
15. What are the clients’ motivations behind option combos?
16. Protective strategies using puts
17. Enhanced income strategies using calls
18. Subsidising option costs using spreads and collars
19. Taking a view on volatility using straddles and strangles

Option risk management overview
20. Intuitive understanding of the option value and price drivers
21. The most important risk metrics? Explaining Delta and Vega