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Options Trading in plain English for beginners

22 hours on-demand video

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Brief Introduction

Learn basic to advanced Options Trading concepts and techniques in clear and simple terms

Description

Options are derivative instruments that are widely used in the financial markets due to their versatility and range of strategies that can be implemented whether on their own or in combination with other options and/or stock.

Options can be used to achieve different goals, some of which can only be implemented with options or options strategies due to their characteristics and special properties. Here are some of the practical uses for Options Strategies:

• Protection: Limiting the risk of large losses on existing assets (buying a Put, buying a Put Spread, etc)
• Speculation: Profiting from an underlying's bullish or bearish price action (buying a Call, buying a Put, etc.)
• Income generation on existing positions: Managing risk on existing positions to generate an income stream based on Options Positions (Covered Call, etc.)
• Leverage: Controlling a position worth a large notional amount with only a fraction of the required capital (buying a Call, buying a Call Spread, etc.)
• Diversification: Diversifying a portfolio's components using Options and their inherent low capital requirement (buying calls on Indices/ETFs , buying Puts on Indices/ETFs, etc)
• Flexibility in their use as Strategic Instruments: Profiting from changes in Implied Volatility, from the passage of time or from the magnitude of a price move regardless of its upward or downward direction (selling a Straddle, selling an Iron Butterfly, etc.)

In this course you will learn all you need to know about Options Trading, analysis, evaluation, strategy design, maintenance and monitoring as part of a Portfolio

It doesn't matter how extensive your existing knowledge of Options or Financial Markets is. In this course you will find all the tools you need to trade options efficiently and complement your existing portfolio or focus your entire methodology in the wide variety of options strategies that we will analyze conceptually, theoretically and in practice.

The course's structure and content will help you understand all the necessary concepts sequentially and in a clear and concise manner. We will primarily use visual and graphical material to help make complex concepts easier to understand. This is often an initial hurdle on your path towards efficient use and mastery of Options trading and we will make sure that nothing stands on your way to efficiently and profitably trading options.

As part of a balanced approach among concepts, theory and practice we will use the paperMoney by thinkorswim Options Trading platform, with information accessed directly from US Financial Markets. Detailed instructions on how to gain access this platform and also how to create a demo account will be provided as part of your course. With this, you will be able to follow all the explanations and transactions on the platform along with us using real market data.

Finally, as part of an ongoing process to ensure that you get the most out of this course and that you are ready to either start your options trading journey or take your options trading to the next level, you will be asked to take a quiz after each section. You will then be able to know which options concepts and techniques you have mastered and which areas need further attention and reinforcement, for which you will be taken directly to the lecture where this material can be reviewed.

*********** Course Summary ***********

1. Call Options 101:
Introduction to the concept of a Call Option as a contract that gives the buyer the right to purchase an asset at a predetermined price on or before the contract's expiration date

2. Put Options 101:
Introduction to the concept of a Put Option as a contract that gives the buyer the right to sell an asset at a predetermined price on or before the contract's expiration date

3. Options for Stock Traders:
Introduction to Options for those already familiar with trading Stocks

4. Basic Option Concepts:
Building blocks that serve as the foundation for a thorough understanding of Option Pricing and Trading

5. Volatility
Probably the most important and often misunderstood concept in Options Trading: Volatility or how widely an underlying's price is expected to fluctuate between now and a certain date

6. Options Greeks: Delta:
Introduction to Delta, how an Option Price changes as the Underlying Price changes, also used as a proxy for probability of expiring in-the-money and as a hedge ratio

7. Option Greeks: Theta:
Introduction to Theta: how an Option Price changes as time passes. A measure of time decay

8. Option Greeks: Gamma:
Introduction to Gamma: how Delta changes as the Underlying Price changes.

9. Option Greeks: Vega:
Introduction to Vega: how an Option Price changes as Implied Volatility changes

10. Getting ready to analyze Options Strategies:
Access to a real trading platform to practice and follow along with our analysis of the different options strategies reviewed in the following sections

-------------------------------------------------- Options Strategies --------------------------------------------------

11. Buying a Call:
Option Strategy Analysis: Long Call

12. Buying a Put:
Option Strategy: Analysis: Long Put

13. Selling a Put:
Option Strategy Analysis: Short Put

14. Selling a Call:
Option Strategy Analysis: Short Call

15. Covered Call:
Option Strategy Analysis: Covered Call

16. Vertical Debit Spreads:
Option Strategy Analysis: (Bull) Long Call Spread and (Bear) Long Put Spread

17. Vertical Credit Spreads:
Option Strategy Analysis: (Bear) Short Call Spread and (Bull) Short Put Spread

18. Strangle and Iron Condor:
Option Strategy Analysis: Strangle and Iron Condor

19. Straddle and Iron Butterfly:
Option Strategy Analysis: Straddle and Iron Butterfly

20. Calendar Spreads:
Option Strategy Analysis: Call Calendar Spreads and Put Calendar Spreads

-------------------------------------------------- Options Strategies --------------------------------------------------

21. How to trade the VIX:
Trading the VIX using VIX Futures, VIX ETFs and ETNs and VIX Options. Impact of contango and backwardation on the pricing of VIX Products

22. VIX calculation and settlement of VIX Futures and Options
Understanding what VIX represents and how it's calculated. Impact of the settlement process on VIX Futures and VIX Options

23. Advanced Option Concepts:
Introduction to techniques and strategies that will help you maximize the advantages and versatility that options and options strategies provide

24. Dividend Risk:
Understand the impact of dividends on options and options positions

25. Adjusting and rolling Options Positions:
Introduction to the concept of managing existing options positions by adjusting or rolling them as a response to changing market conditions

26. Options Portfolio Management
Managing an Options Portfolio and all its components to maximize profits and minimize risks

27. Differences between current P/L and P/L at expiration for Options Strategies
Understand the interaction between underlying price, time to expiration and implied volatility when analyzing your options positions' payoff diagrams.

Requirements

Requirements
There is no financial, mathematical or trading-related requirement to take this course and become the best Option Trader you can be

Knowledge

Access the Options Market and trade Options Strategies efficiently and profitably
Master the most widely used Options Strategies: Buying and Selling Calls, Puts, Covered Calls, Call Spreads, Put Spreads, Strangles, Iron Condors, Straddles, Iron Butterflies and Calendar Spreads
Understand the foundations of Options in the Financial Markets and their practical uses as Strategic, Protection, Speculation, Leverage and Income Generating Instruments
Create a demo account and download an Options Trading platform to gain access to the Options Market and follow along with the examples as well as practice Options Strategies with real data
Understand the options exercise and assignment processes
Understand the concept of Volatility and its importance for option pricing
Explore the different factors that determine an Option's Price: Underlying Price, Strike Price, Time to Expiration, Implied Volatility, Dividends and Interest Rates
Use Option Greeks (Delta, Theta, Gamma, Vega) to measure and monitor your options strategies and understand their exposure to known risks
Get a quick overview of how options can help current Stock Traders better achieve their goals
Learn how to determine and implement the most efficient options strategy based on your outlook and current market conditions
Monitor, roll and adjust existing Options Positions to more efficiently achieve your profit targets
Determine your options position's Probability of Profit easily and accurately to help you make better and more informed trade management decisions
Estimate and take appropriate actions due to the impact of dividends and other distributions on long and short Options positions (Calls and/or Puts)
Learn to trade the VIX by using VIX Futures, VIX ETFs and ETNs and VIX Options
Manage your Options Portfolio efficiently in order to maximize profits and minimize risks.

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