Options Primer: Buying Strategies
Course Description
Dive into the world of options trading with this extensive online course module. Learn about contracts that give the right to buy or sell assets at a specific price, and explore segments like equities, indices, commodities, and currencies. Understand how to execute call and put trades based on market expectations, and examine the option chain, moneyness, and the Greeks (Delta, Gamma, Theta, Vega) to assess sensitivities. Gain valuable insights into implied futures, and synthetic futures, and how to calculate them for precise trading decisions. Discover how to determine intrinsic and time value to enhance your trading strategies. Designed for both beginners and advanced traders, this course module provides the essential knowledge and tools needed to master the complexities of options trading. Improve your skills and decision-making with guidance from experts in the field
- Understanding Options: Contracts Providing the Right to Buy or Sell Assets at a Set Price
- Segments for Options Trading: Equities, Indices, Commodities, and Currencies
- Timing Call and Put Trades: Buying Calls for Bullish Expectations, Puts for Bearish Expectations
- Relationship of Underlying Asset with Call and Put Options: Call Options Rise with Underlying Asset, Puts Fall
- Introduction to Option Chain: Visual Display of Available Options Contracts and Their Prices, Greeks, and Volume
- Moneyness of an Option: Relationship Between Strike Price and Current Market Price of Underlying Asset
- Difference Between Option Buyer and Seller: Buyer Pays Premium for Right, Seller Receives Premium for Obligation
- Understanding Expiry: Date When Option Contract Expires, No Longer Valid
- Expiries Across Segments: Different Markets Have Different Expiry Dates for Options Contracts
- Options Code and Options Chart Introduction: Symbols and Graphical Representation of Options Contracts
- Option Greeks: Measures Sensitivity of Option Price to Changes in Various Factors Such as Price, Time, and Volatility
- Delta, Gamma, Theta, Vega: Option Greeks measuring sensitivity of option prices to changes in underlying asset price, volatility, time, and interest rates respectively.
- Implied Futures: Expected future price derived from options prices.
- Calculating Implied Futures: Using options prices and formulas to estimate future asset prices.
- Finding Correct ATM (At-The-Money) according to Implied Futures: Selecting strike price closest to the estimated future price.
- Synthetic Futures: Replicating futures exposure using options contracts, offering flexibility and risk management.
- Intrinsic Value and Time Value of Option: Intrinsic value is the difference between option's strike price and current market price (for ITM options), while time value is the portion of option's premium representing potential future gains.
- Calculation of Intrinsic Value and Time Value of an Option: Subtracting the option's intrinsic value from its total premium gives its time value.
- Introduction to Option Buying Trading Strategy - 1
- Rules of Option Buying Trading Strategy - 1
- Practicals of Option Buying Trading Strategy - 1
- Introduction to Expiry Special Option Buying Trading Strategy
- Rules of Strategy
- Introduction to Option Selling and Hedging
