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Understanding Options
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Overview
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Description: This comprehensive course is designed to provide participants with a thorough understanding of options, their pricing, sensitivities, and various trading and hedging strategies. It combines theoretical knowledge with practical applications, enabling participants to use options effectively in different market scenarios. The course covers essential topics such as the Black-Scholes model, binomial options pricing, the Greeks, and advanced options trading strategies like straddles, strangles, butterflies, and iron condors.
Course Objectives
- Fundamental Understanding:
- Define and explain basic options terminology such as calls, puts, obligations, and rights.
- Differentiate between options and other financial instruments like futures and forwards.
- Pricing Models:
- Identify the drivers and key inputs required for different options pricing models.
- Use Excel to estimate an option’s value using multiple pricing models, including the Black-Scholes and Binomial models.
- Calculate option prices given changes in factors such as volatility, the price of the underlying asset, and time.
- Option Sensitivities (The Greeks):
- Explain and interpret the Greeks: Delta, Gamma, Theta, Vega, and Rho.
- Evaluate how changes in market conditions impact each of the Greeks and, subsequently, the option’s price.
- Utilize the Greeks to manage and hedge risk in an options portfolio.
- Advanced Trading Strategies:
- Construct and analyze payoff diagrams for advanced options strategies including straddles, strangles, butterfly spreads, and iron condors.
- Determine appropriate strategies based on market outlooks, such as expecting high volatility or low volatility.
- Combine multiple options strategies to create complex positions that align with specific risk and return objectives.
- Practical Applications:
- Apply theoretical knowledge through practical exercises and real-world scenarios.
- Use Monte Carlo simulations to price options by generating future scenarios for an underlying asset.
- Develop the ability to construct and manage an options portfolio that meets specific financial goals.
Learning Outcomes
By the end of this course, participants will be able to:
- Understand and apply various options pricing models.
- Analyze and interpret the Greeks to manage options positions effectively.
- Implement hedging strategies to protect against market risks.
- Develop and execute advanced trading strategies to capitalize on market movements.
- Use practical tools and simulations to enhance their options trading and risk management skills.
This course is ideal for students, finance professionals, traders, risk managers, and anyone interested in mastering the intricacies of options trading and hedging.
159 €
99 €
Course level: All levels
Duration: 10 weeks
9 lessons
1 quiz
Language: English
Assessments: Yes
20 students
Excellent feedback
Last Update: 11 July 2024
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