Capital Markets & Derivatives Training specialise in developing and delivering
bespoke in-house training courses and programmes. This sample course outlines the
content and structure of a typical course.
This section reviews the basic jargon and terminology of calls and puts and
ensures all delegates are conversant with the different expiry profiles.
- Defining an option call/put
- Terminology explained
- exercise, intrinsic and time value
- Types of options
- Risk reward profiles explained
- Users and uses versus futures
Pricing options looks at the basic theory of probability and how this is applied to
options contracts.
- Intrinsic and time value
- option premium and the impact of time
- Calculating expected loss
- Review of probability theory
- normal distribution and standard deviation
- Volatility types
- implied, forecast , historic
- Types of option pricing models
- advantages and disadvantages
- Use of models
This section explains how an options price can be predicted using various inputs
into a pricing model.
- Explaining the sensitivities
- delta, gamma, theta, vega and rho
- Applying the sensitivities
- trading and hedging purposes
- Position analysis
There are many strategies that can be created by using options and the
underlying product, this section explains the main strategies and other
synthetic relationships.
- Distinguishing between volatility and directional trades
- simple option trades versus spreads
- Main strategies explored
- Call/put spreads
- e.g. straddles, strangles, butterflies
- Synthetic relationships
- Hedging applications
- using options to hedge with greater flexibility
- Options as insurance or enhancement
- Caps/floors/collars
- Exchange v OTC options