OPTION ESSENTIALS

By Comeandsee Global | 27 Jul 2021

Courses Details

Synopsis

This course introduces the basic types of options and explains how they work, the nomenclature of options as well as the components that make up the value of an option. It also covers the main uses of options, namely for hedging risks and for earning a profit for taking risks. Lastly, it outlines a medley of options with various underlying assets or instruments delves into the Black–Scholes model for the valuation of European options and concomitant risks.

Objectives

• Know the similarities and differences between futures and options.
• Know that options provide asymmetric risk–reward trade-offs compared to a spot trade or futures contract.
• Know how to relate the value of an option to its “time value” and “intrinsic value” components.
• Understand that there is a wide variety of choices when it comes to hedging risks.
• Know the options linked to stock indices, bonds, interest rates and currencies.
• Understand the Black–Scholes model and the notion of implied volatility.
• Know the mechanics of an option contract and its P&L computation.
• Know how to classify an option as in-the-money, at-the-money or out-of-the-money.
• Know how to compute the breakeven price for an option trade.
• Understand how various factors such as spot price, interest rates and volatility affect an option’s value.
• Know the risk measures typically associated with an option.

Courses syllabus

TITLE	ESTIMATE TIME
Option Essentials
Option Part 1	40:00
Option Part 2	40:00
Uses of Options	25:00
Types of Options Part 1 – Stock Index Options and Interest Rate Options	25:00
Types of Options Part 2 – Currency Options and Determinants of an Option’s Value	30:00
Types of Options Part 3 – Options Valuation and Risk Measures	20:00

$130 | CPD: 3 hrs

DR CHAN ONN – Lead Content Expert
Dr Chan has more than 30 years of mathematical and financial expertise in both academic and corporate organisations.