Course Title: Master in Equity Options Trading
Duration: 1 Month (20 Sessions)
Holidays: Saturdays and Sundays
Focus: Practical exercises and real-world applications
Week 1: Introduction to Equity Options Trading
- Day 1: Overview of Options Trading
- Introduction to equity options and key concepts
- Understanding options terminology (e.g., strike price, premium, expiration)
- Day 2: Call and Put Options
- Differences between call and put options
- Practical examples of buying and selling calls and puts
- Day 3: Options Payoff and Breakeven
- Calculating payoff for call and put options
- Identifying breakeven points in options trading
- Day 4: Options Greeks Basics
- Introduction to Delta, Gamma, Theta, Vega, and Rho
- Importance of Greeks in option pricing and strategy selection
- Day 5: Practical Exercise – Basic Options Trades
- Hands-on practice with buying and selling calls and puts
- Analysis of hypothetical scenarios and profit/loss
Week 2: Options Pricing and Volatility
- Day 6: The Black-Scholes Model
- Explanation of the Black-Scholes options pricing model
- How it applies to real-world options pricing
- Day 7: Implied Volatility and Historical Volatility
- Importance of volatility in options trading
- Calculating and interpreting implied vs. historical volatility
- Day 8: Intrinsic and Extrinsic Value of Options
- Understanding the intrinsic and extrinsic components of option prices
- Practical calculation of option value components
- Day 9: Time Decay in Options (Theta Decay)
- Exploring the impact of time on options value
- Strategies to benefit from time decay
- Day 10: Practical Exercise – Pricing and Volatility Analysis
- Hands-on practice in analyzing option prices with different volatilities
- Role-playing different market scenarios to predict price movements
Week 3: Options Trading Strategies
- Day 11: Basic Strategies – Long and Short Options
- Long call and put, short call and put
- Risk-reward profile for each strategy
- Day 12: Spreads – Bull and Bear Spreads
- Vertical spreads: Bull Call Spread and Bear Put Spread
- Practical applications and scenarios for each spread
- Day 13: Straddles and Strangles
- Market-neutral strategies using straddles and strangles
- Calculating potential profits and losses for volatile markets
- Day 14: Advanced Strategies – Iron Condor and Butterfly
- Building iron condor and butterfly spreads
- Risk management and potential profits in low volatility markets
- Day 15: Practical Exercise – Strategy Simulation
- Simulated trading sessions to apply learned strategies
- Analyzing results and refining approach based on outcomes
Week 4: Risk Management and Advanced Applications
- Day 16: Risk Management in Options Trading
- Techniques to manage risk in options trading
- Hedging and protective strategies
- Day 17: Portfolio Diversification with Options
- Using options to diversify and protect a portfolio
- Balancing options with other assets for a well-rounded portfolio
- Day 18: Options Expiration and Assignment
- Key considerations at expiration
- Handling assignment and expiration risks
- Day 19: Practical Exercise – Portfolio and Risk Management
- Simulating portfolio diversification using options
- Managing risk in hypothetical portfolios
- Day 20: Review and Q&A Session
- Recap of key topics and strategies
- Addressing questions and clarifying complex topics
- Final practice test to reinforce understanding
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