Valuation and Use of Equity Options

Derivatives are one of the fastest growing investment vehicles within the financial industry, yet least understood. This six-evening course (6) session will provide participants with essential tools and skills needed to value equity options. Individuals employed in the financial and investment banking industry need to recognize how options function, why and how they are used and the factors that alter the price of each call and put as they are entering and exiting various strategies. This course format includes a combination of group discussions, short examples and case problems to illustrate and apply the concepts of options.

No sessions currently available. Contact client services to get the next available date.
Bankers, financial analysts, investment advisors/consultants, portfolio managers, traders, junior traders, investors, compliance staff/auditors and others making investment decisions.
Participants should have successfully completed an introductory course in finance and investments prior to taking this course.
Students will be able to:
  • Recognize and understand the various option categories.
  • Identify arbitrage opportunities.
  • Manage and create multiple hedging positions.
  • Assess the risk and rewards of various trading strategies.
  • Understand how dividends affect option prices.
Participants should have successfully completed an introductory course in finance and investments prior to taking this course.
Review and Introduction
  • Review of the Investment Course (terminology and the biases of investment positions)
  • Introduction to options
  • Types of traders
  • Hedgers and speculators

Clearing Process
  • Arbitrage
  • Option categories
  • Provisions of stock options
  • How trades are cleared
  • Dynamics that influence option prices

Hedging Strategies
  • American Options and European Options
  • When and how to correctly exercise options
  • Risk and rewards of various trading strategies
  • Covered writing
  • Bull call spreads
  • Bear call spreads

Additional Hedging Strategies
  • Bear put spreads
  • Bull put spreads
  • Straddles long and short
  • Calendar spreads
  • Box spreads long and short
  • Butterfly spreads long and short

Option Greeks
  • Strangles
  • Synthetic long and short spreads
  • Reversal / conversion spreads
  • Greeks (Delta, Gamma, Theta, Vega and RHO)
  • Factors that impact volatility

Black Scholes Model / Conclusion
  • How to employ the Black Scholes model
  • Creating delta neutral positions
  • Influence dividends have on the price of the underlying security and options
  • Utilization of options with portfolios
  • Conclusion

Lunch included for all students taking day classes.