Options Primer - From Trade to ExpirationThis two-day program covers options from the time they are traded until the time that they expire. The program distinguishes the differences between listed vs. over-counter-options, between physical vs. cash settling options, dollar priced vs. interest rate options and Flex and Standard options. It takes the participant through the clearing and settlement process, customer and OCC margin, exercise and assignment, record keeping and into expiration. |
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| Broker Dealers - Accounting, Control, Margin, middle and back office Operations, Stock Record and trading assistant personnel. Personnel from Internal and external auditing, hedge funds as well as banks, industry utilities and service organizations should also attend. |
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| No advance preparation required. |
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Students will be able to:- Understand the rational used in option transaction processing
- Comprehend the impact option strategies have on operations
- See the importance of accurate trade recording
- Learn the effects exercise and assignments have on underlying issue processing streams
- Recognize through examples, which positions require which margin calculation and why
- Know the responsibilities and processes of Option Clearing Corporations
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Day 1What are options?- Options vs. Futures
- Options vs. ETFs
- Listed vs. Over the Counter options
- Types of options
- Option structure
- Option terminology
- Listed vs. Over the Counter option
Characteristics of the Underlying issues- Common stocks
- Indexes
- Debt
- Interest rate
- Currency
- Futures
Listing formats- Expiration months
- Strike price
- Interim listing
Option Strategy- Relationship between strike price and underlying
- Long
- Short
- Short uncovered
- Buy write
- Spread
- Straddle
- Butterfly
- Ratio writing
- Exercise - Synthetics
Customer Accounts- DVP
- Retail
- Cash
- Margin
- Short
- Terms of the Option Agreement
- Characteristics and Risks of Standard Options
Workings of the Listed Markets- Bids and Offers
- Types of orders
- Order contents
- Trade execution
Trade processing- Figuration
- Customer side processing
- Street side processing
- Workings of Option Clearing Corporation
| Day 2Trade reconcilement- Activity report
- Internal records
- Out trades
- Reconcilement
- Daily Trade Settlement
Customer Margin- Underlying issues
- Flex options
- Long
- Short covered
- Short
- Spread
- Straddle / Combination
- Future
- Span margin
Exercise and Assignment- Vs. OCC
- Assignment instruction
- Underlying settlement cycle
- Clearing facility of underlying
- Cash Settlers
- Underlying deliverable
- Settlement of OTC options
OCC SettlementExpiration- Last trading day
- Index expiration calculation
- Expiration date
- Ex by Ex
Issuer Actions- Distributions
- Corporate Actions
Regulatory- Position limits
- Short selling
Stock Record- Activity (Daily)
- Summary (Weekly)
General Ledger | | |
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| Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.) |
Lunch is included for all students taking day classes. |
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