Introduction to Options

Introduction to Options

LENGTH:

2 or 3 days, depending on objectives and content

SUBJECT FOCUS AND CONTENT

Option basics: the language of options
Payoff diagrams and no-arbitrage boundary conditions
Option positions and combinations
Option valuation techniques
Option pricing sensitivities and risks
Understanding volatility and trading options
Selling option products to bank clients
Managing an option portfolio
Exotic options overview

TARGET AUDIENCE

The target audience comprises a wide variety of line professionals and support staff who need to broaden their knowledge of options. Participants should have a basic understanding of the workings of the money markets and foreign exchange markets.

PARTICIPANT OBJECTIVES

This workshop is designed to give participants a solid understanding of options, starting from basics to the intermediate-level complexities in managing an option portfolio. The workshop focuses on customer uses of options, and participants will become comfortable explaining options and option-based strategies to others. This workshop is not designed as an overly technical or academic program but rather as a practical guide for a variety of professionals that will need to talk either internally or externally about options.

This workshop will enable participants to:

Understand the terminology of the options market
Identify and effectively communicate option solutions and ideas to clients
Determine the net position when options are combined with other options and/or underlying risk positions
Identify the variables that influence option pricing and recognise the impact of changes in those factors
Understand the concept of volatility
Describe how a trader manages an option book and the associated risks
Describe the characteristics of some important exotic options

METHODOLOGY

In this workshop, the instructors act primarily as facilitators while participants learn about options and their applications through a series of active learning exercises. These exercises build from option basics and incorporate a variety of learning methodologies including brief lectures, electronic cases, simulations, discussions and role plays.