Comprehensive Understanding of Financial Markets

Day 4: Futures and Options

Introduction to Futures and Options:
  • Definitions
  • Over-the Counter (OTC) versus Exchange Traded Products
  • The Role of The Clearing House
Pricing and Valuing Futures:
  • Basic Futures Mechanism
  • Pricing Futures through Cash and Carry Arbitrage
  • The Value Basis
  • The Carry Basis
  • The Importance of Credit
Options Strategies:
  • Straddles
  • Strangles
  • Bear Spreads
  • Bull Spreads
  • Butterflies
  • Risk Reversal
  • Cylinders
  • Put - Call Parity
Using Options to
  • Speculate
  • Hedge
  • Arbitrage
A Simple Approach to Option Pricing:
  • Volatility
  • The Binomial Model
  • The Black & Scholes Model
Risk Measures and the Greeks:
  • Delta
  • Gamma
  • Vega
  • Rho
  • Tau
Case Study
  • Managing the Risks:
  • Delta-hedging your Option Positions
Course Summary:
  • Putting Financial Instruments Into Context
  • Risk Management

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