Course description
This course is aimed at delegates with little or no existing knowledge of commodity options. These sessions are led by experienced traders and trainers who engage to bring theory to life through real-world insight to the options markets.The aim of this program is to provide you with the basic concepts and tools of the options markets. We draw on markets representative for all delegates to ensure relevance to every situation.
Upcoming start dates
Suitability - Who should attend?
- New traders and brokers
- New entrants to the futures and options markets
- Support and operations people involved in the commodity markets
- Sales and marketing personnel
- Individuals working in organisations such as: trading companies, banks, brokers, commodity producers, consumers, refiners, distribution companies, government and associated organisations.
Training Course Content
- Technology check to ensure all technology is working and that all participants have the required accesss
- Session 1 - Option Fundamentals
- Introductions
- Course structure & agenda
- Option fundamentals
- Option classes: calls & puts
- Definitions & key features
- Relevant examples
- Contract specs
- Trade venue: ETO vs OTC
- Q&A session
- Exercises
- Participants to access various exchange websites and answer questions about relevant (to participants) option contracts
- Finding settlement prices
- Session 2 - Fundamentals continued
- Explanation of sample option pricing screens
- Key point: inter-relationships of option prices
- Trading options vs trading futures
- Exercise & assignment
- Definitions
- Examples
- Contract specs revisited
- European-style vs American-style
- Option fundamentals: summary
- Q&A session
- Exercises
- Exercise and assignment
- Explanation of sample option pricing screens
- Session 3 - Using Options
- Evolution of options & option markets
- Option Uses - An introduction:
- Hedging - price protection
- Speculation
- Arbitrage - option market making
- Using options to hedge - detail
- Key language - natural longs & shorts
- Detailed case study - natural short
- Hedging with futures - limitations
- " Hedging by buying options - problems
- Hedging with ""collars""
- Creating a hedging decision tree
- Q&A session
- Exercises
- Participants work collaboratively to address a case study of a natural long
- Session 4 - Hedging contd. & Speculation
- Run through hedging case study exercise
- Hedging with options: summary
- Using options to speculate
- Long options:
- Advantages of long options over futures
- Speculative time-frames
- Short options:
- Why sell options?
- Case study - a warning!
- Speculating with options: summary
- Q&A session
- Exercises
- Risk reward- futures vs options
- Long options:
- Session 5 - Basic option strategy
- Planning option strategy
- The option trading decision
- Long options vs short options
- " Expiry pay-off charts
- Long call
- Short call
- Long put
- Short put
- Speculative decision tree
- Q&A session
- Exercises
- Creating pay-off charts
- Planning option strategy
- Session 6 - Introducing option price & value
- Key language - money-ness
- At-the-money
- In-the-money
- Out-of-the-money
- " Option pricing
- Historical context
- Methodology - Black Scholes
- Option pricing models
- Underlying
- Time
- Interest rates
- Volatility
- Q&A on this session
- Summary/round-up of day
- Exposition of digital post-course resources inc. assessment of day material
- Final Q&A
- Key language - money-ness
Reviews
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Intercontinental Exchange - Open Courses in Commodities and Financial Markets
Intercontinental Exchange's diverse markets span futures and options on interest rates, commodities, indexes and FX, as well as equities and equity options. These markets are relied upon by international market participants, along with our post-trade infrastructure. ICE is uniquely positioned...
The structure of the course was great and overall I was very impressed.