Derivatives - Options & Futures

Go to Course: https://www.coursera.org/learn/derivatives-options-futures

Introduction

### Course Review: Derivatives - Options & Futures on Coursera Navigating the complexities of the financial markets can be daunting, especially when it comes to derivatives. The course **“Derivatives - Options & Futures”** on Coursera expertly simplifies what may appear to be a labyrinth of information into digestible concepts, making it a valuable learning experience for both beginners and seasoned traders. Below is a detailed review of the course, what you can expect to learn, and why I highly recommend it. #### Overview This course is designed to take the intimidation out of trading in the options market, an area that many find perplexing compared to more straightforward asset classes like stocks and bonds. By breaking down the fundamentals of options and futures into clear, understandable lessons, the course enhances your ability to engage with these lucrative markets. It encourages learners to seek hands-on experience, reinforcing the concepts covered. #### Course Syllabus The course is structured into several modules, each meticulously designed to build on the previous material. Here's a brief overview of what each module entails: 1. **All About Options:** - This foundational module introduces the core concepts of options, distinguishing between call and put options, and understanding their components. - You’ll learn about being a contract writer or owner and grasp how to evaluate stock options positions, as well as assessing whether a position is in- or out-of-the-money. - The module also touches on the risks and benefits that equity options traders face, making it clear that options involve significant risks and are not suitable for everyone. 2. **Options Market Mechanics:** - Here, you'll delve deep into the mechanics of the options market. The discussions around put-call parity, pricing, and the risk factors termed "The Greeks" provide essential insight into market operations. - A critical note in this module is the understanding of multiple leg strategies, which highlights the need for careful planning due to the associated commissioning costs. 3. **Basic Option Strategies:** - This segment focuses on actionable strategies that can be employed in bullish or bearish market conditions. - It offers practical demonstrations using IBKR’s Trader Workstation, allowing you to visualize the setup of each trade. 4. **Neutral Market Strategies:** - Building on the previous module, this section emphasizes strategies for capitalizing on stable market conditions, equipping you with tools to work effectively during market lulls. 5. **Mechanics of the Futures Market:** - The final module introduces the futures market, elucidating the risks involved and how to mitigate them. - Key terms such as spot and forward prices, contango, and backwardation are meticulously defined and explored. #### Learning Experience The interactive nature of the course is one of its standout features. With a combination of video lectures, readings, and practical demonstrations, the course encourages active participation in learning. Each module builds upon the previous one, ensuring a comprehensive understanding of the materials covered. The instructors break down complex theories with real-world examples, which not only enhances comprehension but also makes the learning process engaging. The emphasis on hands-on training is particularly beneficial; you not only learn the theory but also see how to apply that in practical scenarios. #### Recommendation I wholeheartedly recommend the **“Derivatives - Options & Futures”** course for anyone looking to enhance their trading skills or expand their investment strategies. The practical approach coupled with the foundational knowledge provided will equip you with the confidence to venture into the options and futures markets. Whether you are a novice seeking to understand the basics or an experienced trader looking to refine your strategies, this course is tailored to meet a wide array of learning needs. The potential risks associated with options trading are transparently addressed, preparing you for the realities of the market. In conclusion, this Coursera course serves as a robust stepping stone for diving into derivatives trading. With its comprehensive curriculum and practical focus, you’ll find yourself well-prepared to navigate the complexities of the financial markets confidently. Secure your spot today and take the first step toward mastering the art of options and futures trading!

Syllabus

All About Options

Overview of options, which includes: Distinguishing between call and put options; Identifying the components of an options contract on a trading platform; Making certain decisions in the options market as a contract writer or owner; Viewing different stock options positions; Examining whether a given position is in- or out-of-the-money and Understanding some of the benefits and critical risks faced by equity options traders. Options involve risk and are not suitable for all investors. For more information read the Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or copy and paste this link into your browser: http://www.optionsclearing.com/about/publications/character-risks.jsp.

Learn about the Options Market Mechanics by introducing topics such as put-call parity, pricing, payout of an option trade, and certain risk variables referred to as "The Greeks". Options involve risk and are not suitable for all investors. For more information read the Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or copy and paste this link into your browser: http://www.optionsclearing.com/about/publications/character-risks.jsp. Multiple leg strategies, including spreads, will incur multiple commission charges.

This module will focus on some basic strategies to use in bull markets – when prices rise – and in bear markets – where prices fall. As you may have gathered from earlier lessons, the characteristics of options requires skill and precision when making investment decisions. These strategies are displayed to give you an idea of what might work when making investing decisions. In this module, we’ll offer an explanation of several strategies for either type of market outlook, and we’ll also walk you through what they are designed to achieve. We’ll further provide a practical demonstration of how to set up each trade using IBKR’s Trader Workstation. Options involve risk and are not suitable for all investors. For more information read the Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or copy and paste this link into your browser: http://www.optionsclearing.com/about/publications/character-risks.jsp.

In the previous module we introduced you to several trades designed to be of use in either up or down markets. In this module, we’ll explore a couple of strategies that may be used by option traders to take advantage of a lull in the markets.

Introducing the Mechanics of Futures Market course, where we’ll introduce you to some of the risks faced by investors in the futures market, how certain of those risks are mitigated, as well as the difference between spot and forward prices, and contango and backwardation. We’ll also provide you with other insights about the mechanics of trading futures, including the roles of commoditized contracts, as well as margin requirements.