Derivatives - Options & Futures (Coursera)

We'll explore the mechanics of futures market, 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.

Students may also further their involvement with this material by opening a free demo Trader Workstation Paper Trading account, enabling them to enjoy a hands-on experience in a safe, simulated trading environment, while being fully immersed in the fundamentals that underpin the capital markets.

Course 4 of 4 in the Practical Guide to Trading Specialization.

What You Will Learn

- Language of stock options, understanding of the roles and responsibilities of buyers and sellers. The mechanics of trading in the futures markets.

- Learn how to deconstruct options, distinguish between call and puts and the roles of contract writers and owners

- Examine multiple stock option payoff charts and determine breakevens and maximum profit and loss

Syllabus

WEEK 1

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).

WEEK 2

Options Market Mechanics

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).

Multiple leg strategies, including spreads, will incur multiple commission charges.

WEEK 3

Basic Option Strategies

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).

WEEK 4

Neutral Market Strategies

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.

WEEK 5

Mechanics of the Futures Market

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