LEVEL I Course Curriculum

The Level I course is designed to introduce the basics of financial options. Students will learn the basic terms definitions. The student will gain a comprehensive understanding of how the basic options strategies perform at expiry.

The course is divided into 5 lessons of approximately 2 hours duration.

Lesson 1 - Terms and Basic Definitions. Calls and Puts

1. Definitions of the following:

A. Security

B. Derivative

C. Underlying

D. Futures contract

E. Option contract

F. Call Option

G. Put Option

H. “Going long”

I.  “Going short”

J. Spread

K. American Option

L. European Option

2. Long Call / Short Call

3. Long Put / Short Put

For each of the above positions the following calculations are explained: Trade Price; Debit or Credit; Maximum Profit; Maximum Loss; Break Even Points. Additionally, the options calculator spreadsheet is introduced.

Lesson 2 - Vertical Spreads

1. Long / Short Call Spreads

2. Long / Short Put Spreads

For each of the above positions the following calculations are explained: Trade Price; Debit or Credit; Maximum Profit; Maximum Loss; Break Even Points

Lesson 3 - Straddles and Strangles

1. Long / Short Straddles

2. Long / Short Strangles

For each of the above positions the following calculations are explained: Trade Price; Debit or Credit; Maximum Profit; Maximum Loss; Break Even Point

Lesson 4  - Ratio Spreads

1. Long / Short Call Ratio Spreads

2. Long / Short Put Ratio Spreads

For each of the above positions the following calculations are explained: Trade Price; Debit or Credit; Maximum Profit; Maximum Loss; Break Even Points

Additionally other variations of ratio spreads are covered such Ladders and varying numeric ratios. Also, the variations of terminology frequently used in the markets are described.

Lesson 5 - Butterflies and Condors

1. Long / Short Butterflies

2. Long / Short Condors

For each of the above positions the following calculations are explained: Trade Price; Debit or Credit; Maximum Profit; Maximum Loss; Break Even Points

Additionally the variants of Iron Butterflies and Condors are described.