Index Options reading

Intermediate level
From CBOE website

Index Options

Continuing Education Credit: 2 hours

Student Access: Valid for 6 weeks from date of registration

Retail Cost: $50

Course Overview:
In many ways index options are similar to options on individual stocks. They can serve as a way to add protection and diversity to your portfolio. Now that you have become familiar with options, let's take it a step further and explore the basics of Index Options.

This module will introduce some of the multiple indexes available as well as conservative ways to invest in those indexes.

Course Outline:

Introduction to Index Options
- Essential Terms and Definitions

Contract Specifications for Various Index Options

Investor Strategy #1
- A Conservative Way of Investing in the S&P 500 Index
- Profit and Loss Table and Diagram
- A Variation on the Buy Index Call and Money Market Strategy

Investor Strategy #2
- Protecting a Portfolio

Unique Aspects of Index Options

Reducing the Risk of Changes in Implied Volatility
- Profit and Loss Table and Diagram
- Recognizing the Trade-Offs

Options Price Behavior

Continuing Education Credit: 1 hour

Student Access: Valid for 6 weeks from date of registration

Retail Cost: $50

Course Overview:
Options can be compared to insurance policies. The factors that always affect an option's price: price of the underlying stock, strike price, time to expiration, interest rates, dividends, and volatility.

This module will examine these factors and the effect they may have in changing an options price.

Course Outline:

Options Compared to Insurance Policies
- Options as Insurance

Introduction to Volatility

How Option Prices Change
- Changing the Stock and Strike Price
- Days to Expiration and Interest Rates
- Dividend Yield and Volatility

Delta and Time Decay
- The Delta of an Option
- Call and Put Deltas
- Time Decay

Implied Volatility
- Implied Volatility - An Example

Using the Option Pricing Calculator

Trading Strategies

Continuing Education Credit: 1 hour

Student Access: Valid for 6 weeks from date of registration

Retail Cost: $50

Course Overview:
Trading options requires a different thought process than trading stocks. Traders should begin with a forecast that includes a specific price target for the underlying stock and a specific forecast for the time period.

Trading options is not easy. It takes time to learn the mechanics and it involves acting on intuition and closing positions at either a profit or a loss when market conditions dictate.

Course Outline:

Overview
- Trading and Leverage Defined

Stock-Oriented Strategy #1
- Covered Straddle

Stock-Oriented Strategy #2
- Stock Repair

Stock-Oriented Strategy #3
- An Alternative to Buying Stock on Margin

Buying Calls and Puts
- Buying Calls and Puts: Next Steps

A Trading Problem for You

Essential Option Dynamics - Trading Concepts, Pricing and Strategies

Continuing Education Credit: 4 hours

Student Access: Valid for 12 weeks from date of registration

Regular Retail Cost: $150
Special Promotional Cost: $125 (For a limited time, this price reflects a $25 savings)

Course Overview:
In this unit, we have combined three of our more advanced self-paced modules: Index Options, Trading Strategies and Option Price Behavior. Investors interested in continuing their quest for options knowledge will find this segment of the Online Learning Center an invaluable resource for gaining an understanding of the principles of trading index options, options pricing and practical uses of basic strategies. Experienced investors may find this area helpful as a refresher on trading and implementing forecasts.

Please Note: If you have already enrolled in one of the single modules included in this course, you may wish to enroll separately in the other single modules, instead of duplicating a module.

Course Outline:

Index Options
Concepts covered in this lesson include conservative ways of investing in an index fund, protecting a portfolio and the multiple indexes available.

Option Price Behavior
This lesson covers volatility, delta, time decay and implied volatility.

Trading Strategies
Topics covered include leverage, covered straddle, stock repair, LEAPS and buying calls and puts.

Covered Call Writing

Continuing Education Credit: 1 hour

Student Access: Valid for 6 weeks from date of registration

Regular Retail Cost: $50
Special Introductory Cost: $25 (Valid through December 2006)

Course Overview:
Covered Call Writing, our newest offering, discusses the basic terms of Covered Call Writing, writing calls against a long stock position, covered calls as an alternative to open orders, and the assignment of Short Calls. You also will learn about the return based strategy called the buy/write and how it can be managed by rolling, and much more.

Course Outline:

Basic Terms and Definitions

Writing Covered Calls
- Writing Covered Calls against a Long Stock Position
- Writing Covered Calls and an Alternative to Open Orders
- Will my Short Calls be Assigned?
- Qualified Covered Calls

The Buy/Write
- A Return Based Strategy
- Stock Outlook
- Comparing Buy/Writes on Two Different Stocks
- Buy/Writes: Possible Outcomes at Expiration

Managing Buy/Writes
- Rolling Out
- Rolling Up and Out
- When to Roll Positions
- Otehr Possible Rolls