The Options Trading (Advanced) Module is designed to equip learners with a comprehensive and in-depth understanding of the options market. This module goes beyond the basics, offering detailed insights into the mechanics, valuation, and strategic applications of options. It covers a wide range of topics, including different types of options, complex trading strategies, and risk management techniques, making it ideal for individuals aiming to master the intricacies of options trading.
Key Learning Objectives:
Develop a broad-based and in-depth knowledge of the structure and functioning of the options market.
Understand various types of options, including calls and puts, and their characteristics.
Learn to design and implement advanced options strategies for speculation, hedging, and income generation.
Who Will Benefit from This Course?
Students seeking specialized knowledge in financial markets
Teachers and academicians in finance or economics
Retail and institutional investors interested in derivative instruments
Active traders looking to enhance their strategy toolkit
Employees of brokers/sub-brokers aiming to strengthen client advisory skills
Anyone with a keen interest in derivatives and capital markets
Exam Format
Duration: 120 minutes
No. of questions: 35
Maximum marks: 100, Passing marks: 60 (60%); There is negative marking for incorrect answers.
Certificate validity: 5 years from the test date.
Course Outline
The exam covers the following topics:
1. Options – A Backgrounder
A. Derivative Types
B. Continuous Compounding
C. Option Valuation
D. Option Pricing Band
Upper Bound: Call Option
Upper Bound: Put Option
Lower Bound: Call Option
Lower Bound: Put Option
E. Put-Call Parity: European Options
Position A undervalued
Position B Undervalued
F. Put-Call Parity: American Options
G. Dividends
2. Quantitative Concepts – A Backgrounder
A. Normal Distribution
B. Share Prices – Lognormal Distribution
C. Linkages that arise from the Distribution
D. Volatility (s)
3. Binomial Option Pricing Model
A. Single Period Binomial
B. Multiple Period Binomial
C. European Put Option
D. Binomial Model for American Options
E. Role of Volatility in ‘u’ and ‘d’
4. Black-Scholes Option Pricing Model
A. European Call Option
B. European Put Option
C. Dividends
D. American Options
5. Option Greeks
Delta
European Call on non-dividend paying stock
European Put on non-dividend paying stock
European Call on asset paying a yield of q
European Put on asset paying a yield of q
Gamma
European Call / Put on non-dividend paying stock
European Call / Put on asset paying a yield of q
Theta
European Call on non-dividend paying stock
European Put on non-dividend paying stock
European Call on asset paying yield of q.
European Put on asset paying yield of q
Vega
European Call / Put on non-dividend paying stock
European Call / Put on asset paying yield of q
Rho
European Call on non-dividend paying stock
European Put on non-dividend paying stock
6. Volatility
Historical Volatility (s)
ARCH(m) Model
Exponentially Weighted Moving Average (EWMA)
GARCH Model
Implied Volatility
7. Basic Option & Stock Positions
A. Pay-off Matrix for Basic Option Positions
Long Call
Short Call
Long Put
Short Put
B. Pay-off Matrix for Position in the Share
Long Stock
Short Stock
C. Assumptions
D. A Few Option Contract Intricacies
8. Option Trading Strategies
A. The Strategies
1. Single Option, Single Stock
Protective Put
Covered Put
Covered Call
Protective Call
2. Multiple Options of Same Type
Bull Spread
Bear Spread
Butterfly Spread
Calendar Spread
Diagonal Spread
3. Multiple Options of Different Types
Straddle
Strangle
Collar
Range Forward - Long
Range Forward – Short
Box Spread
Condor
B. Option Chain
C. Contract Fundamentals
D. Option Trading Intricacies
1. Choice of Strike Price
2. Choice of Expiry
3. Roll Over and Covered Calls
9. Exotic Options
A. Asian Option
B. Bermudan Option
C. Compound Option
D. Binary Option
E. Barrier Option
F. Look back Option
G. Shout Option
H. Chooser Option
10. Market Indicators
A. Put-Call Ratio
B. Open Interest
C. Roll-over
D. Volatility
What We Offer?
Full-Length Mock Tests that include unique, exam-style questions to help you practice under real conditions.
Section-Wise Practice Questions for reviewing topic-based questions and instantly see where you stand in every section.
Detailed answers with a clear and thorough explanation to help you understand the concept, not just memorize answers.
Get a complete breakdown of your strengths, weaknesses, and progress after every attempt.
All question sets reflect the latest exam syllabus and format.
Unlimited Access to Practice anytime, as often as you want - no time limits or hidden restrictions.
100% Pass Guarantee
We have built the Practice Exams with a 100% unconditional Test Pass Guarantee!
If you are unable to clear the exam, you can request a full refund guaranteed.
