Module 1: Essential Options Characteristics and Concepts - The module begins by reviewing all the necessary parts of the options story. Most traders already have a fairly good understanding of basic options concepts, but a fresh review and professional perspective on important areas -- such as time value (extrinsic value), intrinsic value, expiration, exercise and assignments, and pricing specs -- helps to focus attention on what's important in relation to strategies to follow in subsequent modules. In this module, data is presented showing why options selling (writing) makes more sense than buying options as a strategic approach. Highlights from two reports on options expiration patterns and open and closing trades are shared with students, and discussed. "Is there an advantage to selling options?" is a key question that is explored in light of the efficient markets hypothesis argument. Put/call ratios are looked at to help answer the question, in addition to data from the two reports. Finally, differences between futures and equity options are explained, and how these two worlds of option trading don't have the same margin rules. Different margin systems are explained, with an emphasis on advantages offered by SPAN margin rules used with futures options. Index options, ETF options markets are also part of the discussion. At the end of this module, students have all the prerequisites to move into strategy implementation.

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Module 2: Options Greeks And How To Use Them Effectively - With a solid understanding of the basics, we can now move into looking at how to understand risk and reward in options trading. In order to better understand strategies, which will begin to be covered in Modules 3 thru 6, here we look at Delta, Theta, Vega, Gamma and Rho. This allows you to get a sense of what makes any options strategy win or lose. Each one of these so-called option Greeks gives us a way to meter the risk and potential reward at any one point. Whether from directional moves of the underlying or changes in volatility or time remaining on an option or options, we can use the Greeks to examine where we stand at any point in time. Greeks are important, moreover, when setting up strategies to get the risk/reward parameters right, especially in line with available capital and determining levels of asset allocation .

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Module 3: Trading With Outrights & Simple Options Spreads - With risk/reward at the ground floor understood with the analysis of the Greeks, we can now move to application of these concepts in trading options using outright puts and calls and simple debit and credit vertical options spreads. When you buy options or sell them outright you expose yourself to a greater level of risk than when you combine them in what are known as vertical options spreads (i.e., buying a call and selling a higher strike call in the same month). In this module, outrights and then vertical options spreads are presented and analyzed providing a full grasp of the profit/loss parameters. Additionally, the market conditions allowing for the optimal application of outrights and vertical call and put vertical spreads are explored. Furthermore, paper trading positions are set up and tracked across time for dynamic analysis of these simple spread structures.

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Module 4:   Intermediate Level Options Spreading: Calendars - Calendar spreads are two-leg spreads, just like vertical spreads, but they are built using different options months. In vertical spreading, we use the same options expiration month for the two legs in the spread. But calendar spreads will combine what is known as a front and back month option using the same strikes to take advantage of the time value decay potential in this construction. Theta, the rate of time value decay, is working for you in calendar spreads. Additionally, the right markets to apply calendars is taught, as are the important conditions needed in those markets for optimizing performance of calendars and minimizing risk. Finally, the application of calendars is explored with use of case studies and paper trading positions set up and tracked across time for dynamic analysis of these intermediate-level spread structures. Not all calendars use the same strikes and when strikes are not the same, they are known as diagonal, as opposed to horizontal, calendar spreads. Includes training in adjustment tactics.  Diagonal spread are covered in Module 5.

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Module 5: Advanced Options Spreading Strategies: Diagonals -  This module begins with a quick review of options spreads concepts (vertical, horizontal and diagonal) and then lays out the rules for applying diagonal put time spreads on the S&P 500 index  (extendable to other markets). The module walks you through the important dimensions of this advanced level strategy in its two basic forms (debit and credit spreads). Generally, the diagonal spread can make a potential profit from time value decay, but directional moves of the underlying and positive changes in implied volatility can add significant potential gains. Due to its time (calendar) spread nature, the process of Delta and Vega inversion (a process brought about by Theta) are the real potential profit engines, demonstrated in this module. The module provides the setup steps and then takes a careful look at the profit/loss impact resulting from changes in key variables (volatility, price change, and time value decay). Simulations are executed to bring to live the essential characteristics of the diagonal strategy, and paper trading postions established. The module teaches you the methodology for selection of strikes and how to set up balanced and unbalanced Greeks, as well as when to apply this strategy with the correct position Greeks, and in what position sizes relative to available risk capital. You are also taught how to prepare and apply defensive actions and other types of follow-up interventions to mitigate risk and preserve potential for profit through examination of a number of case studies. Includes training in adjustment tactics.  By the end of the module, students have a solid feel for applying this strategy.

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Module 6:  Combination Strategies: Strangles & Straddles & Condors  - In our final module, the combination approach to trading options is explored. By combination, we mean building a strategy that uses both calls and puts together in a package. There are many ways to combine puts and calls, but here we will focus on popular approaches known as strangles and straddles. We begin by looking at uncovered (i.e., unhedged) approaches using strangles and straddles. After fully exploring the risk/reward dimensions of  both long (buying) and short (selling) unhedged versions of strangles and straddles, we move to hedged constructions, which will still allow for potential profit, but with much less risk. Hedged short strangles are popularly known as iron condors. The iron condor will be fully examined and its correct application exlained. Includes training in adjustment tactics. 

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