Understanding Options: features, benefits and risks

Understanding Options: features, benefits and risks – 2CPD


This workshop focuses on the class of derivatives known as options, particularly equity options traded on the Australian Securities Exchange (ASX). Equity options offer investors an efficient means of managing the risks of adverse price movements in the share market.  In addition, they give traders a vehicle by which to gain leveraged exposure to individual shares and selected indices.

This workshop covers option pricing, basic strategies and the mechanics of trading options on the ASX.

Course Outline

  • Define an option
  • List the main features of an equity option
  • Explain the difference between call and put options
  • Describe the different between intrinsic and time value
  • Identify the main influences on an option's price
  • List the main features, benefits and risks of the following strategies:
    • Taken call
    • Taken put
    • Covered call
  • Calculate the breakeven points and maximum profit and loss for the above strategies
  • Explain the role of market makers in the options market
  • Explain the role of the Australian Clearing House (ACH)
  • List the key obligations under ASX Rules and the Corporations Act in opening an options account and advising a client

Who should attend?
Advisers and others in sales and marketing, compliance, HR, IT and other supporting roles looking to develop their industry knowledge. 

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