Options Strategies

Options strategies combine calls, puts and the underlying into positions that pay off on a specific view: a rise, a fall, a quiet market, a violent one, or simply the passage of time. This course builds each strategy from its payoff and Greeks, then sizes it, tests it on history and costs it the way a professional desk would.

Why do so many options strategies lose money in practice?

Because the payoff diagram hides the costs and the tails. Wide bid-ask spreads, early assignment, margin calls and the occasional large move turn a strategy that wins most months into one that loses over years. The course backtests every strategy with these costs included.

How is the course taught?

Audio lessons give the general subject, explainer films show payoffs and Greeks changing as markets move, and the workbooks hold worked examples, strategy cheat sheets and notebooks. The strategy lab receives written feedback from the faculty.

Who is this course for?

Traders, portfolio managers and quants who use options for income, hedging or views.

What you will be able to do

• Build verticals, calendars, straddles, strangles, butterflies, condors, covered calls and collars, and read their payoffs and Greeks.
• Match a strategy to a view on direction, volatility and time.
• Size positions by maximum loss and margin, and plan adjustments and exits.
• Backtest an options strategy with realistic fills, spreads and early assignment.

Syllabus, module by module

1. Payoffs and Greeks

   Combining calls, puts and stock; reading a position's delta, gamma, vega and theta.

2. Directional spreads

   Bull and bear verticals, risk reversals and ratio spreads.

3. Volatility positions

   Straddles, strangles, butterflies and condors.

4. Time and the term structure

   Calendars and diagonals.

What every course contains

Every paid course comes with the first seven and the certificate, whichever level it sits at. The proctored exam and the credential come when the course is taken as part of a Certificate, Diploma or Fellowship. Everything is self-paced: the material is yours to study in any order, at any hour, for the whole of the license.

1. Workbooks. Written to train the thinking patterns and the important concepts of the course, with worked problems and the reasoning behind each answer, so that you learn to think the way the subject is thought.
2. Audio edition. Focused, well-presented recordings with explainers and examples of the material, made to be interesting, relevant and entertaining, so that the general subject can be learned away from the desk.
3. Notes. Pre-produced notes with every fact the course relies on, written out in full, so that nothing has to be transcribed from the films or the audio.
4. Cheat sheet. One sheet with every important learning concept of the course on it, to keep beside you during the work and to revise from before the exam.
5. Named sources. Every fact in the notes names its source, the paper, the book or the dataset, for anyone who wants to dig in further.
6. Explainer films. Focused films, in the style of the sample films on the catalog page, that walk through the most difficult concepts of the course with visual explanations of a high standard.
7. Transcript. A full transcript of every film and every audio recording, searchable and quotable.
8. Proctored exam. Taken as part of a Certificate, Diploma or Fellowship, the course ends in a proctored multiple-choice questionnaire, with a pass mark of 60% and three retakes included. A course taken on its own is assessed by its coursework and has no exam.
9. Verifiable certificate. A certificate of completion that a third party can verify: an employer sends the code on it to the credentials office and receives written confirmation of the course, the date and the result.
10. Credential of the program. The Certificate, Diploma or Fellowship of the program, track or path the course belongs to, awarded when every course in it is passed. Which one depends on the program you choose.

How the certificate is earned

Graded problem sets and a final lab: design, size and backtest an options income or hedging strategy and report its risk. On a pass you receive the Course certificate in Options Strategies, issued by the Institute with a verification code. A course taken as part of a Certificate, Diploma or Fellowship ends in a proctored online exam with a pass mark of 60%. The fee includes three retakes; each attempt after that carries a reduced proctored exam fee. A course taken on its own is assessed by its coursework and has no exam. Read how certification works.

Before you start

This course assumes the material of the courses below, or the same knowledge gained elsewhere.

• The Black-Scholes Model and the Option Greeks