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. It counts toward the Certificate in Systematic Investing and so toward the Professional Diploma in Algorithmic Trading.

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.

5. Income and hedging

   Covered calls, cash-secured puts, protective puts and collars, and what they cost.

6. Sizing, testing and costs

   Margin, maximum loss, assignment, bid-ask spreads and honest backtests.

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. Read how certification works.

Before you start

The option Greeks at the Institute's level.

• Option Greeks