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Course Lessons

Introduction to Options

1 Introduction to Options Sample Lesson
2 How to Register for a Framework Course
3 Framework Investing Course Orientation
4 What is an Option?
  • Take-Aways: What is an Option?
  • Comprehension Check: What is an Option?
5 Options in Their Historical Context
  • Take-Aways: Options in Their Historical Context
  • Comprehension Check: Options in Their Historical Context
6 Arbitrage in the Ancient World
  • Take-Aways: Arbitrage in the Ancient World
  • Comprehension Check: Arbitrage in the Ancient World
7 Options in Daily Life
  • Take-Aways: Options in Daily Life
  • Comprehension Check: Options in Daily Life
8 Intro to Options - Checking In
9 The Development of Modern Derivatives
  • Take-Aways: The Development of Modern Derivatives
  • Comprehension Check: The Development of Modern Derivatives
10 The Development of the Listed Option Market
  • Take-Aways: The Development of the Listed Option Market
  • Comprehension Check: The Development of the Listed Option Market
11 The OTC Option Market
  • Take-Aways: The OTC Option Market
  • Comprehension Check: The OTC Option Market
12 Hot Mess: How Goldman Sachs Lost $1.2 Billion of Libya's Money
  • Take-Aways: Goldman Sachs and the LIA
  • Comprehension Check: Goldman Sachs and the LIA
13 Comparison of Options to Stocks (and Futures)
  • Take-Aways: Comparison of Options to Stocks (and Futures)
  • Comprehension Check: Comparison of Options to Stocks (and Futures)
14 Different Option Perspectives
  • Take-Aways: Different Option Perspectives
  • Comprehension Check: Different Option Perspectives
15 Intro to Options - Summing Up
Return to Introduction to Options

Introduction to Options

Introduction to Options Sample Lesson
By Lesson's End:
  • You will understand the roles of specialist, floor traders, and quants.
  • You will have some suggestions as to a the best option book to read to get a floor trader's perspective on options.
  • You'll have an idea of what you will learn from the Introduction to Options Course!
Vocabulary List:

  • Inventorier

  • Floor Trader

  • Market Maker

  • Quant

  • Specialist

  • Yield-Seeker

Options are ancient financial tools that helped build the very foundation of our modern, global economy. Far from being mysterious “black-box” weapons of mass destruction, options are useful tools we are accustomed to using every day.

The course…

  • teaches you the characteristics that all options share,
  • offers a working definition of options,
  • compares options to common financial tools,
  • reviews the history of options as financial instruments, and
  • explains the various perspectives of option players.

The snippet from the video you see above is from the lesson “Different Option Perspectives” and talks about one class of option experts that we call “Inventoriers.”

We introduce a bit of option jargon in this course and even touch on the topic of exotic OTC options, but our overall goal is to give you a good perspective on what role options have played and continue to play in the world of international trade and finance. No matter your view of options going in, after completing this course, your appreciation for and understanding of these peerlessly flexible financial tools is guaranteed to deepen.

Supplemental Resources

  • Video Transcript and Vocabulary Definitions
  • Lesson Instructions and Notes on Quizzes
  • Sheldon Natenberg’s Option Volatility and Pricing (Amazon)
  • John Hull’s Options, Futures and Other Derivatives (10th Edition) (Amazon)
  • Paul Wilmott’s Paul Wilmott on Quantitative Finance – 3-Volume Set (2nd Edition) (Amazon)
  • Erik’s The Intelligent Option Investor (Amazon)