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Trading foreign exchange, commodity futures, options, precious metals and other over-the-counter or on-exchange products carries a high level of risk and may not be suitable for all investors. This material is meant to be used solely for educational purposes and is not meant to provide trading advice.

Beginner Level

Chapter 1

  • It All Begins with a Handshake
  • Call & Put Options
  • Size Matters – Contract Size
  • Currency Pairs
  • Long and Short Position

Chapter 2

  • FX Options Expire
  • European and American Style Options
  • Bid and Ask Prices
  • FX Call and Put Contract Specifications
  • In the Money, At the Money or Out of the Money
  • Intrinsic and Time Value
  • Payoffs and Cash Settlements

Chapter 3

  • FX option profits and returns
  • Risk
  • Naked versus covered or hedged short option positions
  • Margin trading leverages potential gains— and losses
  • When you trade on margin
  • Margin requirements for FX options vary

Level Review

Intermediate Level

Chapter 1

  • Multi-leg bullish and bearish strategies overview
  • Spreads (Credit spreads and debit spreads, Vertical call spreads, Vertical bull call spread, Vertical bear call spread, Vertical put spreads, Vertical bear put spread, Vertical bull put spread)

Chapter 2

  • Spreads (cont) (Calendar spreads, Market-neutral call calendar spreads, Bullish call calendar spreads, Market-neutral put calendar spreads, Bearish put calendar spreads, Market-neutral butterfly call spread, Market-neutral butterfly put spread, Bullish butterfly call spread, Bearish butterfly put spread)

Chapter 3

  • Beyond Spreads: Straddles and Strangles
  • Straddle
  • Strangle
  • Going short versus going long in spreads, straddles and strangles
  • Types of orders (Market orders, Stop orders, Limit orders, Order type durations for GTC, EOD and GTW, Contingent orders, OCO: One cancels the other)

Level Review

Advanced Level

Agenda

  • Option values and risk management
  • The Greeks (Delta, Gamma, Theta, Vega)
  • Risk Management
  • What Is Hedging?
  • How Do Investors Hedge?
  • Advanced techniques

Level Review

Strategies for Spot Traders

  • Using Long Options as Protection
  • Using Short Options as Limit Orders
  • Using Short Options as Stop Orders
  • Using Options to ”Collar” a Spot Trade

Advanced Options Strategies

Bearish Options Trading Strategies

  • Buy Put
  • Sell Call
  • Bear Spread
  • Bear Diagonal Spread
  • Put Hedge

Bullish Options Trading Strategies

  • Buy Call
  • Sell Put
  • Bull Spread
  • Bull Diagonal Spread

Neutral Options Trading Strategies

  • Sell Straddle
  • Sell Strangle
  • Long Butterfly
  • Calendar Spread
  • Covered Call

Volatile Options Trading Strategies

  • Buy Straddle
  • Buy Strangle
  • Short Butterfly

Option Value Simulator (tool)

Option Calculator (tool)

Glossary

Resources

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Level Review

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