What inputs are important in valuing a European Call option on a stock? How do you value an American Put option? When should you exercise a Call option before its expiry? What about a Put option? What’s the difference between a Forward and a Future?
Options Explained Simply – The Fundamental Principles Course will give you an intuitive and sound understanding of what Futures and Options are, how they are valued, and how they behave in changing market conditions. It will empower you to analyse Futures and options intelligently.
No prior financial knowledge or advanced mathematical ability is required to follow this course; all that is required is confidence with arithmetic, basic algebra, calculating averages, simple interest, and reading tables and graphs.
First, the relevant fundamental financial concepts are explained, namely, Spot transactions, Arbitrage, Expected Value, Risk, and the Time Value of Money. Then, Forwards and Futures are explained, and then, Options.
The following steps are also taken to promote learning and understanding:
- The subject matter is often taught with reference to familiar, real-life scenarios.
- The amount of detail is simplified to keep the subject matter clear and unclouded by unnecessary layers of complexity.
- Visualisation, an important and powerful means for learning for most people, is utilised extensively. Often, the written explanations given are complemented with graphical illustrations to clarify the subject matter more than words alone do. The calculations presented are visually transparent with every key step in them shown shown clearly. Colour is used to emphasise and clarify key points.
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