Weapons of Financial Destruction: Options in Practice

Warren Buffet coined options "Weapons of Financial Mass Destruction" yet even he turned the launch keys. What did he mean, and why did he use them? Learn the core mechanics and use-cases of options in the real-world for investors ranging from retail to institutional scale.

Live remote instruction
Real world exercises
Industry experts
One-on-one mentorship
Sammer Sabri
Options in Practice

Experience:

About the Course

As contracts for buying and selling stocks, options are conceptually straight forward to understand, yet they rarely behave in straight forward profit and loss patterns. Many years ago even savvy traders had difficulty gaining market access in order to simply browse option quotes. Execution was slow, uncertain and expensive. For the most part they were described as dangerously levered financial instruments best left to the traders at Wall Street hedge funds.

Today, commission free options trading is only a few clicks away; access to option chains and real time quotes are nearly ubiquitous; and anyone with a phone can trade from nearly anywhere in the world. And while the idea of leveraged contracts and defined risk with appealing profit potential is quite alluring, options have become no less opaque in their behavior.

In this course, we'll explore the ways in which options function not only at expiration, but also with several weeks or even months left until expiration. We'll learn the effect that volatility has on the price of an option. We'll see how being right on the directional move of the underlying doesn't always translate into profit. And we'll learn how hedge fund traders anticipate those qualities to harness profits.

We'll explore strategies that we can apply to portfolios that may not have the resources to trade as large or as dynamically as institutional books. We'll discover how to structure profitable positions for volatile, slow and even unchanging markets. And we'll see how utilizing options to express our market view is the most optimal way to deploy our capital.

What are you going to learn?

  • Overview of options basics
  • How is volatility measured and what is the VIX?
  • The relationship between implied and historical volatility
  • What is vol arb?
  • How to be wrong and still make profitable trades
  • How to harness large underlying moves for little to no premium

Options Basics

  • What are options
    • Puts/Calls
    • Options in everyday life
  • Synthetics
    • PnL charting
      • SC, LC, SP, LP
    • Synthetics
      • Stock vs Options
    • How are Derivatives related to the Underlyings
      • Reversals/Conversions
      • Put/Call parity formula

Advanced Options

  • The qualities of options, aka the Greeks
    • Delta
    • Gamma
    • Theta
    • Vega
    • Rho
  • Volatility
    • How is it measured
    • Theroetical vs Implied
    • What is the VIX?

Option Combos

  • Call Spread
  • Put Spread
  • Straddle
  • Strangle

Projecting Breakevens (at expiration)

  • CS, PS, Straddle, Strangle
  • Stock + Options combos
    • Covered Call
    • Married Put

Trading options to express your view

  • Long Options vs Short Options
  • Big moves, Small Moves, No moves
  • Movement over time
  • Units

Trading Options

  • Options Chains
  • Bid, Ask
  • Greeks
  • OI
  • Bid/Ask Spread, Hidden Markets

Trading Vol

  • Stock Goes Up, Calls Go Down?
  • Earnings Straddles
  • 1x2s
  • Rule of 16
$1,795
$2,450 if you apply before Nov. 10
$150 tuition rebate per student that you refer — and they get $150 off their tuition, too.
APPLY NOW
$ 2,950.00 USD
Duration: 
Upcoming start dates:
November 30, 2020
December 7, 2020
December 14, 2020
December 28, 2020
January 4, 2021
Time requirements:
2 weeks live instruction + 4 weeks group project
Exact schedule will vary slightly around holidays.
Resume preparation:
  • Live project for corporate sponsor
  • Alpha Fellowship resume editing & LinkedIn profile review

About the Course

About the Course

As contracts for buying and selling stocks, options are conceptually straight forward to understand, yet they rarely behave in straight forward profit and loss patterns. Many years ago even savvy traders had difficulty gaining market access in order to simply browse option quotes. Execution was slow, uncertain and expensive. For the most part they were described as dangerously levered financial instruments best left to the traders at Wall Street hedge funds.

Today, commission free options trading is only a few clicks away; access to option chains and real time quotes are nearly ubiquitous; and anyone with a phone can trade from nearly anywhere in the world. And while the idea of leveraged contracts and defined risk with appealing profit potential is quite alluring, options have become no less opaque in their behavior.

In this course, we'll explore the ways in which options function not only at expiration, but also with several weeks or even months left until expiration. We'll learn the effect that volatility has on the price of an option. We'll see how being right on the directional move of the underlying doesn't always translate into profit. And we'll learn how hedge fund traders anticipate those qualities to harness profits.

We'll explore strategies that we can apply to portfolios that may not have the resources to trade as large or as dynamically as institutional books. We'll discover how to structure profitable positions for volatile, slow and even unchanging markets. And we'll see how utilizing options to express our market view is the most optimal way to deploy our capital.

What are you going to learn?

  • Overview of options basics
  • How is volatility measured and what is the VIX?
  • The relationship between implied and historical volatility
  • What is vol arb?
  • How to be wrong and still make profitable trades
  • How to harness large underlying moves for little to no premium

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