Equity Options: Accounting, Strategies & Options Operations

In this article, we will talk about the Equity Options Accounting, Equity Options Trading Strategies and , Equity Options Operations for Settlement and clearing. This article will give you a clear picture of what one should be aware of from such a course on equity options and how they should approach this topic of Equity Options.

A Fundamental beginning on Options :

  - Puts and Calls :The two basic kinds of Plain Vanilla Options

  - Covered and Naked Options: The difference between the covered options (protected or risk managed Options) and Naken Options (unprotected or unmanaged)

  - Risk Profiles of various options traders and what positions should one take as per the risk profile

Valuation and Pricing of Options :
  - The concept of "In the Money Options" and "Out of the Money Options" depends on the udnerlying's price with respect to the option strike price

  - Time Value of Options, time Decay in options and why short sellers have an edge over the option buyers

  - The Greeks - concept and calculation of Greeks in Options - Where they come from , what is their significance - The delta, gamma, theta, rho, vega

Options Accounting and Reporting Mechanism:

  - Assets/Liabilities: The concept of Asset v/s liability in options

  - Cost Basis of options trading and positions

  - Statement Layout and formatting

Options Trading & Hedging Strategies: Options are way risky than the money involved in it. It is possible that you get into a position worth 100, but you might end up paying a million, so hedging and risk management is very important for option traders.

  - Covered Calls: The concept and how to configure a covered call

  - Collars

  - Spreads

Volatility Strategies for trading options: How to benefit from volatility trading in options trading. We have two popular combinations as follows

  - Straddles

  - Strangles

Sideway Strategies for trading options:

  - Butterfly

  - Condor

Operations and Settlement Processing:

  - Segregation of Underlying Shares for options trading

  - Exercise and Expiration for options

CDOs CDS Course & Introduction: Collateralized Debt Obligations & Credit Default Swaps

In this article, we will talk about the Collateralized Debt Obligations & Credit Default Swaps CDS CDO Course & Introduction and topics to be covered in the Collateralized Debt Obligations & Credit Default Swaps CDS CDO. The following topics will give a brief overview of Collateralized Debt Obligations & Credit Default Swaps CDS CDO.
Let's start with the basics for the Collateralized Debt Obligations & Credit Default Swaps CDS CDO:
Introduction to CDO or Collateralized Debt Obligations :

  - CDO how do they work - an example of CDO as a limited life bank
  - Working Economic Principles of CDOs
  - How CDO's evolve from asset backed securities

Structure of a CDO or Collateralized Debt Obligations :

  - CDO as SPV or Special Purpose Vehicle
  - CDO as Collateral manager
  - CDO as Collateral (asset) portfolio
  - CDO as Source of cash flows
  - Tranches while configuring the CDO
  - Life Cycle of a CDO

Arbitrage CDOs or Collateralized Debt Obligations: Here we cover the trading as well as arbitrage opportunities available within the CDO's.

  - How Arbitrage works for the CDO for Cash Flow Transactions
  - Fundamentals of CDO cash flow transactions
  - Cash flow waterfall mechanism
  - Market Value Transactions of the CDOs
  - Comparison with cash flow transactions

Balance Sheet CDOs or Collateralized Debt Obligations:

  - An Introduction to Balance Sheet CDOs
  - Common features to arbitrage CDOs
  - Institutional sponsors and their roles in the CDO market
  - Structure of Balance Sheet CDOs

Introduction to CDS or Credit Default Swaps :

  - Fundamentals of CDS or credit default swaps
  - The difference between interest rate IR swaps and the TR total return swaps
  - Allowing room for the the credit risk

Introduction to the Credit Swap Contracts :

  - Contract terms of Credit Swap Contracts - notional, tenor, reference credit(s)
  - Comparison between Single credit swaps and the basket default swaps
  - The mechanism of timely payments requirments by buyer of credit protection
  - Cash settlement vis-a-vis the Physical delivery
  - Black Swans or Extreme Events - bankruptcy, rating down grade, failure to pay, etc.
  - Nth to default baskets

Uses of Credit Swaps:

  - Buy Side: Minimizing credit exposure
  - Sell Side: Increasing exposure to markets/asset classes
  - Shorting underlying credit (seller not long underlying)

Synthetic CDOs: Beyond the plain vanilla CDO's:

  - Synthetic CDOs Introduction
  - Evolved from balance sheet CDOs in European market
  - Distinguishing characteristic - exposure to risky asset through CDS

Fundamentals of Synthetic CDOs:

  - Structure of synthetic CDOs
  - Low risk collateral assets (funded structure)
  - Credit default swaps
  - Reference assets
  - Comparison to cash CDOs
  - Funded versus unfunded CDOs

Derivatives Products & Lifecycle Course & Introduction

In this article, we will give a brief outline about the Securities trading practices on the Derivatives Products & Lifecycle Course & Introduction and topics to be covered in the Derivatives Products & Lifecycle Trading activities. When it comes to derivatives, its easier said then done. All people end up doing is making bets in the name of derivatives.
Let's begin with the basics for the Derivatives Products & Lifecycle Course & Introduction:

Introduction to Derivatives Products & Lifecycle: Here, the course covers the following details about Derivatives.

  - Types of Derivatives and their classes and categorization

  - Characteristics of Derivatives Contracts and Derivatives Markets

  - Over-the-Counter (OTC) V/s Listed (Exchange Traded) - Derivatives Markets

  - Derivatives Market Participants and How Their Trading Impacts Derivatives Markets

Derivative Instruments Terms and the specific Characteristics of Derivatives :

  - Types of Derivative Contracts

  - Contract Features and Position Considerations


OTC and Exchange Trading of Derivatives:

  - Listed Trading

  - Over-the-Counter Trading of Swaps, Forward and Option Contracts

  - Post-trade Activities

Regulation of Derivative Markets: The regulatory requirements of Derivatives are much stringent than those of plain vaniall equity markets. Why? Just because the risk is much higher. What if you enter into any specific contract and then when the position goes against you, you run away.

Trends in Derivatives Markets:

  - Current Trend

  - Future Trend and how to analyse it