This course encompasses the fundamentals of equity and index options trading. It begins with a study of probabilities and normal distributions because this forms the basis of how options are priced. This leads to a discussion of implied volatility, time decay, and the Greeks. The Greeks are mathematical parameters used by option traders in two specific ways: 1) analysis of various trade candidates and differentiation of the risks of each trade, and 2) for managing an ongoing trade, the Greeks quantify the risks and signal the need for adjustments to the position. The strategies of covered calls, selling naked puts, married puts, and collars are presented and discussed in detail. Appropriate stock candidates, market conditions, risk management, expected returns, and trade management are discussed for each of these strategies. LEAPS, or long term options, are discussed as stock investment surrogates, a less expensive way of long term investments in stocks.

Each class includes a homework assignment that will be reviewed at the beginning of the next class; this ensures a practical understanding of the previous class topics. This course ends with a thorough discussion of vertical spreads and their use in bullish, bearish and sideways strategies. Vertical spreads are also used to introduce more complex, multi-legged options strategies that will be discussed in detail in the Advanced Options Trading class. Students completing this course will be prepared to:

• Use covered calls and sell naked puts as income generation strategies
• Use covered calls to supplement the income from a long term stock portfolio
• Employ the selling naked puts strategy to buy stocks at a discount for long term holdings
• Buy puts as "stock insurance"
• Use the collar when one is uncertain about a stock's future
• Buy LEAPS as a cheaper method of longer term investing in individual stocks
• Use vertical spreads as directional trading strategies on individual stocks or the broad market indexes

Students will receive: