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Introduction to Stock Options, a Fundamentals course that I will be teaching entirely online. I have prepared this document to help make your online educational experience as positive and enjoyable as possible. It contains contact information, a description of our course delivery system, course mechanics, and a course schedule.
How to get Started:
This course is conducted through an online classroom. You will need to go to this classroom to obtain your lessons, work through tutorials, take quizzes, complete assignments, participate in discussions with your fellow students, and ask questions of your instructor. As soon as the registration office verifies receipt of your payment, you will be able to participate. Here's how it works:
- Wait until after 12:00 a.m. (Pacific Time) on the start date for this course.
- After the course begins, go to
https://www.ed2go.com/saccomserv/. The Online Classroom is open 24 hours a day and seven days a week, so please feel free to log in to your classroom at any time of day that is convenient for you.
- Once on the website, click the Login link at the top right of the page.
- Finally, log in with the username and password you provided us at the beginning of this orientation procedure. You should then be able to enter the online classroom and begin your studies.
Course Description
If you've ever wanted to learn how to evaluate, buy, sell, and profit from stocks, this course is for you. By the end of it, you will be armed with investment tools that were once thought to be only for the pros!
You will begin by examining the origin of stock options and learn the real risks involved. Then, you will identify the jargon, symbols, and other peculiarities of options in a way that's easy to understand. You will explore exchange-traded funds (ETFs), which offer exciting option investments you may eventually consider.
The course will then give you a look under the hood of option pricing so that you'll understand what contributes to an option's value. You will learn why some options are overpriced and why some are underpriced and know how to tell the difference before you trade. Above all, you will learn how to protect your portfolio and profit in a down market, an up market, or even a flat market. Learn to leverage your investment dollars for potential profits that surpass those possible with stocks.
Course Requirements
Requirements:
Hardware Requirements:
- This course can be taken on either a PC, Mac, or Chromebook.
Software Requirements:
- PC: Windows 8 or later.
- Mac: macOS 12 or later.
- Browser: The latest version of Google Chrome or Mozilla Firefox are preferred. Microsoft Edge and Safari are also compatible.
- Adobe Acrobat Reader.
- Software must be installed and fully operational before the course begins.
Other:
- Email capabilities and access to a personal email account.
Instructional Material Requirements:
The instructional materials required for this course are included in enrollment and will be available online.
Course Mechanics
I will make two lessons available to you every week for six weeks. You do not have to be present when a lesson is released, but you'll need to complete each lesson within two weeks of its release.
Once all 12 lessons have been released, I will give you a two-week grace period to complete your studies and take the final exam. This means that you have a total of eight weeks to complete this course. If you're thinking of taking another course after this one, you can avoid overlap by starting that course exactly two months after this one begins.
Lessons are released by 12:00am (Pacific Time) on Wednesdays and Fridays. To access your lessons, simply visit the online classroom (as described in the "Getting Started" section), and then click the lesson title you wish to visit.
Once the class access ends, I won't be able to send you the lessons. If you would like to keep the lessons for future reference, I suggest using the print lesson feature in the classroom.
Each time you complete a lesson, you will also be asked to complete a brief multiple-choice quiz. I expect you to complete each quiz within two weeks from the date that the corresponding lesson was made available. I realize that you are busy, and don't want you to worry if you can't complete a few of the quizzes on time due to illness, vacation, or other commitments. Once I release a lesson and quiz, I will make sure it is available to you as long as the classroom is open.
The interactive multiple-choice quizzes are designed to test your comprehension of the course material. When you complete a quiz, you will receive an instant analysis of your work.
This analysis will include a brief explanation of any errors you may have made. If you are not satisfied with your performance, you are welcome to re-take the quiz until you feel that you have mastered the quiz objectives.
Note: If you ever want to see a progress report showing your performance on the quizzes over time, simply return to
https://www.ed2go.com/saccomserv/
and click Login or Account at the top right of the page. Once logged in, click the Report tab under the course title.
Some of your lessons will also be accompanied by an assignment. The assignments are designed to help you expand your understanding of the material taught in this course. Assignments are typically more detailed and may take a bit more time to work through than quizzes.
I expect you to complete each assignment within two weeks from the date that the corresponding lesson was made available. Unlike the quizzes, your assignments will not be evaluated. Assignments are designed primarily for your enrichment. You have the sole responsibility for evaluating your performance on each assignment. If you have questions about an assignment, please feel free to use the Discussion Areas to discuss your assignments with your fellow students and me.
When you work through an assignment, you will be gaining practical first-hand experience with the new skills taught in this course. Your performance on the final exam will depend in no small part on your mastery of the assignments.
The course will conclude with a final exam, which will test your comprehension of the material covered in this class. You must complete the final exam within two weeks from your receipt of lesson 12. Please review your selections before submitting. You may only submit your final exam answers once. Your performance on the final exam is the only factor we will consider when determining your eligibility for a certificate of completion. Although your quiz and assignments will not count toward your eligibility for a certificate, I do recommend that you try to complete each quiz and assignment to the best of your abilities. Doing so will leave you better prepared to pass the final exam.
When you finish your studies, please note that our classroom log-out process is fully automated. We will log you out of the classroom automatically whenever you close your browser or shut down your computer.
Questions
This course can be highly interactive, but the level of that interactivity is controlled by you. Since I can't see that puzzled look on your face, it's going to be up to you to ask questions when you get stuck.
I expect to get many interesting questions from you and your fellow students. I want to make sure that you and your classmates benefit from these often illuminating queries.
Therefore, I would like to request that you avoid e-mailing your questions to me. Instead, I have created 12 Discussion Areas in the online classroom (one Discussion Area for each lesson). To reach these Discussion Areas, all you will need to do is wait for the course to begin, go to the online classroom, select the lesson you're working on, and click the Discussion Area tile.
Your Discussion Area questions will serve as a challenge for your fellow students. Someone is bound to have an answer for you. Likewise, you should be able to find questions in the Discussion Area that you can answer. The Discussion Area will be open to you and your classmates 24 hours a day and seven days a week. Please try to visit the Discussion Area at least every other day while the course is in session, and don't be afraid to participate!
I firmly believe that the best way to learn a new skill is to teach it to others. We will all benefit by helping one another understand this complex material.
Because I don't want to see any unanswered questions, I (or one of my very capable teaching assistants) will be monitoring the Discussion Area at least every other day (excluding weekends and holidays). If you ask a relevant question, but fail to get a correct answer (or any answer whatsoever) from your classmates, then we will try our hardest to answer the question for you.
Please understand that the Discussion Area is reserved for conversations about the material in your lessons. While it is perfectly acceptable for you to employ a bit of friendly banter as you converse with your fellow students and instructors, I must ask you to always remember to stay on topic.
It is not appropriate to use the Discussion Area to sell goods or services, complain about something, or talk about subjects that are not specific to the lesson at hand, for example. Such off-topic conversations waste people's time and detract from the learning experience for all involved. I reserve the right to immediately delete any message without comment if I feel that it does not pertain directly to the material I am trying to teach.
I will also delete any messages containing language that I feel is derogatory, controversial, insulting, or otherwise inappropriate for my classroom.
Reminder
A legitimate organization would never send you an unsolicited e-mail that contains an attachment or asks for personal information. If you ever receive an unsolicited e-mail that contains an attachment or asks for personal information, delete the e-mail immediately.
When to Write my Course Administrator
As I mentioned earlier, the course Discussion Area is reserved solely for discussion of the material in your lessons.
Please do not use the course Discussion Areas for compliments, complaints, technical support, or other personal matters. Instead, please send such messages directly to my course administrator.
To contact the course administrator, scroll to the very bottom of any page within the classroom and look for the Support link.
Please understand that it may take my course administrator two or sometimes three business days to respond to e-mail, so provide plenty of time for a response.
If you need an extension, forgot your password, want a progress report, want to register for another course, or need help when you're not in my classroom, you can contact Student Support using the Help link under Resources in the footer of any page at
https://www.ed2go.com/saccomserv/.
Syllabus
Note: This course will run for six weeks. Two lessons will be released each week for the six-week duration of the course. You do not have to be present when each lesson is released. Instead, you can take up to two weeks to complete each lesson after it is released.
Important: In order to keep this material as up-to-date and informative as possible, I reserve the right to make changes to the course content, description, and syllabus at any time and without warning.
A new session of each course we offer starts on the second or third Wednesday of every month. You may enroll in more than one course at a time. If you are enrolling in a series of two or more courses, please be sure to space the start date for each course at least two months apart.
Week 1
Defining Stock Options
Wednesday
Are stock options worth your time and effort? You'll find out in this lesson. You'll explore where options originated and whether they are as risky as many people say. Then you'll go over the formal definition of an option so that you'll know exactly what you're dealing with. Finally, you'll look at some easy-to-understand examples to drive home each element of that definition.
Basic Terms and Concepts
Friday
What does "GOOG120121C00680000" mean, and why should you care? Every investment specialty has its own jargon, and options are no exception. This lesson will explain option symbols and other peculiarities in a way that's easy to understand. By the end of this lesson, you'll be able to identify any option just by looking at its symbol. You'll also explore exchange-traded funds (ETFs), which offer exciting option investments you may eventually consider.
Week 2
Understanding Option Price Charts
Wednesday
One of the most important things to consider before you buy anything is its price. In this lesson, you'll learn where to find option prices, what they look like, and how to interpret each element in an option pricing chart. By the end of the lesson, you'll be a good option detective.
Understanding Premium Pricing
Friday
It's one thing to know an option's price, but it's quite another to know if that price is reasonable and fair. This lesson gets under the hood of option pricing so that you'll understand what contributes to option value. Knowing what makes one option more expensive than another is one of the essentials of option pricing. After you finish this lesson, you'll be able to make educated decisions when you trade.
Week 3
Option Profit-Loss Graphs
Wednesday
This lesson introduces you to an easy graphing system that will show what kind of profit or loss may be possible when you trade any option. These graphs bring clarity to even a complex option strategy. Armed with this knowledge, you'll enter any option trade fully aware of potential risks and rewards. You'll also know precisely where your break-even point is. All this information contributes to a fully informed trading experience.
Buying Long Call Options
Friday
Get ready to learn about your first basic option strategy—the long call. When you finish this lesson, you'll know the best way to profit when you think a stock price is about to go up. You'll also understand which option to buy depending on how bullish you are about that price movement.
Week 4
Selling Short Call Options
Wednesday
This lesson will tell you where options come from and how you can create them yourself. How? By selling a call option. This is called naked call writing, and it's one way you can use options to profit when you think a stock price is going to hold steady or drop. You'll learn the risk inherent in this strategy and what it means to be assigned.
Covered Call Options
Friday
You'll explore covered calls in this lesson. This strategy involves selling call options on stock you already own. It's a popular way of making a profit even when your stock's price isn't going up. You'll learn the how, when, and why of this essentially conservative strategy in one easy lesson.
Week 5
Buying Long Put Options
Wednesday
Certain options profit when a stock drops. This lesson acquaints you with the put option, which is in many ways the mirror image of the call option. The versatility of the put option is very impressive.
Selling Short Put Options
Friday
Few investors know the benefits—much less the in and outs—of selling put options, but this lesson will fully acquaint you with both. Known as writing naked puts, this strategy is also a way to buy stock for less. There's something to be said for collecting your profit up front and putting that money to use immediately!
Week 6
Advanced Option Strategies
Wednesday
See the beauty of options as you learn about three combination strategies: the bull spread, the bear spread, and the long straddle. This taste of more advanced option strategies may whet your appetite for other, more esoteric combinations—and there are many. After this lesson, you'll have a good sense of how you can use option combo strategies to make profitable trades.
Course Summary and Guideposts
Friday
This is the lesson that pulls together everything you've learned into one cohesive overview. You'll also learn about market sentiment and examine how it influences which option strategy is appropriate and when. Finally, the lesson will discuss the concept of risk and how it's an integral consideration for any option investment strategy.
Instructor
Matt Crabtree
Matt Crabtree, CFP ®, earned his Bachelor of Science in Business, Information Systems Management, in 1999, a mini MBA certificate from The School of Management at Yale University in 2004, a certificate in Financial Planning from Pepperdine University's Graziadio School of Business in 2012 and has received the financial industry's most rigorous and prestigious professional designation of Certified Financial Planner ™. After many years in project management, office management, and business sales, Matt began training individuals and organizations in areas of business finance, leadership development, successful negotiations, sales management, and customer service excellence. Matt has trained individuals and various units within the U.S. Department of Defense, as well as corporate organizations including IBM (technology), Accuray (healthcare-technology), and Gen-Probe (molecular diagnostics). Matt's natural aptitude for explaining his material in an easy-to-understand and enjoyable manner allows each student to gain insights into areas that are often considered challenging.