Series 7: Fundamentals of Options

Name: Series 7: Fundamentals of Options
Rating: 4.6 (399 reviews)

Helping you understand Options and How they Work

Created byGuillermo Nodarse

Last updated 3/2017

English

English [Auto],Korean [Auto],

What you'll learn

Understand the fundamentals of Options and how they function

Course content

1 section • 17 lectures • 1h 24m total length

Series 7: Options Introduction3:25
Acquire a firmer understanding of the fundamentals of options and boost your Series 7 exam confidence by learning core concepts and test-taking strategies for the options section.
Module 1: What is an Option3:47
An option is an agreement between a buyer and seller to buy or sell an asset at a predetermined price between now and a predetermined date.
Module 2: Example of an Option5:21
See how a land option demonstrates the three elements of an option contract—underlying asset, predetermined price, and date—plus a premium to lock in a future purchase and profit.
Module 3: Equity Options3:34
Equity options include calls and puts on an underlying asset, with a price and date; calls give buyers the right to buy, while sellers commit to sell for a premium.
Module 4: Equity Options (Continued)2:08
Master equity options basics by examining puts and calls, the three elements, and how a put lets you sell the underlying at a set price by a set date.
Module 5: Call Options (Stocks/ Equity)5:28
Learn how call options on stocks work, including 100-share contracts, premiums, and the right to buy IBM at sixty, with value driven by stock movements.
Module 6: Call Options (Stocks/ Equity Continued)5:24
Analyze call options on stocks, including 100-share contracts, strike price, expiration, and how intrinsic value defines in, at, or out of the money.
Module 7: Call Options (Stocks/ Equity Continued)5:35
Explore how call options on stocks work, using IBM with 60 strike and 3 premium on 100-share contract; including expires worthless, close out, or exercise for 17 dollars per share.
Module 8: Call Options (Stocks/ Equity Continued)5:37
Explore why call buyers are bullish on IBM, including speculating, locking in a 60 strike, diversifying holdings, and hedging short positions, with unlimited gain and limited losses.
Module 9: Call Options (Stocks/ Equity Continued)5:12
Explore why traders sell call options, including speculation for premium income, using covered calls to boost returns, and hedging long positions, while understanding naked calls and risk of unlimited losses.
Module 10: Call Options (Stocks/ Equity Continued)8:44
Compare naked and covered call selling, explain the obligation to sell at 60, and outline the three outcomes—exercised, expires, or close out.
Module 11: Put Options (Stocks/ Equity)5:52
Explore put options from the buyer's bearish perspective. Identify in-the-money, at-the-money, and out-of-the-money scenarios using an IBM example with a 60 strike, and highlight intrinsic value and payoff dynamics.
Module 12: Put Options (Stocks/ Equity Continued)4:47
Learn put options as tools to speculate, lock in a sale price, or hedge long stock, with loss limited to the premium and gains up to the strike minus premium.
Module 13: Put Options (Stocks/ Equity Continued)5:18
Sell puts to collect a premium while obligating you to buy IBM at 60. Learn motivations—speculation, increasing returns, or buying stock below price—and how max gain and max loss work.
Module 14: Put Options (Stocks/ Equity Continued)5:22
Evaluate how buying or selling a September 60 IBM put affects payoff, premium, and stock movement from 65 to 30, illustrating the option's value versus the underlying asset.
Module 15: Terminology5:13
Define options basics: strike price, expiration, premium, intrinsic value, and time value, and categorize calls and puts as in the money, out of the money, or at the money.
Module 16: Summary3:47
Explore how option contracts function as derivatives, with three core elements: underlying asset, strike price, and expiration date, outlining how buyers gain rights and sellers assume obligations.

Requirements

Students will need to have purchased a Series 7 Instructional Course, which typically includes a Textbook and Test Questions

Description

Are you scheduled to take the Series 7 - and are anxious regarding your ability to pass this important test? If so, you are not alone; the Series 7 is one of the most stressful and challenging tests in any industry, and often times, one's future employment depends on passing the exam the first time around. Perhaps the most challenging section of the test involves Options and how they work, as well as the investing and hedging strategies that are available through their use - and few sections prove more difficult for Series 7 students. Unfortunately, the Options section often represents between 10-12% of all the questions on the entire test, so mastering this material is critically important.

This Fundamentals of Options Seminar will begin at the beginning, emphasizing the conceptual underpinnings of Options - what they are, how they function, and how they are used to achieve certain desired investment outcomes. Without a clear and strong understanding of these fundamental principles, it is extremely difficult to master Options, and passing the Series 7 then becomes even more challenging.

Once you've taken this course you'll have a much stronger grasp of the key principles regarding Options. But in order to help you understand and master the more complex applications and strategies using these contracts, I created my Intermediate Options Seminar - which will further strengthen your understanding of Options and help make you a more confident and effective test taker.

Who this course is for:

Our target student is anyone scheduled to take the Series 7 test in order to be Securities licensed and able to work in the Securities industry