Learn essential concepts of options markets in this comprehensive FRM Part 1 video lecture covering Chapter 12 of Book 3. Master key topics including various types of options, moneyness definitions, payoff functions, profit and loss calculations, and exchange-traded stock option contract specifications. Understand how dividends and stock splits affect option terms, explore trading mechanics including commissions, margin requirements, and exercise procedures, and gain insights into specialized securities like warrants, convertible bonds, and employee stock options. Delve into practical applications through exam-style questions while learning from a GARP-Approved exam preparation provider. Build a strong foundation in options trading fundamentals necessary for the FRM certification, including contract standardization, Options Clearing Corporation operations, and the distinctions between different strike options and nonstandard products.
Overview
Syllabus
Intro
Learning Objectives
Describe Various Uses
Define Moneyness
Exam Question
The difference between the payoff and the profit and loss
The payoff of a call position
The payoff of a put
Exchange traded stock option contracts
Multiple strike options
Nonstandard options
Commissions
Margin Requirements
Options Clearing Corporation
Standardization
Warrants
Convertible Bonds
Conclusion
Taught by
AnalystPrep
