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Options Learning Path

This document outlines the steps and objectives for an options trading course. It includes reading materials, exercises, and activities for students to complete. Students are instructed to call a coaching line to discuss topics and get feedback on their results and trading plans at various steps.

Uploaded by

Lorrie Bennett
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
116 views

Options Learning Path

This document outlines the steps and objectives for an options trading course. It includes reading materials, exercises, and activities for students to complete. Students are instructed to call a coaching line to discuss topics and get feedback on their results and trading plans at various steps.

Uploaded by

Lorrie Bennett
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Copyright 2011 optionsXpress, Inc. All rights reserved.

. Member FINRA, SIPC, CBOE, ISE, ArcaEX, BOX, PHLX, and NFA

1


Learning Path: Option Basics
Level 1: Option Basics
Objectives: The objectives for this course include . . .
Complete a Pre-Assessment Evaluation and Risk Assessment
Introduce the optionsXpress Trading Methodology
Provide an Overview of Options
Discuss Option Basics
Understand How to Analyze an Option
Establish the Foundation for Trading Options
Practice Analyzing an Option for Price, Volatility, and Time

Instructions: Check each box as you complete the assignment.
Step 1
Complete the Pre-Assessment Evaluation. Prepare to discuss your results with a coaching
professional on the Coaching Line.
Complete the Personal Risk Assessment. Prepare to discuss your results with a coaching
professional on the Coaching Line.
Complete the Skills Experience Assessment. Prepare to discuss your results with a coaching
professional on the Coaching Line.
Read The optionsXpress Trading Methodology
Watch the following archived sessions:
Following the 5-Step Method Step One
o Find a trending stock
o Call the Coaching line to discuss trend analysis
How do you recognize a trend?
How does market trend impact stock trend?
Following the 5-Step Method Step Two
o Create a fundamental screener
o Call the Coaching line to discuss your screen
What did you include?
Why did you choose it?
Following the 5-Step Method Step Three
o Create an entry system
o Call the Coaching line to discuss your entry system
Is it based on technicals or fundamentals or both?
Will it work in multiple types of markets?
Following the 5-Step Method Step Four
o Place a stock trade in your virtual account
o Call the Coaching line to discuss your risk management rules
What is your portfolio risk?
Do your rules incorporate other factors such as portfolio heat and
diversification?




Copyright 2011 optionsXpress, Inc. All rights reserved. Member FINRA, SIPC, CBOE, ISE, ArcaEX, BOX, PHLX, and NFA

2
Following the 5-Step Method Step Five
o Monitor and journal your trade
o Call the Coaching line to discuss your trade
Did the trade meet your rules?
Why did you pick that trade?
Build a watchlist of 10-30 stocks which meet some of your basic rules

Step 2
Read Introduction to Options
Complete Activity 1.1: Locating Option Chains on OptionsXpress.com
Complete Exercise 1.1: Option Basics

Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
What are the rights and obligations associated with options?
What benefits and risks are associated with option trading?

Step 3
Read Contract Specifics
Complete Exercise 1.2: Calculating Option Pricing
Complete Exercise 1.3: Reading the Option Price
Complete Exercise 1.4: Open I nterest
Complete Exercise 1.5: Option Classification

Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
How are option prices quoted?
Why is open interest important?

Step 4
Read Option Pricing
Read Option Sensitivity
Read A Theoretical Option Pricer
Complete Exercise 1.6: Travis Results
Complete Activity 1.2: Putting It Together



Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
What are your risk control rules?
What are your stock entry rules?
What are your stock exit rules?




Copyright 2011 optionsXpress, Inc. All rights reserved. Member FINRA, SIPC, CBOE, ISE, ArcaEX, BOX, PHLX, and NFA

3
Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
What two components make up an option premium?
What are the three primary factors that impact an options price?

Step 5
Read Trading BasicsOrder Ticket Selections
Read Trading Options Using Stop Orders
Complete Activity 1.3: Using a Stop
Read Position Management
Watch ITM session Risk Management
Complete Exercise 1.7: Determining Portfolio Risk
Complete Exercise 1.8: Estimated Trade Risk
Complete Exercise 1.9: Position Size
Complete Activity 1.4: Your Trading Plan

Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
What type of orders do you anticipate using in your trading?
What are your risk control rules?

Step 6
Complete the Case Study: Trading with a Plan
Place a trade in your virtual account using your current trade rules and watchlist.

Action Required: Call the Coaching Line at 1-888-300-1891 to review what you have accomplished.
Be prepared to discuss the following essential topics:
Why did you pick the trade you did?
Do you have a written trade plan?

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