Options trading is an exciting way to participate in the financial markets with minimal capital but maximum risk. I fell in love with options while learning about them in Business school. Black-Scholes and all that. I wouldn’t start trading them for another few years. Back then, it was more about the math behind options and other derivatives rather than the trading opportunities.
The reason I am telling you this is because I think options are beautiful. But my passion was born out of intellectual curiosity rather than a profit motive. Don’t just dive into options to make a quick buck. You will likely just burn out that way. Take the time to understand them and you will gain a skill that will serve you for life.
In the paragraphs below, I have tried to compile a list of some of the best options trading courses I found on the internet. If you are looking for get-rich-quick-courses, this list is not for you. These are mere methodical courses for those willing to spend some time and effort to learn about options and how to trade them effectively.
Before you start
- Understand that options trading is inherently higher-risk/ higher-reward compared to something like normal equity trading. It’s not for everyone.
- Never invest more than you are willing to lose. Everyone makes losing trades sometimes and you need to be able to absorb them.
- Courses are only meant to teach you how things work. There are no magic pills or super secrets to learn. The deeper you dig, the more math you will find.
- It may be a good idea to trade using a mock account for a few days before you dive into the real thing.
With that out of the way, here we go.
1. Options Trading for Rookies
This course consists of a healthy mix of theory and practice. I personally always go heavy on the theory first, but I know that is not the ideal way to create interest which is why I think this course strikes a good balance. Which means you get to learn how options fundamentally work and you also get to learn how to trade them in the real world.
This is a beginner friendly course and most learns will find the concepts easy to grasp. There are a couple of hours of videos that cover the concepts and then dive right into practical applications. You will find answer to questions like: What happens to an option when the underlying stock goes up? What’s the difference between buying and selling a call? How does probability factor into all of it? This is a short and sweet introductory course to get you started.
The second course may be considered an accompanying module from the same author that goes more into trading strategy. The major focus is on vertical strategies which is good starting point. Plenty of useful tips and some real life examples help drive home the learning.
- Time to Complete: Around 10 hours for both courses.
- Offered fully online and on-demand. Complete at your own pace.
- An introductory course to options trading for absolute beginners.
Course 1: Understand Options Completely Course 2: Basic Stock Options Strategies
2. Derivatives – Options & Futures
This is a more academically oriented course, but I still highly recommend it to any serious future traders because you do need to know your “Greeks” and other core concepts in options trading. This is a great course for that, and it goes into far greater detail than the above-mentioned course. If you have already taken that course and want more, this is the one I would recommend. Or if you are like me and want to learn the theory first, then this is also the place to start.
This course will take you about 15-20 hours to complete and will take you through options market mechanics, basic options trading strategies, risk variables, and so on. This course is part of a broader trading specialisations that covers bonds and equities as well and you can choose to take those additional modules if you need a primer on stocks but its not otherwise necessary. Options of course require some basic understanding of how stock trading works so keep that in mind.
Topic coverage includes option types, contract components, put-call parity, greeks, options strategies, bear and bull markets and option behavior during those times, covered calls, neutral market strategies and so on. This course should give you added confidence to deal with options and better predict their behavior.
- Time to Complete: Should take around 15-20 hours based on your skill level.
- Offered fully online and on-demand.
- A more in-depth course that goes equally into theory and practice of options trading.
3. Derivatives Professional Certificate from NYIF
If you really want to go all out and already have an advanced understanding of the financial markets, this is the course for you. This is the course that I recommend to investment bankers who want to break into the field. It is a proper deep dive into options trading as Wall Street does it.
You learn all the basics of options while also diving deep into advanced topics like options pricing models, contract terms in an options contract, market participants and their roles and strategies etc. Option pricing is of course a major area of focus and perhaps the main point of interest for most learners. Its a complicated topic and economists Merton and Scholes were actually awarded a Nobel prize for their option pricing model in 1997!
Options are also used extensively for risk management, hedging and arbitrage in the real world. The last module of this certification dives deep into that area and covers topics like yield curves, volatility trading, calendar spreads, hedge effectiveness, risk arbitrage, the use of probability theory in options and so on. You will also be taught desk ready skills that professional traders have to utilize on the job. This certification is a unique opportunity to get an insider’s look at how the professionals do options.
- Time to Complete: The course is available as a completely self-paced option which takes about 30 hours. Alternatively, you can even opt for virtual classroom training over the course of 5 days.
- Offered fully online and on-demand. Virtual classroom option also available.
- A professional options trading course meant for investment bankers and traders.