Exchange-Traded Futures and Options

Financial Regulation Courses (FRC)

Overview

The Exchange-Traded Futures and Options course, offered by Financial Regulation Courses (FRC), provides a comprehensive understanding of futures and options trading on derivatives exchanges.
Covering key components such as derivatives exchanges, trading platforms, futures pricing, and options pricing, the course enables learners to navigate complex trading systems and pricing models.
Learners will gain practical skills to trade and manage contracts confidently, understanding the structure of major exchanges and applying futures and options pricing in real-world scenarios.

Learning Objectives

By the end of this course, learners will:

• Understand the structure and functions of derivatives exchanges globally, including their trading platforms and membership mechanisms.


• Comprehend the fundamental concepts of futures pricing, including cost of carry, contango, backwardation, and fair value.


• Apply techniques to calculate the fair value of futures and analyse pricing relationships.


• Learn the key determinants of options pricing, including intrinsic and time value, volatility, and the effects of strike price and expiry.


• Grasp the processes of order flow, trade execution, and the role of market transparency in futures and options trading.


• Understand hedging strategies and manage basis risk effectively.


• Identify arbitrage opportunities and apply strategies like cash and carry arbitrage in the derivatives markets.

Learning Outcomes

Upon successful completion of the course, learners will:

• Demonstrate a thorough understanding of the global derivatives exchanges and their trading operations.


• Accurately price futures contracts, apply the cost of carry concept, and recognise market conditions such as contango and backwardation.


• Perform fair value calculations for futures and equity index futures.


• Price options using key determinants such as volatility, time to expiry, and underlying asset price, while understanding the Put/Call Parity Theorem.


• Navigate order types, execute trades effectively, and interpret trade reporting and market transparency data.


• Manage hedging positions, anticipate changes in basis, and apply arbitrage strategies to mitigate risks.


• Utilise pricing models such as Black-Scholes and Binomial models for real-world futures and options contracts.