Advanced Options Analysis

Deep dive into Probability, Greek subtleties, and Options simulation. Learn how they affect Option prices and strategies

Last updated 2022-01-10 | 4.3

- Master the concept of probability as it applies to Options markets
- Understand the various subtleties of all four Option Greeks
- Put an "edge" into your trades in your favor with these advanced analysis techniques

What you'll learn

Master the concept of probability as it applies to Options markets

Understand the various subtleties of all four Option Greeks

Put an "edge" into your trades in your favor with these advanced analysis techniques

Know how your Options position will perform under all conditions BEFORE YOU PUT YOUR TRADE ON.

* Requirements

* Basic Options knowledge of Calls and Puts
* Basic knowledge of Option Greeks

Description

This course covers three advanced Options concepts - Probability, Advanced Options Greeks analysis and Options Simulation

SECTION I - DEEP DIVE INTO PROBABILITY ANALYSIS

While Probability has been mentioned a few times in previous courses, we take a deep dive in this course. Having a finely tuned probabilistic mindset coupled with good analysis is an absolute must in financial markets. This course shows a few different ways of looking at Probability and how investors can create strategies to put Probability on their side.

SECTION II - DEEP DIVE INTO THE OPTION GREEKS

This course also takes a deep dive into the four Greeks - Delta, Gamma, Theta and Vega. We introduced these concepts in the previous module, but it is time to take their understanding to a new level. The Greeks are the path to putting your strategies on "Auto-pilot". We explain the subtleties of all the Greeks - very cool stuff, put your Math hat on...

What you will master

What is the importance of statistical price modeling in the stock markets
Why is Standard Deviation an important metric
What are the pluses and minuses of statistical modeling
How can we choose strategies using Probability as a signpost
Take your understanding of all the four Greeks to a new level
Master the subtleties of each of the Greeks
Look at option modeling from a mathematical standpoint

SECTION III - OPTIONS ANALYSIS AND SIMULATION

A good trade entry based upon Volume / Chart / Technical analysis sets you up for success from the get-go. But before you put a trade on, you need to perform Options analysis and simulation to understand how your position will behave under a diverse set of market conditions. Once you perform this Options analysis, you can immediately spot your weak points and you're prepared for them. Analysis and Simulation are as important as finding a good trade entry. In this course, we provide a complete roadmap to simulate every possible market condition BEFORE you put the trade on. This kind of analysis may take 30 minutes, but its well worth the time spent.

What you will master

How will your position behave for a + / - 5% move in your stock
Options analysis before you put your trade on
Options simulation to know where your profit zone is
What is the impact of Time decay on your position
What will Implied Volatility changes do to your position
Simulating the effects of two variables on your position
Simulating all three variables
Stress testing your trade

Who this course is for:

People familiar with Options basics like Buying Call Options and Put Options
Anyone with basic knowledge of Options spreads
Anyone intending to optimize their credit spreads and other Options strategies

Course content

3 sections • 13 lectures

Deep Dive into Probability 4 lectures

Introduction Preview 04:34

This is an introduction to the course. In this course, we're taking a deep dive into 3 important concepts in Options trading - Probability, Advanced Greek analysis and Options simulation

Exact Probabilities - Probability of ITM and Probability of Touching Preview 10:10

Two new columns are introduced on the Thinkorswim platform - the Probability of going ITM and the probability of Touching. Both these columns provide insightful information to an Options trader

Standard deviation, Buffer zones and Probability Curves Preview 18:02

A continuation of probability analysis, Standard deviation, the ideal strike prices to set up short strike Options, the analysis of the buffer zone created by the premium collected and a study of probability curves.

Probability Quiz

Deep Dive in the Option Greeks - Subtleties of Delta, Gamma, Vega and Theta 3 lectures

Analyzing the subtleties of Delta, Gamma and Vega for different expiry series Preview 19:11

We studies the 4 Greeks in an earlier course. In this section, we take a deep dive into each of the Greeks. This lecture covers Delta, Gamma and Vega

Analyzing Theta subtleties Preview 06:56

This lecture covers Theta - time decay

Option Greeks Quiz

Options Simulation - The key to understanding your position 6 lectures

Options Simulation introduction - Why do we need simulation Preview 06:24

The importance of Options simulation. Options simulation is the third leg of the Options trading stool - a critical requirement for an Options trader

Options simulation - Simulating Price, Volatility and Time decay individually Preview 18:43

Simulating an Options position for the three variables - Price, Time and Volatility on an individual basis.

Options simulation - Simulating Price, Volatility and Time decay collectively Preview 15:44

Simulating an Options position for the 3 variables when all 3 variables are changing. This is a realistic simulation of actual market conditions

Options simulation - Calculating Theoretical Price Preview 08:13

Introduction of Theoretical Price on Thinkorswim. This can be a useful column in many cases.

CONCLUSION Preview 05:54

The concluding lecture for this course.