The CBOT will host a one-day Financial options workshop on September 13th, 2006 with options author and speaker Jay Sorkin. The workshop will cover in detail a number of topics including the basics of options, fundamental properties of options, option pricing, and Financial option strategies.
About the InstructorJay Sorkin has spent nearly thirty years in the futures and options markets. Beginning in 1975, he was a market maker and Board Broker at the Chicago Board Options Exchange, running the book for over a dozen New York Stock Exchange securities.
Moving to the Chicago Board of Trade in1980, Mr. Sorkin was a trader and independent broker in the booming new 30-year Treasury bond futures pit. In 1982, he was instrumental in developing the fledgling 30-year T-bond options on futures markets at the CBOT into the most widely traded futures option contract, traveling throughout the United States and Europe speaking on and teaching this new investment vehicle. Heading a group of twelve brokers in the 30-year T-bond and 10-year T-note pits, he executed millions of contracts and serviced virtually every major brokerage firm.
Over 20-year tenure at the Chicago Board of Trade, Mr. Sorkin served on virtually every major exchange committee, was elected to the Nominating Committee and was elected twice to the CBOT Board of Directors.
Mr. Sorkin has traveled extensively speaking on a wide variety of business related subjects including futures and options, trading derivatives, psychology of traders and markets, architectural structure of markets, complexity theory, and the evolution of business. Audiences included the World Bank, Federal National Mortgage Association, the Central Banks of Denmark and Norway, the Mortgage Bankers Association, exchanges in most developed nations, as well as most major banks and virtually every major Wall Street and City of London firm.
He is the author of the original CBOT Options Trading Course for professional traders, and numerous articles for professional magazines and journals on the futures and options market, market theory and economic trends. Work in progress includes a study of financial markets as complex adaptive systems using Chaos Theory applications. Formerly, Mr. Sorkin was the host of the nationally syndicated Business Talk Radio program, The Futures Exchange.
Agenda for CBOT Financial Options Workshop
September 13th, 2006
9:00am-4:30pm
- Understanding options
a. What are options?
b. Examples of options in everyday life
c. Introduction to the fundamental properties of options
1.time
2. Interest Rates
3.volatility
4.strike price
5. premium
a. intrinsic value
b. time value
6.holder vs. writer
II. Types of options—Unlisted (over the counter) vs. listed
a.Features of unlisted options—everyday examples
1.how the market works
2.counterparty risk and performance anxiety
3.margin
4.reversing the trade
b.Basic properties of listed options
1.standardization of terms
2. underlying entity
3. quantity
4. strike price
5. expiration date
6. class
7. series
c. Counterparty risk—What is clearing?
1.a seller to every buyer and a buyer to every seller
2. the clearing process
d. Margin
1.what is margin?
2.who pays it?
3.why is it paid?
4. Reversing the trade
a.liquidity—what it is and why it’s important
b.open interest
5. The exercise and assignment procedure
a.what is exercise?
b. what is assignment?
c.clearing’s role in the process
d. American options
e.European options
6. Types of options—calls and puts
a.Calls
1.features of calls
2.examples of why and how they’re used
d.Puts
1. features of puts
2.examples of why and how they’re used
7. Additional properties of options
a.“wasting asset”
b. defined loss
c. the concept of parity
d. puts and calls and how they work together—an introduction
e. open interest and liquidity
f. exercise and assignment and what happens after
g. in- vs. out-of-the-money
1. intrinsic value redux
2. time value redux
8. An introduction to the factors that make up and influence the pricing of an option
a.Price of the underlying commodity
b.Strike price in relation to the underlying
c. Time remaining in the life of an option
d. Volatility of underlying commodity—introduction
1. historical volatility
2.implied volatility
e.Current risk-free interest rate
9.Mathematical models that are used to determine the value of an option
a.The history of the Black-Scholes model and its successors
b.Using a computer for pricing
10. It’s All Greek to Me: those strange mathematical symbol
a. Delta
b. Gamma
c. Theta
d. Vega
e. Rho
11. Let’s Begin Using Options
a.Long positions
1. buying the underlying
2.buying a call
3. selling a put
b.Short positions
1.selling the underlying
2.buying a put
3.selling a call
12. Combining options into strategies
a. Bullish strategies
1. vertical spreads
2. time spreads
3. ratio spreads
4. combos
b Bearish strategies
1. vertical spreads
2. time spreads
3. ratio spreads
4. combos
13. Neutral strategies—where options shine
a.straddles
b. strangles (fences)
c. butterfly spreads
d. condor spreads
e. delta neutral combinations
14. How it’s done on the trading floor
a.how being in the pit differs from being off the floor
b.the “edge”—myth or reality
c.strategies that are of the floor, by the floor and for the floor
15.Synthetics—The atomic Theory of Options
a.Synthetic underlying
b.Synthetic calls
c.Synthetic puts
16. Arbitrage Strategies, Put/Call Pricing Parity
a.Conversions
b.Reverse conversions (reversals)
c.Box spreads
17. Specific Strategies for Treasury and Stock Index Futures Options
Registration:
The cost for the workshop is $325 and includes lunch and refreshments.
To register online, click here.
For questions, email educationandtraining@cbot.com or call 312-435-3478. Seating is limited. Registrations are taken on a strict first come, first serve basis.
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