A Complete Course on Equity Derivatives

You may find it difficult to understand the workings of the derivatives market, analyze the derivatives data and take winning calls.

As a trader, you must be aware of the higher returns provided by the derivatives market due to intrinsic fund leveraging.

But to be able to optimize returns through derivatives while carefully managing risks, you must be thorough with the meaning and application of derivatives.

To make you proficient with this, we have created a module on Equity Derivatives that will guide you in understanding the employment of options strategies, which are used worldwide to not only minimize portfolio risk but also to maximize the returns on the investments. 

You will also be able to analyse various derivative parameters to get an indication of market expectations after going through this module.

This module is all about learning about different kinds of options and smart trading strategies. For those in the market, it offers up a world of opportunities, but the secret is to make rational decisions supported by research. 

Additionally, you will learn how to examine several aspects in this module, like Rollover Statistics, Price-Open Interest Relationships, and Open Interest. Understanding these concepts is not the only objective; using them effectively in trading, risk management (hedging), and even identifying arbitrage possibilities is the aim. It's a hands-on approach to making informed choices in the volatile world of financial assets.

Please find the overview of the topics covered in this equity derivatives course:

Topic 1: Introduction to Derivatives

• You will learn about the derivatives, including its types, such as Forwards, Futures, Options and Swaps.

Topic 2: Introduction to Forwards and Futures

• You will understand forward and future contracts.
• Explore various participants, i.e., Hedgers, Speculators and Arbitrageurs.

Topic 3: Futures Markets

• You will get a comprehensive understanding of different terminologies associated with it using the NSE website, including instrument type, symbol, underlying value, market lot, contract value, basis, etc.
• Understand how it acts as a trading opportunity and get insights into the payoff structures for long and short positions.
• Gain in-depth knowledge about financial leverage and the difference between equity and futures.
• Get an insight into two different models for pricing futures, i.e., the cash and carry model and the expectancy model.
• Learn about Nifty futures and the difference between stock and nifty futures.

Topic 4: Introduction of Options

• You will get an overview of options and types, such as call and put options. 
• Understand the concept of American and European options. 
• Get in-depth insights into the payoff structure for both long and short positions.

Topic 5: Options Pricing

• You will understand the moneyness of option and know how to determine the intrinsic value and time value with an example.
• Gain a comprehensive understanding of the broad classification of moneyness, i.e., ITM (In the Money), ATM (At the Money) and OTM (Out of the Money).
• Learn the various factors that affect the pricing: spot price, strike price, expiry date, interest rates, dividend and volatility.

Topic 6: Option Greeks

• You will know about the Option Greeks such as Delta, Gamma, Theta, Vega and Rho and its implications.

Topic 7: Open Interest and Rollover

• You will understand the concept of open interest and rollover and why they are essential in derivative trading. 
• Learn how to track F&O contracts using the StockEdge App.

Topic 8: Trading, Clearing and Settlement

• You will gain in-depth insights into the concept of margin settlement.
• Understand how the margin system works in the F&O with an example.

Topic 9: Options Strategies

• You will understand various synthetic strategies, such as long and short future, call-put parity, synthetic long put and short call, covered call and protective put.
• Get comprehensive knowledge of bull call spread, bull put spread, bear call spread and bear put spread.
• Gain an in-depth understanding of ratio Spread Strategies, including call ratio back spread, put ratio back spread, call ratio front spread and put ratio front spread.
• Learn how to devise a long butterfly using calls and puts and a short butterfly strategy.
• Understand the condor strategy.
• Get insights into volatile and non-volatile strategies, including long straddle, short straddle, strip and strap, and stroke and gut strategy.

Topic 10: Understanding the Important Derivatives Research Tools

• You'll understand the significance of derivatives, technical, and fundamental analysis in the context of the stock market. 
• Know how fundamental analysis helps in an analysis of the company's macro and micro factors.
• Learn how technical analysis helps you understand the price behaviour of a stock.
• Learn how derivatives analysis helps to manage risk in the face of uncertainty.

Topic 11: Important Parameters of Analyzing Futures and Options

• You will get an understanding of various parameters used to analyse futures and options contracts.
• Learn about Bhav copy, volume, delivery, and open interest in brief.
• Analyse how open interest, price, and volume are related to each other.
• Gain an understanding of concepts that helps in F&O analysis, such as premium/discount, rollover statistics, FII statistics, max pain or range theory, and put-call ratio.

Topic 12: Decoding Bhav Copy

• You will understand the significance of studying and analysing the historical data of all securities, including derivatives, stocks, bonds, and other securities, listed on the NSE. 
• Learn how to obtain the Bhav Copy report and extract the relevant data for further analysis.
• Decode the Bhav Copy, which involves converting the file's raw information into insightful knowledge.
• Using the pivot table in Excel, you will learn how to extract vital information from the Bhav Copy in order to make informed trading decisions.

Topic 13: Relationship between Price, Volume and Open Interest

• You will comprehend the liquidity and activity of futures and options contracts by analysing the open interest and volume of derivative instruments.
• Know how price, volume, and open interest relate to one another in order to understand market trends. 
• Learn about the various contract types, such as long unwinding, long build-up, short covering, and short build-up. 
• Discover how to use the StockEdge App to analyse these aspects.

Topic 14: Detailed Working Excel Sheet

• You'll learn how to analyse and filter out the relevant data from the NSE website. 
• You will learn to use the pivot table in the comprehensive working Excel sheet to extract the essential data for additional research and analysis.

Topic 15: Conclusion from the Working Sheet 

• You will gain knowledge on how to understand and analyse relevant data, including price, volume, and open interest. 

Topic 16: Premium/Discount and Rollover Analysis

• You'll understand what premium and discount mean.
• Learn to evaluate the basis and rollover of options and futures.

Topic 17: FII/FPI Statistics 

• You will learn how to extract and analyze the FIIs (Foreign Institutional Investors) and DIIs (Domestic Institutional Investors) activity using StockEdge App and interpret it.

Topic 18: Options Data Analytics 

• You will understand how to use and evaluate options data for trading.
• Explore the concept of Max Pain or Range Theory and Put Call Ratio.