In this class, we study risk management and derivatives using online resources. This topic is relevant to investors as well as to companies, especially in volatile times as we are currently experiencing. We use the Options Industry Councils online resources, Chicago Board of Trade, CBOE online trading education, and actual information on derivative markets. We will focus on options and study different strategies and apply them, where possible to trading.

For data, you can use Option Industry Council, CBOE Education, Yahoo Finance, FRED.

Choose a stock (or ETF). At first, check the current stock price (per share). Get information on option prices of this stock from Yahoo Finance (click on Options).

1. Collect option data on your chosen company.

A. Collect and present (screenshot of the website) information on a call option (strike price, option price, and expiration date). Explain the information listed for the quoted option.

B. Report information on a put option (strike price, option price, and expiration date).

C. On the website, it says In The Money. What does it mean?

2. 2. What kind of options trading would you consider? Would you sell or purchase a put or a call? Why? How would it work?

3. 3. Describe the difference between a hedge and a speculative position. Think about the expression on both sides of the trade. Keeping the notions of hedging and speculating in your mind, what do you think this expression means?