Getting an Options Education On-Line

    Getting An Options Education On Line Splash image

    An option is a contract that gives the holder the right, but not the obligation, to buy or sell an underlying financial product for a specific price within a specific time period.

    In the good old days, options primarily covered equities—in other words, the underlying instrument was a stock. But the option universe has expanded immensely. Options now exist for a wide variety of underlying instruments, including options on exchange-traded funds (ETFs), numerous indexes (broad-based, sector and international), currencies and even interest rates.

    Longer-term options have been introduced in the form of Long-term Equity AnticiPation Securities (LEAPS). And one of the latest wrinkles are FLEX options, which allow you to specify characteristics such as the expiration date, strike price, and exercise-style of the contract.

    Options can be used for many purposes, including speculation, added income and hedging. Many options strategies are designed to minimize risk by hedging existing portfolios, and many of the newer products have been developed with those strategies in mind.

    Option strategies can be extremely complex and not appropriate for many investors. But if you want to learn more, where can you go?

    Listed below are the best Web sites to visit to learn more about options and option strategies. These sites also have extensive tools, as well as market data.

    Also listed are the six U.S. options exchanges, which have data and information on the options they offer, as well as some educational information (often through a link to the education sites listed).

    Educational Sites

    Chicago Board Options Exchange (CBOE)

    The Chicago Board Options Exchange (CBOE) Web site offers a wide range of information, tools, and educational materials for beginner and experienced options traders. Trading tools include an equity research center, a volatility optimizer, an options calculator and virtual trading tools that allow you to experiment with placing orders.

    In addition, the CBOE’s Options Institute provides a Learning Center that offers a considerable amount of educational material, including in-depth explanations of options strategies that can be used to manage risk, options tutorials, on-line courses, and webcasts. There are also downloadable educational pamphlets.

    Options Industry Council (OIC)

    The Options Industry Council (OIC) Web site is devoted to educating users about options and has a variety of options information and data.

    Educational resources are provided both for beginners and advanced traders, and include options basics, a glossary of options-related terms, options strategies, and free on-line courses for registered users.

    The Web site also offers extensive tools and data, including an options pricing calculator, a covered call calculator, a position simulator, market data, options quotes, symbol lookup, expiration calendar and E-mail alerts.

    The Options Clearing Corporation (OCC)

    The Options Clearing Corporation (OCC) is the world’s leading options clearing organization. The OCC Web site includes a considerable amount of options market and trading data, as well as a directory of listed products. The Learning Center provides a link to educational material provided by the Options Industry Council.


    American Stock Exchange

    Boston Options Exchange

    Chicago Board Options Exchange

    International Securities Exchange

    NYSE Arca Options Exchange

    Philadelphia Stock Exchange