Options trading certification for your career
For people who are already familiar with financial instruments such as stocks and bonds, options trading might be the perfect way to enhance their experience in this field and strengthen their strategies. Finance and accounting is a very challenging environment, where only the truly committed and skilled professionals manage to survive. The largest part of the investors’ portfolios includes stocks, bonds and mutual funds, but you should know that the list of financial instruments does not end here.
Options are derivative financial instruments that provide a wide range of opportunities even to the most sophisticated traders. They are called derivative because they are contracts between two parties that clearly state the conditions under which payments will be made between the involved parties. Basically, an option involves a future transaction on an asset at a reference price called strike in the financial language. The person buying the option is granted the right, but not the obligation, to engage in that future transaction. On the other hand, the seller of the option will have the obligation to fulfill the transaction if the buyer decides to engage. The price of an option is the difference between the strike and the value of the asset in discussion, plus a premium depending on the amount of time left until the option will expire. The assets used in options trading are usually stocks, bonds, currencies or futures contracts. In theory, options can be created for any type of assets.
If you consider integrating these interesting financial instruments in your strategy you should know there are two main types of options: call and put. A call is an option giving the buyer the right to buy something at a fixed price, while the put gives the right to sell at a specific price. This fixed price is the strike that we already mentioned. Also you should know that usually options have an expiration date and if you as a buyer don’t exercise your right before this date, the option is declared void. If the option is exercised the writer of the option must receive or deliver the underlying asset or the corresponding cash equivalent, whereas if the option is not exercised he will only collect the premium. These are the basic concepts every trader should know about options if he wants to consider these instruments for a strategy.
Options are widely appreciated for the flexibility and the power of leverage they provide to traders. By choosing different strikes and expiration dates you benefit from a variable amount of leverage. What is more, this variability should encourage traders to use options, because if it is used in a correct way, traders will take benefit regardless of their risk tolerance. If you choose options with the correct reference price and expiration you can be either aggressive or conservative, according to your own strategy. Furthermore, options trading grants you not only leverage, but also protection. When a stock moves in the other way of your prediction, you could suffer a smaller loss than a stock trader since your maximum loss is limited to the price paid for the option. This price could be just 10% of the price of the stock, or even less. As a consequence, with a relatively small amount of money an options trader could control a very large underlying asset position.
All these benefits, however, have their cost. Options are very complex financial instruments and can be extremely risky, meaning you might win great amounts of money, but you may lose them too. This is why you need to know very well what you are doing. The best alternative would be to include in your strategy both stocks and options, because you will have a better chance of making more money. If you are committed to a job as a broker you should try to be always up-to-date with the latest news and informations. Such a job requires also maintaining count records, completing transactions, communicating with clients, managing their portfolios and making a marketplace analysis. Furthermore, you could use options as part of your general strategy to financial independence.
Once you are convinced of the benefits brought by knowledge on options you should try to demonstrate your abilities both to your employers and your potential clients. One of the best ways to do this is to take an online options trading certification, because online certifications are highly sought in this field. If you prove you have passed an options trading exam you will testify your solid knowledge and your desire to stay current, so you should choose a provider and register for the options trading test. Brainmeasures.com is the company you should put your trust in for acquiring the certification that will boost your resume and show the whole world that you have what it takes to be a great trader.
Sample Hard Copy Certificate
Options Trading Certification
Other Related Tests and Certifications
- Limiting Downside
- Managing Risk
- Options Terminology
- Portfolio Management
- Technical Analysis
- Trading Strategies
multiple choice questions.
Each question has between 2 and 5 options out of which 1 or more may be correct.
Pricing and Payment Options
US payable through any of the following:
Secure online credit/debit card transaction
The fee includes the cost of the hard copy certificate of accomplishment and world-wide
All the information regarding this test has been clearly stated inside the login
account and you must read it properly before starting your test. Good luck !
You can take any no of retakes, they are free!!
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