Futures and Options Training
A financial future, or futures contract, is an agreement to buy and sell an investment asset at a specified price in the future. An option gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Training teaches attendees the distinction between options and futures, and how investors use both assets to manage financial risks.
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Target Audience
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The training attracts a varied attendance, especially individuals who have no connection to financial markets, but are interested in investment strategies. In the corporate setting, many professionals find futures and options instruction beneficial. These personnel include traders, portfolio managers, investment advisers and treasury analysts. Financial managers and accounting managers also may find training professionally advantageous, especially those working in the financial services sector. For advanced courses, training providers may require that participants possess, at a minimum, a bachelor's degree in a business field.
Futures Training
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Futures training teaches attendees how to distinguish options from futures. The major difference between an option and a future lies in the obligations each product puts on buyers and sellers. An option gives the buyer the right, but not the obligation, to buy or sell an asset at a fixed price. A futures contract gives the buyer the obligation to purchase a specific asset, and the seller the obligation to sell and deliver that asset. Participants also learn about the futures-market participants, the process of price discovery, the arithmetic of futures and basic trading strategies. Equally important, trainees familiarize themselves with daily price limits and the regulation of futures trading.
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Options Training
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Options instruction focuses on risks implicit in calls (rights to buy) and puts (rights to sell) and how investors calculate option profits. Trainers share with attendees their knowledge of option premiums and discounts, advantages and drawbacks of options, and laws and regulations concerning options trading. Other topics discussed during an options training class include leverage options available to investors and margin requirements.
Expert Insight
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Futures and options topics often involve quantitative concepts that training providers may not be familiar with. In such cases, trainers can hire specialists to explain difficult subjects. For example, an investment bank's training supervisor may bring in a university finance professor to explain quantitative, mathematical calculations necessary to assess the probability of short-term losses in options and futures transactions.
Benefits
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Training helps attendees improve their productivity and financial acumen, two factors that usually translate into higher trading profits. Participants who possess professional certifications can take courses to comply with continuing education requirements that state regulators often set. Companies also gain from training, because personnel are more likely to conform to regulatory guidelines when completing duties.
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