Options Trading (Advanced) Module

Options Trading (Advanced) Module is designed to help candidates in getting a comprehensive and in depth knowledge about the options markets. Options Trading (Advanced) Module provides knowledge in various areas. This helps in:

Firstly, gaining full and broad-based knowledge about the options markets.
Secondly, to get familiarity with various types of options and options strategies.

Target Audience

NCFM Options Trading (Advanced) Module Certification is best suitable for:

Firstly, Students
Secondly, Teachers
Thirdly, Investors
Then, Traders
Next, Employees of brokers / sub-brokers
Lastly, Individuals having an interest in this area

Options Trading (Advanced) Module: Exam Details

NCFM Options Trading (Advanced) Module is an online and self-study based exam. The exam can be given in the English language only. During the Options Trading (Advanced) Module exam, an Open Office Spreadsheet will be provided with an allowance for all types of calculators during the test. But, there will be a 0.25% negative marking, if there are any incorrect answers. All Options Trading (Advanced) Module Exam Questions are in multiple choice format. Moreover you need to secure a score of 60% to pass the exam.

In Options Trading (Advanced) Module:

Firstly, there will be a total of 35 questions of format objective types that have to be completed in 120 minutes. The objective type refers to the one in which you will find four or five alternative answers out of which you have to select the correct one out.
Secondly, to pass the Options Trading (Advanced) Module, it is necessary to score 60%.
Thirdly, the Options Trading (Advanced) Module exam will cost Rs.2006/ inclusive of GST.
Lastly, the NCFM Options Trading (Advanced) Module certification validity is five (5) years.

Exam Registration

For NCFM Options Trading (Advanced) Module, candidates can register online using the ‘Online Registration’ link. After opening the link, click Certifications and then, complete the registration process by providing details.

However, after the registration process is completed, a unique NCFM registration number along with a user id and password is provided. Further, this NCFM registration number is used for exam enrollment. Candidates will also receive a confirmation message that will be sent both on email id and mobile number provided during registration. After logging in you can:

Firstly, completing payment for the NCFM exam.
Secondly, enroll for the test.
Thirdly, update the address details.
Lastly, check the status of the study material. And, view the certificates

Options Trading (Advanced) Module Course Structure

NCFM provides a course outline for the Options Trading (Advanced) Module to help candidates in understanding the topics. This include:

1. Options – A Backgrounder

Derivative Types
Continuous Compounding
Option Valuation
Option Pricing Band
- Upper Bound: Call
  - Option
- Upper Bound: Put
  - Option
- Lower Bound: Call
  - Option
- Lower Bound: Put
  - Option
Put-Call Parity: European Options
- Position A undervalued
- Position B Undervalued
Put-Call Parity: American Options
Dividends

2. Quantitative Concepts – A Backgrounder

Normal Distribution
Share Prices – Lognormal Distribution
Linkages that arise from the Distribution
Volatility (s)

3. Binomial Option Pricing Model

Single Period Binomial
Multiple Period Binomial
European Put Option
Binomial Model for American Options
Role of Volatility in ‘u’ and ‘d’

4. Black-Scholes Option Pricing Model

European Call Option
European Put Option
Dividends
American Options

5. Option Greeks

Delta
- Firstly, European Call on non-dividend paying stock
- Secondly, European Put on non-dividend paying stock
- Thirdly, European Call on asset paying a yield of q
- Lastly, European Put on asset paying a yield of q
Gamma
- Firstly, European Call / Put on non-dividend paying stock
- Secondly, European Call / Put on asset paying a yield of q
Theta
- Firstly, European Call on non-dividend paying stock
- Secondly, European Put on non-dividend paying stock
- Thirdly, European Call on asset paying yield of q.
- Lastly, European Put on asset paying yield of q
Vega
- Firstly, European Call / Put on non-dividend paying stock
- Secondly, European Call / Put on asset paying a yield of q
Rho
- Firstly, European Call on non-dividend paying stock
- Secondly, European Put on non-dividend paying stock

6. Volatility

Historical Volatility (s)
ARCH(m) Model
Exponentially Weighted Moving Average (EWMA)
GARCH Model
Implied Volatility

7. Basic Option & Stock Positions

Pay-off Matrix for Basic Option Positions
- Long Call
- Short Call
- Long Put
- Short Put
Pay-off Matrix for Position in the Share
- Long Stock
- Short Stock
Assumptions
A Few Option Contract Intricacies

8. Option Trading Strategies

The Strategies
- Single Option, Single Stock
  - Protective Put
  - Covered Put
  - Covered Call
  - Protective Call
- Multiple Options of the Same Type
  - Bull Spread
  - Bear Spread
  - Butterfly Spread
  - Calendar Spread
  - Diagonal Spread
- Multiple Options of Different Types
  - Straddle
  - Strangle
  - Collar
  - Range Forward – Long
  - Range Forward – Short
  - Box Spread
  - Condor
  - Option Chain
Contract Fundamentals
Option Trading Intricacies
- Choice of Strike Price
- Choice of Expiry
- Roll Over and Covered Calls

9. Exotic Options

Asian Option
Bermudan Option
Compound Option
Binary Option
Barrier Option
Look back Option
Shout Option
Chooser Option

10. Market Indicators

Put-Call Ratio
Open Interest
Roll-over
Volatility

For More: Check Options Trading (Advanced) Module FAQs

NCFM Procedures

NCFM has exam procedures that help candidates to get started with the exam process. These are designed for getting an understanding of the exam pattern and its essential process. Some of the NCFM exam procedures include:

Making Payment

Exam payment can be made online by logging into the NCFM portal. However, candidates must know that the NCFM test fees validity is changed from 180 days to 90 days. This means that it is necessary to complete enrollment for the NCFM test within 90 days from the date of receipt of payment failing.

Test Taking Procedure

Firstly, for the NCFM exam, there are 200+ test centers that conduct the exams. Candidates can select the test centers according to their preferred location at the time of enrollment.
Secondly, the test center has a rule in which candidates have to reach the exam center 30 minutes before the test time.
Thirdly, verification will be done before the start of the exam. This verification requires an original Photo ID (PAN card, Driver’s License, or any other).
Next, candidates will get a rough sheet(s) during the exam. And, candidates are allowed to bring a scientific calculator and a pen during the test.

Issuing Certificate

Candidates successfully passing the NCFM exam will receive the certification for modules at the test center itself. However, those who failed the exam will only receive a scorecard. The candidates must collect their results before leaving the test center.

Study Guide: Options Trading (Advanced) Module

The following Options Trading (Advanced) Module Study Guide covers all the resources you need to ace the exam. Lets get started

Getting Familiar with Exam Objectives

For Options Trading (Advanced) Module exam, NCFM provides the course outline that has topics divided into various sections and subsections. This course outline helps candidates to understand and learn about the various concepts related to the exam and start their preparation in a sequential way. The topics for the Options Trading (Advanced) Module includes:

Firstly, Options – A Backgrounder
Secondly, Quantitative Concepts
Thirdly, Binomial Option Pricing Model
Fourthly, Black-Scholes Options Pricing Model
Then, Option Greeks
Next, Volatility
After that, Basic Option & Stock Positions
Then, Options Trading Strategies
Exotic Options
Lastly, Market Indicators

Knowledge Hub: NSE

NSE knowledge hub provides customized and community-based learning with an AI-First and Mobile-First ecosystem. This knowledge hub is powered by advanced AI technology that provides a learning platform for financial learning. Moreover, this knowledge hub also supports various academic institutions that prepare advanced future-ready talent for the financial services industry. Using NSE Knowledge Hub candidates can:

Firstly, get the opportunity to be part of a learning community.
Secondly, have unlimited access to the exam content and resources.
Thirdly, get expert-level assistance in this field.
Lastly, learn from anywhere and anytime.

Content Discovering

In this, candidates will get familiarity with the topics in the area of banking, insurance and finance. They can explore content in various domains of finance.

Continuous learning

This learning method provides formal and informal learning with having contents arranged according to the individuals areas of interests and goals.

Deep skills

This helps candidates to gain skill at a marketplace with having well-known providers of courses, assessments, labs and credentials.

Options Trading (Advanced) Module Study Material

NSE provides study material for the module exams in the form of a workbook. This workbook is issued after making payment for the module. For the Options Trading (Advanced) Module, you can download the workbook by logging into your account from the E-Library option. However, candidates can even buy these Workbooks for NCFM modules by just sending a request letter with a demand draft of Rs. 500/- per module per workbook. The request letter should have:

Firstly, valid name of the candidates
Secondly, the name of the module
Thirdly, complete postal address
Next, contact and demand draft details.
Lastly, the demand draft contains the name of the candidate and module name on the backside.

Start Taking Practice Tests

Options Trading (Advanced) Module Mock Tests can be important during the preparation of the exam. This is because the NCFM modules are designed for self-learning and using practice tests will help in better understanding of the topics. Moreover, by taking the Options Trading (Advanced) Module Sample Questions, you will improve your answering skills and it will also help you to work on your weak areas. Further, this can result in having a good revision by enhancing your knowledge about the concepts of this module. Boost your confidence now with Free Options Trading (Advanced) Module Practice Tests!

Options Trading (Advanced) Module practice tests