Advanced Options & Portfolio Management

Curriculum

16 live sessions

Each session includes a learning objective, practical work, and a competency demonstration. Session titles below are the full syllabus.

1. 01Rolling Techniques: When and How

   What you learn. Understand a roll as the closing of an existing position and the opening of a new position rather than as a single adjustment that erases the original trade. Learn the difference between rolling for time, strike, risk, or thesis changes. Understand why a roll should be evaluated as a new trade based on current market conditions rather than justified by the original entry price.

   Practical work. Analyze open options positions that have reached different management points. Compare closing the position, rolling out in time, rolling up or down, and replacing the structure. Calculate the resulting debit or credit and changes in exposure.

   Competency. Given an open option position and a changing market scenario, determine whether a roll is warranted, identify what is being changed, and explain the new trade's risk, reward, and thesis independently of the original position.

2. 02LEAPS and Long-Horizon Structures

   What you learn. Understand how LEAPS can be used to express long-duration market views and how their characteristics differ from stock and shorter-dated options. Learn the trade-offs involving capital, leverage, time decay, volatility exposure, dividends, and expiration. Understand when a long-dated option may be appropriate and when owning the underlying may provide a different risk profile.

   Practical work. Compare stock, shorter-dated calls, and LEAPS under the same long-term thesis. Examine capital requirements, break-even, delta, theta, vega, and outcomes under different underlying and volatility scenarios.

   Competency. Given a long-term market thesis, compare stock and option-based alternatives and defend the selected structure based on horizon, capital, risk, volatility, and management requirements.

3. 03Ratio Spreads and Backspreads

   What you learn. Understand ratio spreads and backspreads as asymmetric multi-leg structures whose risk depends heavily on strike relationships, expiration, volatility, and the ratio of long to short contracts. Learn how these structures can create limited, asymmetric, or potentially significant risk zones. Understand margin requirements, tail exposure, and the circumstances in which the structure should not be traded.

   Practical work. Construct representative ratio spreads and backspreads and map their expiration and scenario P&L across a range of underlying prices and volatility levels. Identify the maximum-risk region and examine how changes in volatility and time affect the position.

   Competency. Given a ratio spread or backspread, identify every leg, map the risk profile, locate the principal loss region, explain the margin or assignment considerations, and state the market conditions under which the structure should not be used.

4. 04Iron Condors and Butterfly Spreads

   What you learn. Understand iron condors and butterfly spreads as defined-risk range and payoff-shaping structures. Learn how wing width, strike placement, expiration, and premium affect maximum profit, maximum loss, break-even levels, and probability distribution. Understand the difference between accepting a range thesis and expressing a more concentrated price-location thesis.

   Practical work. Construct iron condors and butterfly spreads with different wing widths and strike placements. Calculate maximum profit, maximum loss, break-evens, and expiration outcomes and compare the resulting risk profiles.

   Competency. Given a range or price-location thesis, select and construct an iron condor or butterfly and explain the strike selection, risk/reward profile, break-evens, maximum loss, and principal management concerns.

5. 05Options Volatility Strategies Overview

   What you learn. Integrate the volatility concepts from Course 3 into a framework for classifying options strategies by their volatility exposure. Distinguish long-volatility and short-volatility structures and understand how direction, time, and volatility can interact within a strategy. Learn why a strategy cannot be classified correctly from its name alone without examining its actual exposures.

   Practical work. Classify previously studied strategies according to their directional, volatility, and time exposures. Compare strategies with similar directional views but different volatility profiles.

   Competency. Given an unfamiliar or previously studied options structure, identify its principal directional, volatility, and time exposures and explain how those exposures affect the conditions under which the strategy can succeed or fail.

6. 06Straddles and Strangles

   What you learn. Understand straddles and strangles as structures designed to express a view about the magnitude of movement rather than direction alone. Learn the differences between long and short versions, including premium, break-even, volatility exposure, time decay, and gap risk. Understand why a large underlying move does not automatically guarantee profitability when the premium paid or volatility repricing is unfavorable.

   Practical work. Construct long and short straddles and strangles and calculate their break-evens, maximum loss or risk characteristics, and expiration outcomes. Compare the structures at different strikes and volatility levels.

   Competency. Given a volatility or movement thesis, select between a straddle and strangle and explain the strike selection, premium, break-evens, volatility exposure, time decay, and principal failure modes.

7. 07Earnings and Event Volatility Management

   What you learn. Understand how scheduled events can affect implied volatility, expected moves, option pricing, and post-event behavior. Learn the concepts of implied move, volatility expansion, volatility crush, and event gap risk. Understand that an event strategy must account for both the size of the underlying move and the volatility already embedded in the option price.

   Practical work. Analyze historical earnings or event option chains before and after an event. Compare the implied move with the subsequent realized move and examine changes in IV, option premiums, and P&L.

   Competency. Given an event-driven option position, explain the embedded market expectation, identify the principal event and volatility risks, and evaluate whether the position's payoff depends on direction, magnitude, volatility repricing, or a combination of these factors.

8. 08Options for Portfolio Hedging

   What you learn. Understand how options can be used as portfolio-level hedges rather than isolated trade ideas. Learn to distinguish position-level protection from portfolio-level risk reduction and understand how hedge instrument, strike, expiration, hedge ratio, and cost affect the result. Understand that a hedge can reduce one risk while creating another.

   Practical work. Apply option hedges to a hypothetical stock or ETF portfolio. Compare protective puts, collars, index options, and other appropriate structures and measure their effect on portfolio exposure under different market declines.

   Competency. Given a portfolio and a defined risk objective, construct a hedge and explain what risk it addresses, what risk remains, the hedge cost, the required sizing, and how the hedge is expected to behave in different market scenarios.

9. 09Tail Risk Hedging with Options

   What you learn. Understand the purpose and limitations of convex tail-risk hedges. Learn why protection designed for extreme declines can be expensive to maintain and why a hedge can fail to offset losses if its underlying, maturity, strike, or sizing does not match the portfolio's actual risk. Understand the trade-off between insurance cost and crisis protection.

   Practical work. Construct several tail-risk hedge alternatives for the same portfolio. Stress-test them under moderate declines, severe declines, volatility spikes, and different timing scenarios.

   Competency. Given a portfolio and a tail-risk objective, design a hedge, explain its convexity and cost, identify the scenarios where it may fail to provide the expected protection, and distinguish ordinary drawdown protection from true tail-risk protection.

10. 10Managing Multi-Leg Positions

    What you learn. Understand how to manage a multi-leg position as an integrated risk profile rather than as a collection of independent options. Learn how to monitor aggregate delta, gamma, theta, vega, exposure by expiration, and concentration. Understand partial exits, leg management, rolls, and the risks created when one leg is closed without considering the resulting position.

    Practical work. Manage simulated multi-leg positions through changing market conditions. Calculate aggregate exposures before and after partial exits, rolls, and adjustments and identify how the risk profile changes.

    Competency. Given an open multi-leg position, explain its aggregate exposure, identify the dominant risks, evaluate an adjustment or partial exit, and demonstrate how the proposed action changes the overall position rather than merely one leg.

11. 11Volatility Risk Premium

    What you learn. Understand the volatility risk premium as the relationship between implied and subsequently realized volatility and why option sellers may receive compensation for bearing volatility and tail risk. Learn that selling volatility is a market thesis, not simply an income strategy. Understand the importance of realized volatility, transaction costs, skew, term structure, position sizing, and tail losses when evaluating volatility-selling strategies.

    Practical work. Compare implied volatility with subsequent realized volatility across historical periods. Analyze hypothetical short-volatility trades and measure the impact of volatility expansion, large underlying moves, transaction costs, and position sizing.

    Competency. Given an options-selling opportunity, evaluate the volatility thesis by comparing implied and expected/realized volatility, identify the risks being assumed, and explain why a positive volatility spread does not guarantee a profitable trade.

12. 12Journal, Attribution, and Review Discipline

    What you learn. Understand the difference between process quality and trade outcome. Learn how to maintain a useful options journal containing thesis, structure, entry conditions, risk assumptions, management decisions, exit, and result. Learn basic attribution so that P&L can be examined by direction, volatility, time decay, execution, and management rather than simply classified as a win or loss. Understand common decision biases that can distort post-trade evaluation.

    Practical work. Review completed paper or live trades and reconstruct the original thesis, planned risk, actual management, and final outcome. Attribute the result to the major drivers and identify where the process differed from the original plan.

    Competency. Given a completed trade and its journal record, separate process quality from outcome, identify the principal P&L drivers, document what was known at the time of each decision, and produce a concise post-trade review with actionable process improvements.

13. 13Strategy Correlation and Diversification

    What you learn. Understand why holding multiple options strategies does not necessarily create a diversified portfolio. Learn how apparently different strategies can share the same directional, volatility, liquidity, or tail-risk exposure. Understand concentration by underlying, factor, expiration, volatility regime, and loss scenario.

    Practical work. Analyze a portfolio containing multiple options strategies and map their common exposures. Stress-test the portfolio under broad market moves, volatility shocks, and underlying-specific events.

    Competency. Given a multi-strategy options portfolio, identify hidden concentrations and correlated risks, explain why apparently different trades may lose money together, and propose changes that would reduce a specific concentration.

14. 14Market Regime and Strategy Switching

    What you learn. Understand how changing market regimes can alter the behavior and suitability of options strategies. Learn to evaluate changes in volatility, trend, correlation, liquidity, and market stress when reviewing an existing strategy mix. Understand that regime awareness should modify the decision process rather than become an automatic strategy-switching signal.

    Practical work. Review several historical or simulated market regimes and compare the performance and risk characteristics of different options strategies under each environment. Determine which exposures become more vulnerable as the regime changes.

    Competency. Given a change in market conditions, identify which portfolio exposures have become more or less appropriate, explain why, and propose a strategy adjustment supported by the changed risk environment rather than by a simple regime label.

15. 15Index, ETF, Futures, and Currency Options

    What you learn. Understand the key differences among options on individual equities, indexes, ETFs, futures, and currencies. Learn how underlying instrument, settlement method, contract specifications, exercise style, multiplier, trading conventions, and exposure affect strategy selection. Understand why a strategy that is appropriate for one underlying type may behave differently when transferred to another.

    Practical work. Compare representative option contracts across equity, index, ETF, futures, and currency markets. Identify their contract specifications, settlement conventions, exercise characteristics, and major practical differences.

    Competency. Given a portfolio objective or market thesis, select an appropriate underlying instrument and option type, explain the relevant contract and settlement characteristics, and identify the principal differences from using an equity option.

16. 16Portfolio Capstone Exam

    What you learn. Integrate the complete Core 4 framework into portfolio-level options management. Learn to connect portfolio thesis, volatility view, strategy selection, hedging, diversification, position management, journal evidence, and failure rules into one coherent decision process.

    Practical work. Complete a portfolio case involving multiple option positions, changing market conditions, volatility changes, and a defined portfolio objective. Review the existing positions, identify the dominant risks, propose adjustments or hedges, and document the reasoning and expected failure modes.

    Competency. Given an unfamiliar portfolio and changing market environment, defend a complete portfolio-management plan. Explain the portfolio thesis, volatility view, strategy exposures, hedges, concentration risks, management decisions, maximum or principal risks, journal evidence, and the conditions that would invalidate the plan.