Options Markets

I.     Course Prefix/Number: FIS 237

       Course Name: Options Markets

       Credits: 3 (3 lecture; 0 lab)

II.    Prerequisite

FIS 101

III.   Course (Catalog) Description

Course explores actual market conditions and strategies.  Focus is on the relationship of options to their respective underlying vehicles and on the relationship of several individual options to others of the same classification.  Recommended for students with basic knowledge of put and call options.

IV.   Learning Objectives

By the end of the course, students who complete all work satisfactorily will have a working understanding of options, put options, and spreads.

V.    Academic Integrity and Student Conduct

Students and employees at Oakton Community College are required to demonstrate academic integrity and follow Oakton's Code of Academic Conduct. This code prohibits:

• cheating,
• plagiarism (turning in work not written by you, or lacking proper citation),
• falsification and fabrication (lying or distorting the truth),
• helping others to cheat,
• unauthorized changes on official documents,
• pretending to be someone else or having someone else pretend to be you,
• making or accepting bribes, special favors, or threats, and
• any other behavior that violates academic integrity.

There are serious consequences to violations of the academic integrity policy. Oakton's policies and procedures provide students a fair hearing if a complaint is made against you. If you are found to have violated the policy, the minimum penalty is failure on the assignment and, a disciplinary record will be established and kept on file in the office of the Vice President for Student Affairs for a period of 3 years.

Please review the Code of Academic Conduct and the Code of Student Conduct, both located online at

VI.   Sequence of Topics

  1. What are options?
    1. Concept
    2. Purpose
    3. History
    4. Terms and Definitions
  2. What are the properties of options?
    1. Pricing of options
    2. Potential gains, possible risks
    3. Leverage
  3. Uses of options
    1. Reduce risk
    2. Lock in profits
    3. Hedges and arbitrage
  4. Call Options
    1. Outright purchase
    2. Naked short sale
    3. Covered write
  5. The "Delta" factor in options
    1. Definitions and concepts
    2. Purpose
    3. Uses
  6. Call Spreads
    1. Bull Spreads
    2. Bear Spreads
    3. Ratio Spreads
    4. Reverse Ratio Spread (Backspread)
    5. Butterfly Spread
    6. Calendar Spread
    7. Diagonal Spread
  7. Put Options
    1. Concepts of puts
    2. Outright purchase
    3. Naked Put Sale
  8. Put Spreads
    1. Bull Spread
    2. Bear Spread
    3. Ratio Spread
    4. Reverse ratio spread (Backspread)
    5. Butterfly Spread
    6. Calendar Spread
    7. Diagonal Spread
  9. Strategies combining puts and calls
    1. Straddle
    2. Strangle
    3. Guts
    4. Synthetic or equivalent positions
    5. Conversion and reversal
    6. Box
  10. Market Details

VII.  Methods of Instruction

Lecture/Question and Answer/In-class Participation
Course may be taught as face-to-face, hybrid or online course.

VIII. Course Practices Required

Assigned Readings

IX.   Instructional Materials

Note: Current textbook information for each course and section is available on Oakton's Schedule of Classes.

Option as a Strategic Investment/Investor Daily Periodical

X.    Methods of Evaluating Student Progress

Mid-Term/Final/Class Participation

XI.   Other Course Information

  1. Attendance
  2. Class policy on make-up exams, incomplete grade late assignments, etc.
  3. Support services, e.g. Learning Lab, Instructional Media Services.

If you have a documented learning, psychological, or physical disability you may be entitled to reasonable academic accommodations or services. To request accommodations or services, contact the Access and Disability Resource Center at the Des Plaines or Skokie campus. All students are expected to fulfill essential course requirements. The College will not waive any essential skill or requirement of a course or degree program.

Oakton Community College is committed to maintaining a campus environment emphasizing the dignity and worth of all members of the community, and complies with all federal and state Title IX requirements.

Resources and support for
  • pregnancy-related and parenting accommodations; and
  • victims of sexual misconduct
can be found at www.oakton.edu/title9/.

Resources and support for LGBTQ+ students can be found at www.oakton.edu/lgbtq.

Electronic video and/or audio recording is not permitted during class unless the student obtains written permission from the instructor. In cases where recordings are allowed, such content is restricted to personal use only. Any distribution of such recordings is strictly prohibited. Personal use is defined as use by an individual student for the purpose of studying or completing course assignments.

For students who have been approved for audio and/or video recording of lectures and other classroom activities as a reasonable accommodation by Oakton’s Access Disabilities Resource Center (ADRC), applicable federal law requires instructors to permit those recordings. Such recordings are also limited to personal use. Any distribution of such recordings is strictly prohibited.

Violation of this policy will result in disciplinary action through the Code of Student Conduct.