1. Academy 5 Basic Option Trading Get connected to B&R Beurs @ 1

2.  How big is the worldwide derivative market?  A. $80 billion  B. $800 billion  C. $8 trillion  D. $80 trillion  NL GDP: €600 billion (600,000,000,000  US GDP: $14 trillion (14,000,000,000,000) 2

3.  Banks and institutional investors  Size: $ 600 trillion (600,000,000,000,000,000)  (600.000 miljard in dutch) 3

4. “Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital” 4

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6.  Right to buy or sell  Specific expiration date  Specific price 6

7.  Call: Right to buy  Put: Right to sell  Traded in contracts Regulair sized 100 7

8.  ING Groep Call dec-2012 6,40  Underlying value  Expiration date  Strike price 8

9.  StocksIndicesCommodities 9

10.  The end date of your option.  European style options  American style options  In Europe we trade American style options 10

11.  Selling an option you don’t own  You do not have a right to buy or sell, but the obligation  Need margin  If you own stocks you do not need a margin for a call option (Covered short selling) 11

12. 1) You short a call option. Stock goes up. Profit or loss? 2)You buy a put option. Stock goes down Profit or loss? 3)You short a put. Stock goes up Profit or loss? 12

13.  Options:  Right to buy or sell  Stocks, indices, currencies  Future:  Obligation to buy or sell  Stocks, commodities  Always physical settlement 13

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16. 16 Underlying value Time valueOther  Current stock price-strike price. (Intrinsical value)  The longer away the higer the price  Volatility, risk free rate, dividend yield.

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18.  Premium  Time Value  Price of option – intrinsical value 18

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20.  Other costs:  Transaction costs (2,95 or 1,95 per contract)  Bid-Ask spread 20

21.  Speculation ◦ Leverage ◦ Limited risk ◦ Limited cash required ◦ Unique payoffs  Hedging  Stock options ◦ Incentive employees 21

22. Anyone in the crowd traded with options? If yes, Tell us your wonderfull profit! Or loss.. 22

23. So, nice to know.. but how does it work?? 23

24.  LongShort  Strike price 24

25.  LongShort 25

26.  Buy 100 stocks  Write 100 call options  (1 contract) 26

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28.  Stockprice 30  Buy 1 call 32  Write 1 call 34 28

29.  Buy 1 call 26  Buy 1 put 26 29

30.  Strangle  Long strangle  Butterfly spread  Iron Butterfly spread  Iron Condor  Protective collar  Etc. 30

31. About 90% of private traders lose money on options. 31

32.  Option  Call  Put  Contract  Underlying values 32

33.  The model  Strategies  Greeks  And more! 33

34.  22 november  www.Traderstrophy.com www.Traderstrophy.com 34

35.  21 november  €5 for dinner, free poker 35

36. We hope you have enjoyed 36

37.  Current price philips € 15  We sell 1 put philips Dec-2012 14,00  @ €1,50  Philips drops to € 10  Do we make a profit? 37

38.  Current price Aegon € 3,50  We Buy 1 call december-2012 €3,00  @ €0,90  We Buy 1 put december-2012 €4,00  @ €0,90  Aegon increases to €5,- in december  Do we make a profit? 38

39.  Current price Arcelor Mittal: €15,50  We buy 1 call Arcelor Mittal Jun 15  @2,10  We sell 1 call Arcelor Mittal Jun 17  @1,10  What is your investment?  Arcelor increases to €19, what is your profit? 39