For decades, the world of option trading has enticed both aggressive and conservative investors with its quick profits and risk management potential for portfolios of any size. It has also functioned as a form of gambling for the uneducated, who have lost untold millions of dollars by purchasing put and call options that expired worthless. However, in many cases, the risks that are posed by options have been far more publicized than the benefits. The Options Industry Council (OIC) was therefore created in an attempt to educate the investing public about both the risks and benefits of option trading. (To learn more, see How To Use Options To Make Earnings Predictions.)
TUTORIAL: Options Basics
The OIC was formed in 1992 through the joint effort of several securities organizations, including the Chicago Board of Options Exchange (CBOE), The Options Clearing Corporation (OCC), the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), the Philadelphia Stock Exchange (PHLX) and the Pacific Exchange (PCX). The OIC was founded to provide a platform of learning for individual investors, and has since grown to become one of the premier sources of options education for the investing public in America and elsewhere. The Boston Options Exchange (BOX) joined the OIC in 2004, and the BATS Option and C2 Options Exchange have also become sponsors. The OIC has since reached out to exchanges in other countries, such as Poland and Thailand, in an effort to educate their investors on the mechanics of options. (To learn more, see Who Owns The Stock Exchanges?)
Scope and Purpose
Although the OIC was created through the joint efforts of several official trading entities, it is purely an educational organization, and has no legal or regulatory authority of any kind. The OIC was originally formed in order to keep pace with the growth in the equity options market, but this market's rate of growth increased, substantially, as a result of the OIC's efforts over the years. The OIC attempts to educate investors of all levels by using several different mediums of communication, including:
The OIC sponsors a variety of educational seminars that are taught by experienced professional options traders. Approximately 90 of these seminars are given around the country each year for beginner, intermediate and advanced option traders. Those for beginners focus on how to get started with options, while intermediate-level investors learn how to manage options portfolios and advanced traders are given a breakdown on the significance of option volatility.
There are several websites hosted by the OIC that are dedicated to educating investors about options. These include:
This site is designed to educate institutional investors on the benefits of options. It offers many different types of education for learners, including news, educational articles, interactive tools, online classes, real-time quotes and other news that are supplied by http://www.ivolatility.com/.
This site is designed for individual retail investors and provides a plethora of tools and educational alternatives for options traders of all levels. It offers online classes, options pricing calculators, real-time trading data (including quotes and news), free online registration for options seminars, quizzes designed to test the knowledge of potential investors, access to OIC resources and programs, trading strategies, expiration calendars and press releases, as well as a complete dictionary of options-related terms. It also contains a range of pod and webcasts that cover all aspects of options trading, such as covered call writing, LEAPS, volatility and pricing. These hour-long programs are typically taught by the live-seminar instructors, and are appropriate for options traders of any level of expertise. (To learn more, see Using LEAPS In A Covered Call Write.)
This is the site for the OIC itself, and contains an overview of the options industry as a whole and outlines the nature and purpose of the OIC for the public. Many educational resources are available here, as well, that cover topics such as ETFs and the taxation of options. This site also provides a virtual trading program that permits investors to trade hypothetical option contracts in a simulated environment. (To learn more, see How To Reduce Taxes On ETF Gains.)
Brochures, Educational Materials and Newsletters
The OIC publishes a great deal of printed material that echoes what is available on its websites. Many of these brochures and flyers can be downloaded from the website, but they are also distributed at seminars and can be mailed to investors upon request. These brochures cover various topics relating to the risks, rewards and mechanics of options. Interactive DVDs and other computer materials that cover specific topics and strategies are also available.
The OIC also houses a help desk that investors can contact with questions, problems or feedback. All materials, seminars and other avenues of education are created by qualified options industry personnel who are backed by a staff of legal and compliance experts who insure that all materials adequately describe the risks of options, as well as the potential benefits.
The OIC is perhaps the most well-known source of information for option traders in America. It offers a wealth of educational resources for both novice and veteran options traders via seminars, websites and printed materials. Those who are seeking instruction in this arena should visit one of their websites or enroll in one of their upcoming seminars. For more information on the OIC, consult your stockbroker or financial advisor.