Options: Recommending strategies to clients

Options are an important tool for performance protection and performance enhancement of an investor’s equity portfolio. It is important that relationship managers recognise how options are used and are able to communicate the rationale for using options effectively to clients. Relationship managers should be able to recognise the drivers of option pricing in order to recommend options to their clients and explain returns on an equity portfolio containing options.

By the end of this course, delegates will be able to:

• Evaluate options strategies for successful protection and enhancement of a client’s equity portfolio.
• Analyse market prices of options in order to recognise how they are derived and their potential future price development.
• Justify their analysis to clients so the clients recognise the value of an options strategy within the overall management of their portfolio.
• Represent their clients’ best interests when communicating with the market and with internal price makers during price discovery.
• Explain profit and loss performance of the options to the client, in the overall context of the portfolio, during the life of the options.
• Identify option trades that can be used to improve performance of the portfolio based on new market information.