Free intro

Derivatives, in plain English

A concept-only walkthrough of derivatives — written for people coming from corporate finance, M&A, audit, treasury or FP&A who want to understand what option traders mean without going through 400 pages of stochastic calculus. No formulas. No code. Real-world analogies. A "Try it" link to a pricer when one helps.

Vocabulary

The five words you need to stop hesitating about.

An option is a right, not an obligation

The simplest financial contract you can write down. Skip this and nothing else makes sense.

Call vs Put — when do I want which?

A bullish view buys calls. A bearish view buys puts. The interesting question is why anyone wants to *sell* either.

ITM, ATM, OTM — in plain English

What in / at / out-of the money really mean, and why traders care about the *moneyness* of an option.

Why three different prices: strike, spot, forward

Strike is what you agreed. Spot is right now. Forward is what you pay if you delay. They're not interchangeable.

The forward is NOT the market's prediction

It's the cost of replication — borrow cash, buy the asset, carry to maturity. No views involved.

Risk & Value

What actually drives the price of an option, in pictures rather than formulas.

Volatility is uncertainty, not direction

The single concept that most equity research analysts get wrong when they walk into derivatives.

Greeks without a single formula

Δ is exposure. Γ is how exposure changes. Vega is sensitivity to uncertainty. Theta is rent.

Why time costs money to the buyer

Theta as the rent you pay every day for keeping optionality alive.

Why buy options at all? Insurance vs leverage

Two opposite reasons to want optionality, and why nobody outside derivatives can tell them apart.

Structured products

Pre-packaged bets dressed up as products. What the brochure doesn't tell you.

Discount Certificate — buy stock at a discount, cap the upside

Implicit short call: sell upside above the cap, get paid for it now.

Bonus Certificate — guaranteed minimum, with a catch

The protection looks great on the brochure, terrible in a crash.

Reverse Convertible — high coupon isn't free money

You're selling a put. The high coupon is the put premium dressed up as yield.

Turbo — leveraged tracker that dies on a barrier

Cheap leverage with a built-in stop-loss. Sounds great until the stop-loss triggers on a flash crash.

Cross-cutting concepts

The principles that quietly govern every derivative price.

No-arbitrage — why free lunch doesn't last

Every formula in derivatives ultimately rests on this one assumption.

Risk-neutral pricing in three sentences

Nobody trusts your forecasts. Everybody agrees on the cost of replication. So we price off the cost.

Once a concept clicks, the rest of the platform — the pricers, the Coach Q&A, the cheat sheets — becomes a place to practice rather than to study.