The complex world of options trading can provide knowledgable investors with quick profits, regular income, and protection against losses. Unfortunately, many investors are lured by the quick-profit potential and choose to merely dabble with these instruments without knowing what they’re doing. This often leads to substantial losses.
In order to mitigate this effect and better prepare investors for the ups and downs of options investing, the Options Clearing Committee (OCC) created and sponsors the Options Industry Council (OIC). The OIC seeks to educate investors about the risks, mechanics, and characteristics of options as well as specific strategies and how to use them.
Nature and Purpose
Unlike FINRA, the SEC, and other regulatory entities, the Options Industry Council is purely educational in nature. It has no official authority or function other than to teach the public about options and to educate brokers and investors on how they can be used most effectively.
The organization has a number of educational tools by which they accomplish this. They educate on virtually everything from basic options strategies like a covered call option to advanced options strategies like an iron condor. Moreover, much of their information is available free of charge.
Headquartered in Chicago, Illinois, the OIC is essentially a shell organization in a sense; there are only a few people working full-time for the Council itself, who are not also employees of one of its members.
OIC currently consists of ten executives responsible for each of its different educational platforms and functions. All educators are employees of either the OCC, one of the exchanges, or other members of the Council, and they receive no compensation from the OIC directly for the services they provide.
The OIC is overseen by two chief executives:
Gina McFadden serves as both the President of the OIC and Executive Vice President of Industry Services. She is responsible for both corporate communications and the Investor and Internet Services Divisions. She also serves on a number of other boards and committees, including the OIC Roundtable, the STA Options Committee, the Equity Options Trading Committee, Women in Listed Derivatives, and the Futures Industry Association.
Ms. McFadden has completed the Securities Industry Institute’s Program at Wharton School of Business at the University of Pennsylvania. She holds a bachelor’s degree from Barat College in Illinois and went on to complete the Kellogg Management Institute Graduate Program at Northwestern University.
Mary Savoie serves as the Executive Director and is also First Vice President of the Industry Services division. Ms. Savoie is responsible for all corporate communications, public relations, and educational programs sponsored by the Council. She is also in charge of marketing for both the OIC and the OCC.
She received her bachelor’s degree in economics from Stanford University and also went through the Kellogg Management Institute Graduate Program there. She completed the Securities Industry Institute’s Program at Wharton School of Business at the University of Pennsylvania and holds an MBA in finance and marketing from Northwestern University.
History of the OIC
The OIC was created in 1992 through a joint venture of several partners in the securities industry. The Options Clearing Corporation (OCC) teamed up with the Chicago Board of Options Exchange (CBOE), the NYSE, AMEX, and two other exchanges to sponsor it. An opening celebration was held on September 30, 1992 in New York and was followed by a multimillion dollar educational campaign aimed at renewing public awareness of options trading.
OIC began producing a newsletter in 1994 known as the Blueprint and launched its website, Options Education, in 1996. The website was redesigned in 2000 and renamed 888 Options and an options call center was opened to service both professionals and the public. In 2007, the OIC launched a new website specifically for institutional traders. Several other organizations have joined the OIC since its inception, including the International Securities Exchange, the NASDAQ Options Markets, and BATS Options.
Educational Tools for Options Trading
The OIC offers a comprehensive array of tools, programs, and other resources designed to educate investors, brokers, and institutions about options trading at all levels of expertise. Their websites, including tutorials, tools, and information, are kept current and are updated regularly by options experts. A list of their educational initiatives includes:
OIC sponsors hundreds of seminars around the country taught by instructors who have worked as traders on one of the exchanges. They usually run for about three hours and require prior registration. They also conduct seminars at trade conventions that cover a range of topics for beginning to professional investors, such as calendar, back and diagonal spreads, collaring strategies, and technical analysis.
The OIC call center can be reached at 1-888-options, 1-888-678-4667, or (312) 463-6193. It is staffed by options education professionals every trading day from 7:30 AM to 5:00 PM CST. Call center personnel can answer academic questions about options, but will not make recommendations or provide advice of any kind. As mentioned previously, the employees who staff the call center are employees of one of its members, such as OCC or an exchange.
The OIC’s websites offer a plethora of resources for investors, including:
- Podcasts and webcasts provided by professional options traders that cover a variety of options-related topics. These are updated periodically and archived on the website.
- Comprehensive online tutorials that cover all aspects of options trading, including spreading, pricing, volatility, and other characteristics. A separate section covers all types of trading strategies, such as covered calls, collars, married puts, spreads, and straddles.
- The Virtual Trading System is a patented simulated trading program that allows investors to enter paper trades based on live market quotes and view the results. This section of the website also contains several screening tools and calculators by which traders can search for and screen options according to specific criteria, such as strike price or expiration date. It also allows traders to quickly determine possible gains, losses, and exposure for potential trades.
- A complete glossary of options-related terminology.
The OIC offers a partnership program to other financial institutions, such as broker-dealers and exchanges, and allows its partners to access the OIC website and other resources through hosting or similar arrangements. In this way, financial professionals can access the resources of OIC through their own employers and they can further use it to educate their clients. All of the educational materials produced by OIC are compliance-approved and safe for client distribution.
The Options Industry Council is sponsored by all major options trading entities in the securities industry, and its primary function is to educate the public about the risks, characteristics, and benefits of options trading. It offers a wealth of educational tools to help investors learn how to trade these instruments correctly and profitably.
Since the world of options trading is vast and regularly evolving, most traders – novice and experienced – can benefit from the expert advice made readily available through the OIC.