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ACA↗DEMIATRADE
Free Trading Course
Advanced Option Lessons

A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.

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Module 18: Regulatory Jurisdictions & ComplianceAdvanced 15 Min

Lesson 2: 18.2: Anti-Money Laundering (AML) & Know Your Customer (KYC) Protocols

Implement institutional AML protocols, Customer Due Diligence (CDD), SAR filings, and OFAC sanction screening.

1. Institutional AML & Customer Due Diligence (CDD)

Financial institutions must prevent financial networks from being utilized for money laundering or terrorist financing.

• KYC / CDD: Verifying customer identities, beneficial ownership of legal entities, and source of funds prior to account opening.

• OFAC Screening: Continuous real-time cross-referencing of account holders against the Treasury Office of Foreign Assets Control sanctions list.

★ Suspicious Activity Reports (SARs): Mandatory reporting of suspicious transaction patterns to FinCEN.

2. Transaction Monitoring Systems

Automated transaction monitoring software flags anomalous transaction velocity, structuring (smurfing), and high-risk jurisdiction transfers.

A flow diagram with the boxes Identity checks, Beneficial owners, Source of funds, Customer review and Ongoing monitoring
Identity checks, Beneficial owners and Source of funds feed into Customer review, which leads to Ongoing monitoring. A general AML and customer due diligence workflow. It is not a complete compliance procedure and does not state when reports must be filed.
Interactive Option Simulation Lab

IV Crush Scenario Visualizer

LAB SIMULATOR ACTIVE

Implied Volatility (IV) Crush is the primary account-killer for option buyers after earnings announcements. Play with the controls below to see how option premium collapses depending on Vega.

Scenario Modeling
Trader Stance
Implied Volatility (Post-Earnings):80%
Option Vega Level:0.3
⚠️ You bought options with an inflated IV of 80%. As IV collapses down to 80%, your contract hemorrhages premium value purely from volatility erosion.
PREMIUM DECAY OUTCOME
Initial Value (80% IV)$390
Post-Crush Value$390
Resulting P&L:+$0

KNOWLEDGE RECONNAISSANCE

Q01.

What report must financial institutions file with FinCEN when detecting suspicious transaction patterns?

More lessons in this module

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Signal Desk is where you practice this on real stocks: real option chains (about 15 minutes delayed), the Trade Check and a paper-trading account that risks no real money. Join to add it, your progress tracking and PDF downloads.

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