Options Quiz 1

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Take your time because not all questions are easy. You sold a call option, hoping it would expire worthless. However, the stock moved higher and the call option is now in the money by five points. You are anxious to eliminate this position from your portfolio. Which of these choices is possible:. Exercise your call option b. Buy the identical call option c. Tell your questions and anwsers on option trading to notify the option owner to exercise questions and anwsers on option trading option d.

None of this is possible. Long shares of XYX b. Short shares of XYX c. A stock position is never equivalent to an option position. You own five European style index options. Which of the following is true? You may exercise the options any time before they expire b. You may sell the options any time before they expire c. The options expire at the close of business on the 3rd Friday of the month d.

If you exercise a call option, you will be the proud owner of a basket consisting of different stocks. When you want to buy a put option now, which of these prices is most important:. The last price at which a trade occurred c.

The ask price d. When you buy 10 call options to open a new position, what happens to the open interest? It increases by 10 b. It decreases by 10 c. It depends on the position of the person who sells the options d.

None of the above. Other Recent Option posts:. Volume Interpretation Quiz Answers. Stock Chart Education Test Answers. Enter your email address.

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Performance - Plain and Simple. Try a search first and see if we've answered it already. Therfore my question is could options better this return and how? I'm confused on how to set a stop loss order and follow a good risk management rules. What type of option order do you place on the trading platform trailing stop, stop limit order, order cancels other, conditional order? When I pay up, it goes against me, when I put a low bid in it runs up without me.

What can I do? What exactly is that? Can you please explain what relative strength and weakness mean as they pertain to options trading? However, when I place a limit order I rarely get filled unless the stock moves against me in a big way.

I pulled this question from the archives because the lesson still applies. When we get stopped out on a put spread why do we close the whole position? I have noticed that if we covered the short leg and keep the long leg the chances are good that we will minimize our loss or possibly make a profit. A good example was the LEH put spread. I realize that the down side is losing the spread minus the premium but if you are careful and watching what is going on with the markets the odds seem to be in your favor.

I was wondering if you could give me some advice on how to get an entry-level position trading options. I would like to learn the job from a professional. I currently trade on my own and have a basic understanding of equity options and some more advanced strategies from reading various trade journals.

Where might one apply for a position like this? I have a B. I'm not an "Ivy Leaguer" and I'm having trouble getting into a training program at the institutional level. I have a strong desire to make this my profession. I live in the Northeast but would be willing to move. Any ideas would be greatly appreciated.

Every month we can always find options with very high implied volatility, especially from pharmacuetical companies that are waiting for FDA approval.

Is there any proven way to profit from this situation regardless of the decision of FDA? Defining Relative Strength and Weakness Posted by Pete Stolcers on February 14 Option Trading Question Can you please explain what relative strength and weakness mean as they pertain to options trading?

Posted by Pete Stolcers on October 15 Option Trading Question I pulled this question from the archives because the lesson still applies. Posted by Pete Stolcers on September 15 Option Trading Question I was wondering if you could give me some advice on how to get an entry-level position trading options.

Posted by Pete Stolcers on July 22 Option Trading Question Every month we can always find options with very high implied volatility, especially from pharmacuetical companies that are waiting for FDA approval. Option Strategies - Good and Bad! Is Covered Call Writing Risky?