Options Trading Strategy Test

Another name for "squaring off" is :

Opening a position

Closing a position

Leverage

None of the options are correct

Correct! Wrong!

The identical strike prices are quoted for a stock's three Call series, which are for May, June, and July. Which option premium will be the highest?

July

June

May

All will be on an equal footing

Correct! Wrong!

The maximum return on investment for equity option contracts is :

Unlimited

Premium received

As per investment

Limited

Correct! Wrong!

What is the crucial connection between a futures markets and an observer?

The futures price and the underlying instrument's cash price in the future at the delivery location stated in the futures contract.

The underlying instrument's present value and its future value at the delivery location stated in the contract.

The cost of retaining the underlying asset from the time of purchase till delivery, as well as its price.

The cost of keeping the underlying asset from the time of purchase to delivery, as well as the futures price.

Correct! Wrong!

What is the intrinsic value of a put option that is in the money?

Zero.

The stock price less the exercise price.

The value of a share less the cost of an exercise.

A premium for puts.

Correct! Wrong!

What is the measurement of the option value's sensitivity to a specific tiny change in the underlying asset's price?

Theta

Gamma

Chi

Sigma

Correct! Wrong!

What impact does a market-to-market contract have?

The agreement is reverted.

The underlying asset is delivered.

One of the contract's sides breaches the agreement.

Prices changes in the underlying market are reflected in the contract holder's margin account.

Correct! Wrong!

Another name for "squaring off" is :

The identical strike prices are quoted for a stock's three Call series, which are for May, June, and July. Which option premium will be the highest?

The maximum return on investment for equity option contracts is :

What is the crucial connection between a futures markets and an observer?

What is the intrinsic value of a put option that is in the money?

What is the measurement of the option value's sensitivity to a specific tiny change in the underlying asset's price?

What impact does a market-to-market contract have?

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