Option Basic

Question 1

Long call

Answer 1

Right to buy Bullish

Question 2

Short call

Answer 2

Obligation to sell. Bearish

Question 3

Long put

Answer 3

Right to sell Bearish

Question 4

Short Put

Answer 4

Obligation to buy Bullish

Question 5

Long

Answer 5

Hold, Own, purchase, buy

Question 6

Short

Answer 6

Sell, write

Question 7

Holder exercises a contract must deliver?

Answer 7

Cash in 2 business days

Question 8

Intrinsic value

Answer 8

Difference between st and not price if security if exercise is profitable to the holder

Question 9

Premium of a contract

Answer 9

Greater the volatility higher the premium

Greater the time higher the premium

Question 10

Question 11

Question 12

Which business forms would suitability information on the owners not be required ?

C corporation

Is only business form where tax and other consequences of the acct do not accrue to the individual owners

Question 13

With a short straddle computation they sell the straddles at

Answer 13

The call at the bid

The put at the bid

Question 14

Long straddle computation for call and put

Answer 14

The call is the ask price

The put is the ask price

Question 15

Lower strike call contracts always have

Answer 15

Greater premiums

Question 16

The higher the strike price the more

Answer 16

Bullish I am

Question 17

Neutral covered call is

Answer 17

Stock price and option are same price

Question 18

Question 19

Opening purchases are used to establish or

Answer 19

Add to long position

Question 20

Which of the following are used to establish or add to a short position

Answer 20

Opening sale

Question 21

When do options expire ?

Answer 21

Third Friday of the expiry month 1159

Question 22

The market sentiment of a customer who sells a call spread

Answer 22

Bearish

Question 23

Before options contract can be traded customer needs to

Answer 23

Receive the OCC disclosure document
Gets approval from ROP
Can do first trade or opening purchase or opening sale
Within 15 days of acct approval must return the signed option agreement

If late closing sale or closing purchase only

Question 24

Question 25

Question 26

Question 27

Customer who sells a put spread market sentiment

Answer 27

Bullish

Question 28

Vertical spread is Aka Price and time spread

Answer 28

Different strike prices and same expirations

Question 29

Horizontal spreads | Calendar

Answer 29

Same strike different expirations Profitability spread widens

Question 30

Diagonal spread | Combo vertical and horizontal spread it has

Answer 30

Different strike and expirations

Question 31

Long the stock and short the call contract (covered call) does what

Answer 31

Generate additional income

Question 32

Long the stock and long the put (married put) what does that do

Answer 32

Used for protection

Question 33

Short the stock and long a protective call

Answer 33

Limited risk

Question 34

Question 35

Question 36

Question 37

Question 38