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Pro options > Day 2 > Flashcards

Day 2 Flashcards

1
Q

How do we select expiration Date?

A
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2
Q

How do we select strikes to trade?

A
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3
Q

opening and closing trades

A
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4
Q

Exercise defined deeper

A
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5
Q

assignment defined deeper

A
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6
Q

exercise/assignment of a call

A
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7
Q

exercise/assignment of a put

A
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8
Q

when to buy/sell options

A
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9
Q

4 position review

A
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10
Q

break even price for calls/puts

A
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11
Q

position graphs

A
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12
Q

Position graph3 considerations

A
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13
Q

how to calculate intrinsic value for call / put

A

if intrinsic value is NEGATIVE, then out of the money, and intrinsic value will be 0CALL : STOCK PRICE - STRIKE PRICEPUT: STRIKE PRICE - STOCK PRICE

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14
Q

long put graph direction

A

right to left

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15
Q

long call graph direction

A

left to right

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16
Q

long position risk/reward

A

limited risk, unlimited reward

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17
Q

short position risk/reward

A

risk is unlimited, reward is limited

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18
Q

breakeven calculation for PUT

A

Strike - premium = breakeven

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19
Q

breakeven calculation for Call

A

Strike + Premium = breakeven

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20
Q

Protecting stock

A

protects against gapswhen add put to a long stock position, the risk becomes like a “call” meaning, the loss is limited.aka Married Put

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21
Q

Protecting stock strategy

A
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22
Q

Protecting stock strategy 2

A
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23
Q

Stock at a Discount

A
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24
Q

Stock at a Discount Strategy Pt 1

A
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25
Q

Stock at a Discount Strategy Pt 2

A

only do with ETF index because stocks can become worthless. but ETF indexes can not

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26
Q

renting a stock or covered calls

A
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27
Q

renting a stock strategy pt 1

A
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28
Q

renting a stock strategy pt 2

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29
Q

Free protection pt 1

A
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30
Q

Free protection pt 2

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31
Q

Free protection strategy pt 1

A
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32
Q

Free protection strategy pt 2

A
33
Q

mimicing stock

A

use when you can’t short an actual stock- buying a call and selling a put that share the same strike creates the same effect as holding the stock long- buying a put and selling a call that share the same strike creates the same effect as holding the stock short- even though this strategy mimics the stocks, dividends would not be paid nor received since options do not convey ownership of the underlying- buy a call and sell a putor- buy a put and sell a call

34
Q

mimicing stock strategy

A
35
Q

moneyness review

A
36
Q

ITM Call Example

A
37
Q

OTM Call example

A
38
Q

ITM Puts Example

A
39
Q

OTM Puts Example

A
40
Q

Understanding Time Value

A
41
Q

2 different types of Volatility

A
42
Q

Inflated vs Deflated Volatility pt 1

A
43
Q

Inflated vs Deflated Volatility pt 2

A
44
Q

volatility interpretation

A
45
Q

historical volatility

A
46
Q

implied volatility

A
47
Q

implied volatility determines strategy

A
48
Q

inflated vs deflated optionsdo we buy or sell:deflated optionsinflated options

A
49
Q

how to figure out if inflated or deflated volatility

A
50
Q

How to know if Volatility is deflated

A
51
Q

How to know if Volatility is Inflated

A
52
Q

How to know if Volatility is Fair

A
53
Q

volatility measurement and methodology pt 1

A
54
Q

volatility measurement and methodology pt 2

A
55
Q

purpose of greeks with options

A
56
Q

greek letter meaning

A
57
Q

Delta

A
58
Q

Delta for calls

A
59
Q

Call Delta VS underlying Price

A
60
Q

Delta for Puts

A
61
Q

put delta vs underlying price

A
62
Q

interpretation of delta

A
63
Q

hard deltas vs soft deltas

A
64
Q

Delta Effect pt 1Call/put delta impact on premium

A
65
Q

Delta Effect pt 2delta as a measure of expiring ITM

A
66
Q

Delta Effect pt 3Delta for Hedging Purposes

A
67
Q

directional trading

A
68
Q

anchor unit

A
69
Q

single leg strategies

A
70
Q

very deflated single leg strategieslong call (debit / bullish)

A
71
Q

very deflated single leg strategieslong call (debit / bullish)action and maintenance

A
72
Q

very deflated single leg strategieslong call (debit / bullish)graph example

A
73
Q

very deflated single leg strategieslong call (debit / bullish)data example

A
74
Q

roll

A

sell option that you bought and buy new one that has more longer experation

75
Q

evolve

A
76
Q

Very Deflated Single Leg strategiesLong Put (Debit/Bearish)

A
77
Q

Very Deflated Single Leg strategiesLong Put (Debit/Bearish)action and maintenance

A
78
Q

Very Deflated Single Leg strategiesLong Put (Debit/Bearish)Graph

A
79
Q

Very Deflated Single Leg strategiesLong Put (Debit/Bearish)Data

A

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