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Options > Option Basic > Flashcards

Option Basic Flashcards

1
Q

Long call

A

Right to buy Bullish

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2
Q

Short call

A

Obligation to sell. Bearish

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3
Q

Long put

A

Right to sell Bearish

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4
Q

Short Put

A

Obligation to buy Bullish

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5
Q

Long

A

Hold, Own, purchase, buy

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6
Q

Short

A

Sell, write

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7
Q

Holder exercises a contract must deliver?

A

Cash in 2 business days

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8
Q

Intrinsic value

A

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

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9
Q

Premium of a contract

A

Greater the volatility higher the premium

Greater the time higher the premium

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10
Q
A
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11
Q
A
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12
Q

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

A
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13
Q

With a short straddle computation they sell the straddles at

A

The call at the bid

The put at the bid

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14
Q

Long straddle computation for call and put

A

The call is the ask price

The put is the ask price

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15
Q

Lower strike call contracts always have

A

Greater premiums

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16
Q

The higher the strike price the more

A

Bullish I am

17
Q

Neutral covered call is

A

Stock price and option are same price

18
Q
A
19
Q

Opening purchases are used to establish or

A

Add to long position

20
Q

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

A

Opening sale

21
Q

When do options expire ?

A

Third Friday of the expiry month 1159

22
Q

The market sentiment of a customer who sells a call spread

A

Bearish

23
Q

Before options contract can be traded customer needs to

A

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

24
Q
A
25
Q
A
26
Q
A
27
Q

Customer who sells a put spread market sentiment

A

Bullish

28
Q

Vertical spread is

Aka Price and time spread

A

Different strike prices and same expirations

29
Q

Horizontal spreads

Calendar

A

Same strike different expirations

Profitability spread widens

30
Q

Diagonal spread

Combo vertical and horizontal spread it has

A

Different strike and expirations

31
Q

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

A

Generate additional income

32
Q

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

A

Used for protection

33
Q

Short the stock and long a protective call

A

Limited risk

34
Q
A
35
Q
A
36
Q
A
37
Q
A
38
Q
A

Options (1 decks)

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