Options Flashcards
1
Q
Who is the holder of an option?
A
Buyer
2
Q
Who is the writer of an option?
A
Seller
3
Q
Who has the right (or option) to do something?
A
Buyer
4
Q
Who has the obligation to perform?
A
Seller
5
Q
By definition a premium is comprised of what 2 things?
A
time premium and intrinsic value.
6
Q
A buyer is Bullish on a (call or put)
A
Call
7
Q
A put option gives the holder the right to
A
sell
8
Q
What type of risk does the clearinghouse eliminate in a futures contract?
A
Counterparty risk
9
Q
Options Clearing Corporation (OCC) guarantees ______________
A
the performance of both parties.
