Terms 79-90

Question 1

CBOE

Answer 1

Chicago Board of Options Exchange

Question 2

Long Call Strategy

Answer 2

Buying a call option on an upward trend to buy at the lower strike price

Question 3

Short Call Strategy

Answer 3

Selling or writing a call option to receive the premium income

Question 4

Covered Writer

Answer 4

Selling an option while holding the security long in an existing account

Question 5

Long Put Strategy

Answer 5

Buying a put option at a higher strike price hoping the value falls below the strike price

Question 6

Short Put Strategy

Answer 6

The sale of a put option to receive the premium on the contract

Question 7

Bullish Strategy

Answer 7

Belief that the price of a security will rise in value

Question 8

Bearish Strategy

Answer 8

The belief the the price will fall in value

Question 9

Index Options

Answer 9

Option contract on stocks that are part of a defined index such as the S&P 500

Question 10

Broad-based Index

Answer 10

Index that derives its value from a variety of stocks such as the S&P 500

Question 11

Narrow Based Index

Answer 11

Index that derives its value from a particular industry or economic sector.