NonEquity Options
An option with an underlying asset that is something other than common stock.
What is a Nonequity Option
An investor is long 1 January 20 call at 3.
Calculate Break Even, Max Gain, and Max Loss
What is
BE=23 (20+3)
Max Gain = Unlimited the stock could go to infinity
Max Loss = 300 Premium
If an investor is Short 1,000 shares of ABC Stock what would be the best hedge option?
What is a Call Option
The signed option agreement must be returned within how many days?
If not returned, no new options positions can be opened. Only closing transactions are allowed.
What is 15 days
In what type of call option does the writer already owns the underlying security.
What is A Covered Call Option
This index tracks the movement of the market segments in a specific industry such as technology or pharmaceuticals.
What is Narrow-based Indexes
An Investor is long 1 January 10 put at 2.
Calculate Breakeven, Maximum Gain, and Maximum Loss
What is
BE: Strike - Premium (10-2)=8*100=800
MG: Strike - Premium (10-2)=8*100=800
ML: Premium 200
What is the Breakeven calculation for a protective put?
What is Breakeven = stock price + Premium
Per the OCC: Listed option transactions settle?
Covered Call
Long 100 shares of XYZ at 40
Short 1 XYZ July 45 call @ 3
If the owner exercises the call, the writer will need to sell the stock at what price?
What is The Strike Price. $45
These options protect against the risk of a decline in the overall market.
The Maximum Gain for the seller of a Call and a Put are
A. Premium
B. Unlimited
C. Strike Price + Premium
D. Strike - Premium
What is A. Premium Paid
What is the Breakeven calculation for a protective call?
What is Breakeven=Stock price-premium
A contract between an investor and an issuer in which the issuer guarantees payment of a stated sum to the investor at some date in the future.
What is Face Amount Certificate
In this Put Option the writer does not have sufficient cash on hand to purchase the stock at the strike price. If the contract is exercised, the writer will need to come up with the cash from somewhere.
What is An Uncovered Put Option
If you are in the Import/Export Business, which currency option should you choose?
What is EPIC. Exporter buys Puts, Importer buys Calls.
Max Loss of the Buyer of a Call and Put are
A. Unlimited
B. Strike Price - Premium
C. Strike Price + Premium
D. Premium
What is D. Premium
Primary regulator for options?
What is OCC
What are the two types of managed investment companies?
What is Open-end and Closed-end
Which option styles are excersized only on expiration day?
What is Foreign Currency and Yield Based
If you are Short a Call what is your Max Loss?
What is Unlimited
The investor could be forced to buy the stock at a potentially unlimited Price, if buyer excersizes the option for delivery at the strike price.
Primary regulator for Trading Options
What is CBOE (Chicago Board of Options Exchange
One characteristic of this management company is their Ex-Date is set by it's board of directors.
What is Open End Management Company