Take the Quiz | Are you ready to trade Options? | Mean Reversion Trading Using Options

#1. What is an Option Chain?

An Option Strategy consisting of a Long Call combined (or chained) with a Long Put

A Technical Indicator which generates Trading Signals on when to buy a Call Option on an equity

A Table with all the relevant Option Information

#2. What is a GTC limit order?

An order which doesn't get filled unless the price is Greater than a Call Options (GTC) strike price

An order which expires after the Greenwich Mean Time you specify (i.e the time limit)

An order which doesn't get cancelled unless you cancel it and doesn't get filled unless the limit price specified is met by the Exchange.

#3. Select the options that could profit from a rise in the underlying's price

Select all that apply:

Short PUT

Long PUT

Long CALL

Short CALL

#4. An Out of Money Put option contract is

A PUT whose strike price is lower than the current Stock Price

A PUT whose strike price is higher than the current Stock Price

A PUT where the strike price and the current Stock Price are the same

Question type not found

#6. XYZ is trading at $200 on expiration Friday. You are holding a short $190 Call in your portfolio. Which one of these is true?

You are going to get exercised on this call and will end up owning 100 shares of XYZ at $190 in your account.

You are likely to get assigned on this call and will end up putting you in a position of short 100 shares of XYZ at $190/share.

Since your short Call is lower than the stock price, there is no problem as this position will expire worthless

#7. Stock ABC is trading for $99, which options are ITM (In The Money)?

Select all that apply:

$90 CALL

$100 CALL

$100 PUT

#8. The following are characteristics of vertical spreads

Select all that apply:

They are non-directional strategies

They are only used as bullish strategies

Bull vertical spreads can be constructed only with calls

All of the above

None of the above

#9. If you wanted to trade the furthest out-of-the-money call, which delta would you choose?

.50

.30

.80

.100

#10. Which of the following options has the greatest risk of assignment?

ITM (In-the-Money)

ATM (At-the-Money)

OTM (Out-of-the-Money)

#11. If an option has $2 of intrinsic value and $1 of extrinsic value, what would the options premium be?

$2 - $1 = $1 in Premium

$2 in Premium as extrinsic value is irrelevant in Premium calculations

$2 + $1 = $3 in Premium

#12. Have you read the $25K Options Challenge Book? (The trading strategy is explained in detail in the Book)

Yes

No

Take the Quiz: Are you ready to trade Options?

We want to make sure that Options trading is right for you. Please take the quiz below to test your knowledge. A score of 7 or more is desirable if you want to participate in our group.

Results

#1. What is an Option Chain?

#2. What is a GTC limit order?

#3. Select the options that could profit from a rise in the underlying's price

#4. An Out of Money Put option contract is

#6. XYZ is trading at $200 on expiration Friday. You are holding a short $190 Call in your portfolio. Which one of these is true?

#7. Stock ABC is trading for $99, which options are ITM (In The Money)?

#8. The following are characteristics of vertical spreads

#9. If you wanted to trade the furthest out-of-the-money call, which delta would you choose?

#10. Which of the following options has the greatest risk of assignment?

#11. If an option has $2 of intrinsic value and $1 of extrinsic value, what would the options premium be?

#12. Have you read the $25K Options Challenge Book? (The trading strategy is explained in detail in the Book)