This article originally appeared at Option Elements.
There was a quiz on another option blog last week and I thought it was a good idea to constantly brush up on our skills. Tests and quizzes always are good to help you know if you really understand a subject or not.
I’m thinking this might be a good weekly article to keep us sharp. Let’s try a short quiz:
1. With a stock price of $58, a 50-strike call will have a minimum value of:
E. Not enough information to answer the question.
2. If you sell an option, the most you can lose is the amount you sold the option for.
3. Options are similar to what other financial product?
D. Mutual Funds
4. “Buy stock and sell call options” is commonly known as what strategy?
A. Synthetic Long Put
B. Covered Stock
C. Covered Call
D. Naked Call
5. Which options have the highest time premium component?
6. Which option has the highest VEGA with the stock at $100 on March 1st?
A. MAR 115 CALLS
B. APR 115 CALLS
C. APR 120 CALLS
D. MAY 120 CALLS
Submit your answers to firstname.lastname@example.org and we’ll send you the answers back right away!