Options Trading, Finance And Accounting

Question: What is the primary method to mitigate risk?
A
Diversifying investment holdings

B
Day trading

C
Purchasing only tech stocks

D
Purchasing stock in the company you work for

Note: Answer not sure
1. Report
Question: What would be the risk tolerance level of a retired government worker in general?
A
High

B
Moderate

C
Varies indefinitely

D
Low

Note: Answer not sure
1. Report
Question: When is the straddle trading strategy appropriate?
A
When the price may move by a small amount

B
When an investor believes there will be a large decrease in the stock price

C
When an investor believes there will be a large increase in the stock price

D
When an investor believes there will be a large stock price movement, but does not know in which direction

Note: Answer not sure
1. Report
Question: What is a "call"?
A
An options contract which gives the holder the right to buy a stock at a predetermined price

B
A stock which is long

C
An options contract which gives the holder the right to sell a stock at a predetermined price

D
Placing an order to buy options

Note: Answer not sure
1. Report
Question: Would a person who actively buys and sells options contracts be considered an investor?
A
No, they are a commission broker.

B
No, they are a trader looking for short term gains.

C
Yes, they are investing their money.

D
Yes, they are an options investor.

Note: Answer not sure
1. Report
Question: What is meant by a "butterfly" trading strategy?
A
Selling two options either put or call

B
Complex trading strategy involving buying two calls and selling two calls

C
Buying two put options at different strike prices

D
Selling only call options on stock you own

Note: Answer not sure
1. Report
Question: What is "strike price"?
A
The price of the option

B
The price at which the trader hopes to sell the option

C
The current trading price of the option

D
The price on an options contract at which the underlying stock can be bought or sold

Note: Answer not sure
1. Report
Question: What does an options trader look for when charting?
A
Options that trade in a very narrow band

B
Options which have completely unpredictable pricing

C
Options which have broken the trend

D
Options with near term expiration dates

Note: Answer not sure
1. Report
Question: Which of the following is the least risky investment in options?
A
Selling options which expire in the following month

B
Selling options which expire one year from now

C
Selling call options with an expiration of two months from now without owning the underlying stock

D
Selling call options with an expiration of one month from now without owning the underlying stock

Note: Answer not sure
1. Report
Question: Why would a trader liquidate a portfolio?
A
Because it is illegal to hold it too long

B
To avoid being labeled as a day trader

C
Because he has made too much money already

D
Because he is no longer interested in the classification of stocks

Note: Answer not sure
1. Report

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Question: What is the primary method to mitigate risk?

Question: What would be the risk tolerance level of a retired government worker in general?

Question: When is the straddle trading strategy appropriate?

Question: What is a "call"?

Question: Would a person who actively buys and sells options contracts be considered an investor?

Question: What is meant by a "butterfly" trading strategy?

Question: What is "strike price"?

Question: What does an options trader look for when charting?

Question: Which of the following is the least risky investment in options?

Question: Why would a trader liquidate a portfolio?