Options Test

1. What does Gamma measure?

How fast Delta changes The number of shares owned Only the bid price How fast time passes

2. What is the expiration date?

The date the company reports taxes The date the option contract ends The date the stock market closes permanently The date dividends are paid

3. Higher implied volatility generally causes option premiums to:

Disappear Increase Decrease to zero Stay fixed forever

4. What is an options contract?

A financial contract giving the buyer the right, but not obligation, to buy or sell an asset A company ownership certificate A bank loan A savings account

5. Which Greek measures directional exposure?

Theta Vega Delta Rho

6. What is a short option position?

Buying stock only Closing a bank account Buying an option contract Selling or writing an option contract

7. What can happen with wide bid-ask spreads?

Premiums are guaranteed Traders may pay more to enter and receive less to exit Trades become free Contracts never expire

8. What are LEAPS?

A type of crypto token Long-term options with expiration dates far in the future A broker fee Options that expire the same day

9. Why should traders monitor implied volatility before buying options?

To change the expiration date To guarantee profit To remove all risk To avoid overpaying for expensive premiums

10. What happens if an option buyer does nothing before expiration?

The premium is refunded The option may expire worthless or be handled based on broker rules The option becomes stock forever The trade is erased

11. What does liquidity mean in options?

How easily an option can be bought or sold How long the market is open How much cash a company owns How much dividend is paid

12. What is volatility crush?

A broker fee A stock split A guaranteed profit strategy A sharp drop in implied volatility after an expected event

13. What is the primary advantage of buying options instead of shares?

Options can provide leverage with less upfront capital Options have no risk Options always pay dividends Options never expire

14. What does ATM mean in options?

Approved Trading Method After Trading Market At The Money Automated Teller Machine

15. What is an options chain?

A password list A list of company employees A table showing available option contracts A dividend calendar

16. What is an option premium?

The price paid to buy the option contract A government fee A broker bonus A stock dividend

17. Which factor usually decreases an option’s value over time?

Time decay Higher implied volatility Increased demand More time remaining

18. When is a Put option considered ITM?

When the stock price equals zero When the stock price is above the strike price When the option expires When the stock price is below the strike price

19. What is open interest?

The number of company shares only The stock dividend The broker’s interest rate The number of outstanding option contracts

20. What does Vega measure?

Broker margin Stock dividends Sensitivity to implied volatility changes Time decay

21. What does a Call option give the buyer?

The right to buy the underlying asset The right to receive dividends The obligation to sell shares The right to sell the underlying asset

22. What is the main risk of buying options?

The stock cannot move The option can expire worthless and the buyer can lose the premium The buyer has unlimited loss The broker always refunds the trade

23. What does Theta measure?

Time decay Open interest Dividend yield Stock ownership

24. Which Greek is most related to time decay?

Theta Delta Gamma Rho

25. What does leverage mean in options?

Avoiding expiration Controlling exposure to a larger asset value with less capital Receiving guaranteed profit Borrowing from a bank only