Options Test

1. Can options expire?

Only Calls expire Yes, every option has an expiration date Only Puts expire No, options last forever

2. When is a Call option considered ITM?

When the stock price is above the strike price When the stock price is below the strike price When the premium is zero When the option has no buyer

3. What does ATM mean in options?

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

4. Why do options lose value as expiration approaches?

Because time value decreases Because options become shares Because stocks stop trading Because premiums are refunded

5. Which Greek is most related to time decay?

Rho Delta Gamma Theta

6. What is the main risk of buying options?

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

7. What is extrinsic value?

The part of the premium based on time, volatility, and expectations The guaranteed profit The tax value The company dividend

8. What are LEAPS?

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

9. What is intrinsic value?

The number of shares in an account The real value an option has if it is ITM The broker commission The dividend payment

10. What does Theta measure?

Dividend yield Time decay Stock ownership Open interest

11. What does Vega measure?

Broker margin Stock dividends Sensitivity to implied volatility changes Time decay

12. What is a short option position?

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

13. Why do far OTM options usually cost less?

They have a lower probability of expiring ITM They never expire They are guaranteed to profit They contain more intrinsic value

14. What usually happens to implied volatility after earnings?

It becomes zero forever It often drops It turns into Delta It always doubles

15. What is trading volume in options?

The company’s annual revenue The broker’s commission The expiration price The number of contracts traded during a period

16. What does time value mean in options?

The number of trading apps used The company’s age Value based on time remaining before expiration The time the market opens

17. What is the expiration date?

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

18. Why are options often expensive before major news events?

Because implied volatility is usually higher Because they cannot expire Because brokers set all prices manually Because premiums are fixed

19. What does Delta measure?

How much the option price may change when the underlying moves $1 Expiration date Time decay Trading volume

20. Which Greek measures directional exposure?

Rho Vega Delta Theta

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

Higher implied volatility Increased demand More time remaining Time decay

22. What is Theta decay?

A broker commission The increase in shares owned The loss of option value as expiration approaches A type of stock split

23. Higher implied volatility generally causes option premiums to:

Stay fixed forever Disappear Increase Decrease to zero

24. Why are liquid options preferable?

They always expire ITM They remove all risk They usually have tighter spreads and easier execution They never lose money

25. What is an options chain?

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