Options Trading Tutorial - Show all your work?

Show all your work?

Show all your work * An increase in which of the following would increase the price of a call option on common stock, ceteris paribus? 1. Stock Price 2. Stock Price Volatility 3. Interest Rates 4. Exercise Price 1. II only 2. II and IV only 3. I, II and III only 4. I, III and IV only 5. I, II, III and IV * * Which of the following is true? 1. Forward contracts have no default risk 2. Future contracts require an initial margin requirement to be paid 3. Forward contracts are marked to market daily 4. Forward contract buyers and sellers do not know who the counterparty is 5. Future contracts are only traded over the counter * * You have agreed to deliver the underlying commodity in 90 days. Today the underlying commodity price rises and you get a margin call. You must have: 1. A long position in a future contract 2. A short position in a future contract 3. Sold a forward contract 4. Purchased a forward contract 5. Purchased a call option on a future contract * * You find the following current quote for the June T-Bond contract: $100,000; Pts 32nd, of 100%. Open High Low Settle Open Interest 89-16 89-16 88-22 88-28 45,348 You went long in the contract at the open. Which of the following is/are true? 1. By the end of the day your margin account would be increased 2. 45,348 contracts were traded that day 3. You agreed to deliver in June $100,000 face value T-Bonds in exchange for $88,875. 4. You agreed to purchase in June, $100,000 face value T-Bonds in exchange for $89,500. 1. I, II and III only 2. I, II and IV only 3. I and III only 4. I and IV only 5. IV only * * A speculator may write a call option on stock with an exercise price of $15 and earn a $3 premium if they though: 1. The stock price would stay at or above $15 2. The stock volatility would increase 3. The stock price would rise above $18 4. The stock price would stay at or below $18 5. Both A and B could be true * * The higher the exercise price, the________the value of a put and the_______the value of a call. 1. Higher; higher 2. Lower; lower 3. Higher; lower 4. Lower; higher * A stock has a spot price of $35. Its May options are about to expire. One of its puts is worth $5 and one of its calls is worth $5. The exercise price of the put must be________and the exercise price of the call must be__________. 1. 30; 40 2. 35; 35 3. 40; 30 4. 25; 45 5. One can't tell from the information given * Suppose a stock is priced at $50. You are bullish on the stock and re considering March calls with an exercise price of $45 and $55 respectively. The 45 call is priced at $8.50 and the 55 call is quoted at $2.75. What should you consider in deciding which to purchase if you do not plan on exercising prior to maturity? Be specific.

Public Comments

Am I suppose to read all that jibberish? Do you feel better now that you have gotten all that off your chest?
I think there is a text book you need to be studying, so you understand all the terminology and nuances, then ask ONE question here about anything you don't understand in your studies.