1.3.4 Quiz – GhosTrades

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1.3.4 Quiz

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1.3.4 Quiz

1. Basic Charting 1.3 Building Your Technical Vocabulary 1.3.4 Option Trading Glossary 1.3.4 Quiz

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Question 1 of 5

1. Question
What is the primary purpose of option trading?
- Speculating on short-term market movements.
- Predicting the direction of interest rates.
- To control underlying assets by implementing strategies in order to manage risk and enhance portfolio returns.
- To keep the stock market interesting and the traders on their toes.
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Question 2 of 5

2. Question
What is the strike price (exercise price) in an options contract?
- The price at which options are bought or sold.
- The price paid by the options buyer.
- The cost of the option premium.
- The price at which the holder can buy (call) or sell (put) the underlying asset.
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Question 3 of 5

3. Question
What does it mean for an options contract to be “in the money” (ITM)?
- The underlying asset's price is below the strike price for call options and above the strike price for put options.
- The options contract has expired.
- The options contract has no intrinsic value.
- The underlying asset's price is expected to remain stable.
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Question 4 of 5

4. Question
What does the term “delta” measure in options trading?
- The sensitivity of option prices to changes in the underlying asset's price.
- The change in implied volatility.
- The number of options contracts available.
- The impact of time on option premiums.
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Question 5 of 5

5. Question
What is the option premium in an options contract?
- The fee paid to the broker.
- The price an option can be purchased or sold.
- The market capitalization of the underlying asset.
- The options chain for a specific asset.
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