Quiz
Chp 5
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Questions in this quiz (10)
1Which is not a part of the 3 part covered call?
- AWriting - to write up an options contract to sell
- BCovered - you own what you are trying to sell
- CCalls- type of option you will use
- DSell- the actual transmission of funds
2Which is not a goal of writing covered calls?
- ABuy as many new stocks as possible.
- BProfit on stocks you already own.
- CTo create cash flow
- DTo protect downside moves.
3With the right call strategy you can ensure you will not be assigned?
- ATrue
- BFalse
4In a proper covered call there are [blank_start]6-8[blank_end] steps?
- A6-8
- B3-4
- C9-10
- D10-12
5We should sell when resistance indicators are :
- ATurning bullish
- BTurning bearish
- CHave been bullish for a while
- DHave been bearish for a while.
6When selling cover calls how can an investor increase their chance of success?
- AResearch more fundamentals
- BUsing Technical analysis to identify timing.
- CUsing rate of return scanners
- DSelling more call
7When selling a call option it is placed as a single option trade with a[blank_start] "sell to open"[blank_end]
- Asell to open
- Bsell to close
- Cbuy to open
- Dbuy to close
8We should monitor our covered call trade throughout the day.
- ATrue
- BFalse
9The biggest risk Involved with covered call trades is what:
- AThe volatility of stocks stocks
- BDifficulty entering trades
- CThe amount of money invested
- DThe likelihood of quick reversals which cause sudden price changes
10If the stock begins to rally on increased volume and it appears it will close above the strike price we sold what should we do?
- AWait for it and monitor it closely
- BClose the position early
- CSell another call
- DWait until expiration
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- Description
- Quiz on Chp 5, created by Tarrah Coble on 04/12/2016.
- Author
- Tarrah Coble
- Language
- English
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