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1Credit spreads are also known as or another name for doing a credit spread is:
- A"selling a put spread"
- B"short a put spread"
- C"selling time"
- D"buying a call spread"
2A bull put spread requires you to:
- Abuy a put at a higher strike price and sell a put at a lower strike price
- Bbuy a put at a lower strike price and sell a put at a higher strike price
- Cbuy a put at a higher strike price and sell a call at a lower strike price
- Dbuy a put at a lower strike price and a sell a call at higher price
3Spread Amount- Option Credi t= [blank_start]Total investment[blank_end]
- ATotal investment
- Btime value
- Cstock profit
- Doption cost
4Bonus: What is the Total spread If the stock profit of a spread is $5.00 and the Option cost is $2. 75
- A$2.75
- B$5.00
- C$2.25
- D$7.75
5;A credit spread begins every transaction by paying: [blank_start]you[blank_end]
- Ayou
- Bthe market maker
6In a bull put spread the put bought has a lower strike price. It is also farther away from the stocks trading price which means it has:
- Amore time value than the put sold
- Bhigher cost
- Clower time value than the put sold
- Dlower volume
7The ideal scenario for a bull put spread is
- Afor the stock to close above the put strike price of the one bought
- Bfor the strike to close between the strike of put bought and breakeven
- Cfor the stock to close above the strike of the put you sold
- Dfor the stock to close between the strike of the put sold and breakeven
8max lost = [blank_start]total investment[blank_end]
- Atotal investment
- Btime value
- Coption profit
- Dspread credit
9The benefit to doing a credit spread is that we start off with a trade profit where does the profit come from?
- Athe profit from a previous option transaction
- BMarket makers pay you in good faith that the trade will close high because of a bullish trend
- Cthe premium from the put you sold
- Dthe premium from the put you bought
10If you are nervous that you will be assigned on your trade and the market is still open what should you do?
- Asell another put option
- Bcomplete a buy to close
(GTC) on the short side of the spread - Cwait and hope for the best
- Dcancel your order
11Credit Spreads require the stock to move up to make a profit.
- ATrue
- BFalse
12If you sell a put for $30 and buy a put for $25 for $1.50 credit and your stock closes at $31.00 what is your max loss?
- A$1.50
- B$3.50
- C$3.00
- D$2.00
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- Quiz on Untitled, created by Tarrah Coble on 25/01/2017.
- Author
- Tarrah Coble
- Language
- English
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