Options Insight: How to Play Costco

Options Insight: How to Play Costco

Assessment

Interactive Video

Business

University

Hard

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The video discusses the concept of witching day, where futures and options contracts expire, typically leading to increased market volatility. However, current market conditions show lower than expected volatility, possibly due to investor sentiment about the upcoming Fed decision, which is anticipated to result in no changes. The video also highlights a potential investment opportunity in Costco, based on technical analysis and upcoming earnings. An options strategy involving selling puts and buying calls is proposed to capitalize on this opportunity.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is typically expected on a 'witching' day in the market?

A decrease in trading volume

An increase in market volatility

A rise in stock prices

A stable market with no changes

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why is the current market not showing the expected volatility?

The Fed's decision is seen as a foregone conclusion

The market is experiencing a stable period

Investors are uncertain about the Fed's decision

There is a high chance of interest rate changes

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the current investor sentiment regarding the Fed's decision next week?

High anticipation of a rate hike

A foregone conclusion of no action

Expectation of a rate cut

Uncertainty and suspense

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What technical level is considered a support for Costco's stock?

152

153

151

150

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the investment strategy discussed for Costco?

Buying a put and selling a call

Selling a put and buying a call

Buying both a put and a call

Selling both a put and a call