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WorksheetsOPTION CONTRACT ( NUMERICALS )
Total questions: 25
Worksheet time: 1hrs 15mins
What does the term "stock liquidity" refer to?
The ease with which a stock can be bought or sold without significantly affecting its price
The total number of shares outstanding for a company
The difference between a stock's current price and its intrinsic value
The amount of debt a company has in relation to its equity
Which term refers to the price an investor is willing to sell a stock?
Bid price
Ask price
Market price
Strike price
Which of the following measures a stock's volatility?
Dividend yield
Price-to-Book ratio(P/B ratio)
Price-to-earnings ratio (P/E ratio)
Beta
Which Option Greek measures the time decay in the value of an option or its Premium?
Gamma
Theta
Delta
Vega
How are options contracts settled in the Indian stock market?
Options contracts are settled through physical delivery of the underlying securities.
Options contracts are settled in cash without the need for physical delivery of the underlying securities
Options contracts are settled by transferring ownership of the underlying securities to the option holder
Options contracts are settled through the exchanges of securities
The number of futures contracts outstanding is called?
Liquidity
Volume
Float
Open Interest
Which of the following options trading strategies involves simultaneously selling a call option and buying a put option with the same expiration date and underlying asset?
Iron condor
Butterfly spread
Straddle
Covered call
A call option exists on the stock of Macroswift Corporation. The exercise price is $45. Right now the call option can be purchased for $7. Macroswift stock is currently selling for $50 per share. What is the "intrinsic value" of the call option?
$0
$3
$2
$5
Last month, Mary bought a call option on ABC Corp. stock, having an exercise price of $30. Mary paid $1 for this call. Today, ABC stock is trading at $40 per share. Which of the following is true?
Mary has now realized a $10 profit.
Mary has now realized a $10 loss.
Mary's option is out of the money.
Mary's option is in the money.
A call option contract on shares of Company A has an exercise price of €50. The option is in the money when the share price of Company A is:
€45
€50
€55
Which of the following options would be described as being in the money?
A put option in which the underlying’s price is lower than the exercise price.
A call option in which the underlying’s price is lower than the exercise price.
A put option in which the underlying’s price is higher than the exercise price.
Which of the following parties to an option contract on a company’s shares is obligated to buy shares at the option strike price if the option is exercised?
Put seller
Put buyer
Call seller
The value of a call option, relative to other comparable call options, will be higher if the time to maturity and price volatility of the underlying asset, respectively, are:
longer; higher
shorter; lower
shorter; higher
You dont have a stock and you know a stock will move immediately on upcoming news. However you dont know the direction of the movement, it can be up and can be down. You can make money by
buying both a call option and a put option
buying a call option only
buying a put option only
do nothing
Mr. X purchases 100 put option on stock S at Rs 30 per put with strike price of Rs 280. If on exercise date, stock price is Rs 350, ignoring transaction cost, Mr. X will choose _____________.
To exercise the option
Not to exercise the option
May or may not exercise the option depending on whether he is in his hometown or not at that time
May or may not exercise the option depending on whether he like the company S or not
An option with a delta of 0.5 will increase in value approximately by how much, if the underlying share price increases by Rs 2?
Rs.1
Rs. 2
Rs.4
There would be no change
Client A has purchased 10 contracts of December series and sold 7 contracts of January series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open positions?
10
7
3
17
You sold a Put option on a share. The strike price of the put was Rs 245 and you received a premium of Rs 49 from the option buyer. Theoretically, what can be the maximum loss on this position?
196
206
0
49
Current Price of XYZ Stock is Rs 286. Rs. 260 strike call is quoted at Rs 45. What is the Intrinsic Value?
19
26
45
0
Which is the ratio of change in option premium for the unit change in interest rates?
Vega
Rho
Theta
Gamma
If you sell a put option with strike of Rs 245 at a premium of Rs.40, how much is the maximum gain that you may have on expiry of this position?
285
40
0
205
If an investor buys a call option with lower strike price and sells another call option with higher strike price, both on the same underlying share and same expiration date, the strategy is called ___________.
Bullish spread
Bearish spread
Butterfly spread
Calendar spread
Mark-to-market margins are collected ___________.
On a weekly basis
Every 2 days
Every 3 days
On a daily basis
A calendar spread contract in index futures attracts ___________
Same margin as sum of two independent legs of futures contract
Lower margin than sum of two independent legs of futures contract
Higher margin than sum of two independent legs of futures contract
No margin need to be paid for calendar spread positions
A put option gives the buyer a right to sell how much of the underlying to the writer of the option?
Any quantity
Only the specified quantity (lot size of the option contract)
The specified quantity or less than the specified quantity
The specified quantity or more than the specified quantity
