The 5 Market Situations You Should Avoid Aggressively Trading
Buyouts and Mergers/acquisition
Low Liquidity Low
Implied Volatility
High Implied Volatility
Strong Rallies
Question &
Answer from Lession 4....
1) Recently,
L&T ........ , Mind tree business is Example of
A) Buyouts B) Merger
C) Acquisition D) Strategic Partnership
2) During Result
Season of company, Generally Implied volatility use to seen .....
A) High B) Low
C) Average D) No effect
3) Can we
Considered Low Implied Volatility Market Stable compare to High Implied
Volatility? True/False
4) Can VIX is
considered as benchmark of Implied Volatility ? True/False
5) During
Uncertainty period Implied Volatility goes.....
A) Down B) Up
C) Average D) Range bound
6) Nifty moves
from 10500 to 11400 in 2 months period is considered as .....
A) Movement B) Strong Rallies
C) Range Market D)
Volatile Market
7) Daily
movement of 150-200 point either side in
nifty index considered as.....
A) Down trend B) volatile
trend
C) Uptrend D)
normal trend
8) Is nifty
Implied Volatility is near 17 considered as....
A) Low B) High
9) DABUR
Company posted a robust result and Mr. A plan to enter in option trade stock
trading near 320Rs. CE of 330 is available at 5-9 Rs. Quotation and volume
seems 10 Lots is considered as .....
A) Low risk stock B) Low
Liquidity
C) Low Impact cost D) Normal quote
10) Higher the
Implied Volatility , Lower the risk for option Buyer? True/False
Question from Lesson
5,6 & 7.....
1) Delta
measure the change in Option premium with respect to Underlying Movement..... True/False
2) Delta is
useful parameter for speculator to speculate market Movement? True/False
3) PUT Delta
is positively correlated with underlying movement? True/ False
4) CE Delta
always in range of -1 to 1? True/False
5) ATM PUT
Delta is -0.50. True/False
6) OTM CE
Delta is near to 0 to 0.50? True/False
7) ITM CE
Delta is near 1? True/False
8) Reliance
trading near 1150 and CE of 1150 is 50 Rs. what will be value if Reliance touch
at 1200 Rs. next day?
A) 70 B) 75
C) 65 D)
can't say
9) Sum of
Straddle is more than sum of strangle ? True/False
10) Short
Straddle is Good in narrow range Market? True/False
11) ATM &
OTM CE option doesn't have Intrinsic Value? True/False
12) A long PUT
is good in downtrend Market? True/False
13) During
Uncertain Market PUT premium will increase more than CE Premium? True/False
14) ATM CE and
PE sell, Future 1 lot Sell is considered
A) Spread B) CE-PE strategy
C) Triangle D)
Butterfly
E) Future sell 1 lot
E) Future sell 1 lot
15) on Weekly
nifty option, Mr. X expecting movement of 150 point in either side, suggest
Good strategy?
A) Buy CE and PE 100 point far from ATM
B) sell CE and PE 200 Point Far from ATM around 10 Rs both
c) Long Butterfly
D)Short Butterfly
16) ATM delta on expiry @
3:29 PM is ?
A) 0.50 B) .10
C) 1. D) .45
17) ITM doesn't have intrinsic value it does time value ? True/False
18) Credit spread CE mean.....
A) Buying ATM strike and selling
OTM
B) Selling ATM strike and selling OTM
strike
C) Selling ATM strike and buying OTM
strike
D) Buying ATM strike and buying OTM
strike
19) ITM delta for PUT option is near to
A) 1 B)
above 0.70
C) -1
D) below -0.50
20) Longer the expiration period higher would be premium ? True/False
21)Debit spread in PE option is buying ATM PE and selling OTM
PE? True/false
22) Option premium is sum of intrinsic value plus time value. True/false
23) Determine premium of option using following details .....
Nifty @ 11300, Delta for
PE option 11200 is -0.40 and premium is 80 Rs. Nifty goes down 11100 what will
be option premium for 11200 PE?
A) 160 B) 170
C) 180 D) 190
24) Today on 12th Aug 2019 Reliance AGM held, stock closing is
near 1150 and implied volatility is 35 due to event. Now, co has announced few
restructuring plan and on 13th trader is expecting stock to open 5% up I.e. say
60 Rs. Up but same time implied volatility will reach to 30 and Vega value take
1.5 Rs. for ATM strike I.e. 1200. Now 1150 CE close is 40 Rs. What could be
value on 13th Aug taking delta constant at 0.50 for easy calculation.
A) 80 B) 65.5
C) 57.5 D) 62.5
25) Mr. A want to take risk of Rs. 5000 in reliance before AGM
conclude, he is expecting stock to gap up 5% I.e. 60 Rs. After AGM concludes, Implied
volatility is 35, current rate is 1150. Expected implied volatility falls 8%
after result of AGM. Take Vega 1.5 Rs. Lot size 500. What should Mr. A do? 1150
CE is at 40, 1160 @ 35 1180 @ 25 1200 @ 15 1220 @ 7
A) buy 1200 CE @ 15
B) sell 1220 CE @ 7 with strictly
stop loss of 17
C) Buy 2 lot of 1160 and sell 2 lot
of 1180
D) buy 1150 CE and sell 1160 CE 2 lot
each
26) To determine option premium which is least useful parameter
following
A) option strike B) current price
C) interest rate D) Expiry time
27) If I want to hedge my entire position nifty trading at 11200
and I sold 11200 PE @ 100 Rs. 2 lot what should I do ?
A) buy 4 lot of 11400 PE @ 50
B) sell nifty future @ 11200
C) buy nifty future @ 11200
D) sell 2 lot CE @ 100
28) 2 lot CE buy delta 0.50 future will be Buy or Sell
29) 2 lot ATM PE having delta -0.50, if Mr. A short what
respective hedging in nifty possible ? Sell 1 lot nifty
or buy 1 lot nifty
30) Pay off of put option will be
A) spot minus strike price
B) strike price minus spot
31) Pay off of CE option is
A) strike price minus spot
price
B) future price minus spot
price
C) spot price minus Strike
price
D) none of this
32) Is implied volatility affect option pricing in case it goes
up or down ? Yes or No
33) For
short option position hedging will be positive or negative in underlying ? Like
2 lot PE sold having delta -0.55 and 1 lot nifty future sold, Now nifty goes
100 down what could be hedging effect ? Positive or negative
34) Two credit spread of CE and PE will create strategy name
(assuming ATM strike )
A) spread B) covered CE PE
C) short butterfly D) long butterfly
35) To determine option price one need to consider 5 factor ? True/False
36) OTM
expire option buyer has to pay STT on expiry ? True/False
37) Which is the safe strategy out of
following ?
A) spread B) straddle
C) butterfly D) box strategy
Answer of all Question..... Anyone want analysis of any answer kindly comment here or reach at derivativelearn@gmail.com
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