Option Wizard® Quiz
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Test your options knowledge.
- 1.Directional trading:
- A.
Means you have a forecast and a time frame for ticker ABC to move to point X in Y period of time and take action with either stocks, futures, or options
- B.
Is treated in theory and practice in Option Wizard® Trading Method
- C.
Often, but not always, offers the best rewards.
- D.
All of the above
- 2.The Greeks:
- A.
Are derivatives of an option that tell you more about it's likely movement
- B.
Include delta, gamma, vega, theta, rho
- C.
Are in what pundits call the PIIGS, a group of debt-ridden nations that teeter on the brink of default: Portugal, Italy, Ireland, Greece, Spain
- D.
All of the above
- 3.Option Wizard® (for Excel):
- A.
Can predict the price of an option as the underlying moves out in time
- B.
Can predict the price of an option as volatility goes up or down
- C.
Helps determine entry and exit points
- D.
All of the above
- 4.You can trade options effectively with no knowledge of technical analysis, as some options mentors teach
- A.
True
- B.
False
- 5.Delta neutral trading:
- A.
Means you have no forecast, you just want to make money from options
- B.
Means you expect range-bound trade, and position accordingly.
- C.
Is the best way to go for all times, all seasons
- 6.Delta neutral strategies include:
- A.
Condors
- B.
Butterflies
- C.
Calendars
- D.
Double diagonals
- E.
All of the above
- 7.In options trading, "adjustment" means:
- A.
Bringing your delta to zero by adding puts or calls in any combination
- B.
Closing your position when it hits a pre-defined maximum loss point
- C.
Changing your risk curve according to your re-assessment of the market
- D.
Making money more often than not
- E.
Losing money -- but very rarely.
- 8.The most consistently profitable options strategy has proven to be:
- A.
Butterfly
- B.
Condor
- C.
Iron condor
- D.
Long call debit spread
- E.
Long put debit spread
- F.
Short call credit spread
- G.
Short put credit spread
- H.
There is no single most profitable options strategy.
- 9.According to many, markets trend:
- A.
20% of the time
- B.
All the time, you just have to be able to see it
- C.
About half the time
- 10.For any given time frame, statistically, a one standard deviation move can be expected, what %age of the time?
- A.
50%
- B.
68%
- C.
75%
- 11.When you find an option that has an implied volatility much greater than its historical volatility
- A.
Sell it as fast as you can type the order or tweak your mobile app
- B.
Investigate the cause of the aberration, e.g. news pending, etc. then consider a strategy.
- C.
Buy it, it's high for a good reason, the market knows even if you don't.
- 12.Market mentors:
- A.
Are a waste of time and money, you can learn from a book
- B.
Offer solid training in risk management, timely insights, and sometimes a community of traders to tap into
- C.
Usually give out recommendations that are good to fade.
- D.
Are almost always smarter than their students, in addition to having more experience.
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