Option Wizard® Quiz

12 Questions
Option Wizard® Quiz

Test your options knowledge.

Please wait...
Questions and Answers
  • 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.