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What is ATM (AT The Money) Options?

ATM are those options having Strike near to Spot Price. Current Price and Underlying is near. Example : NIfty is trading at 16970 Put Option : 17100                    ITM 17000                    ATM 16900                    OTM ATM Option has Delta Value 0.50 why ??? Because Probability of Nifty going up or down from Current Price is 1/2 i.e. 50% Call Option : 17100                     OTM 17000                     ATM 16900                     ITM  For Option video : https://youtu.be/XbwnxRLp7L8 Exercise : Reliance : CMP 2200 Rs PUT Option : 1800 2100 2200 2500 Call Option : 2000 2100 2200 2400 You can Comment here for more updates and Query on any option related Topics.

Derivative Quiz 31 Question from Lesson 1 to 3: Can you Score 70% Marks?


Quick Summery of Lesson 1 to 3 Test Quiz.....

Lesson : 1

Lesson : 2

Lesson : 3

If you haven't Learn above Lesson kindly study it on given above Link and appear test.

Are You Making These 10 Common Options Strategy Mistakes?

Position Size
Low Trade Number
Portfolio Balance
Option Buying Versus Selling
Diversity of Stocks
Using the Stop-Loss Order
No Hurry to Book Positions Early
Total Account Allocation is Too High
Reducing Commissions
Adjusting to Reduced Risk

Question & Answer:

1)  Lesson 1 Explain 10 common  mistake of option strategy?True/ False

2) Position Size period of holding any Asset?True/False

3) Is positional Size is talks more on overall Portfolio?True/ False

4) is there any point which relevant to Low trade with any other point?
A) Portfolio Balance     B) adjusting Risk
C) Reduce commission         D) Book Position

5) Is Stop loss order is common for all trader? or need to take any corrective steps like?
A) Book loss/Profit       B) Create Adverse Position
C) New Position           D)  change Underlying

6) Is any Point talks about holding position to get maximum profit?name it

7) Is option Buying works for long term Strategy?True/False

8) According to you which is Most important point out of 10 common point? why?


In lesson 2 we discuss on 7 answer to know before placing order of option trading deal with .....
Fit my portfolio
Does stock or index have enough Liquidity
Implied volatility analysis
Expiration period
Define strategy
Position size and
Motive of trade

Question & Answer

1) Out of above 7 Points Which is most important point professional trader use to study more..... name point.

2) Is liquidity makes any help in option trader who trade based on opportunity? True/ False

3) Implied volatility moves up option premium use to cheaper?True/ False

4) Implied Volatility goes up premium of option
A) Down             B) Up
C) NO effect       D) Neutral

5) Higher the Implied Volatility Higher Uncertainty?True/False

6) Option Short Straddle is Good when Market is expected to move more?True/False

7) Option Straddle means Selling or Buying ATM call and put?True/False

8) Spread is Useful Strategy in uncertain market?True/False

9) out of following strategy which is satisfy this condition? Buying 2 lot of call option ATM strike and selling one Lot of Future is.....
A) Naked call option            B) Covered Call
C) Short call                       D) Long Call
E) none of this

10) Short Butterfly is Selling 2 ATM call and Buying 1 lot of OTM and 1 Lot of ITM call option? True/False

11) After the Election or RBI Monetary Policy period Implied volatility of option.....
A) Up                        B) Down
C) As IT IS                D) NO Effect

12) Is any one hold 1000 Shares of Reliance in equity want to start trading option which Strategy is useful to him?
A) Naked Short Put                     B) Naked Short Call
C) Short both Call & Put              D) Long Put & Call

13) My Motive is to earn Vega From option Strategy which is Best Strategy .....
A) Buy weekly Option and sell monthly option same Strike
B) Sell weekly Option and Buy Monthly Option same strike
C) Sell Weekly Option and Sell Monthly Option same Strike
D) Buy weekly Option and Buy Monthly Option same strike

14) My Motive is to earn Theta From option Strategy which is Best Strategy .....
A) Buy weekly Option and sell monthly option same Strike
B) Sell weekly Option and Buy Monthly Option same strike
C) Sell Weekly Option and Sell Monthly Option same Strike
D) Buy weekly Option and Buy Monthly Option same strike

15) Election result is On 23th May and weekly Expiry is on 20th May which is useful strategy and Best Strategy .....
A) Buy weekly Option and sell monthly option same Strike
B) Sell weekly Option and Buy Monthly Option same strike
C) Sell Weekly Option and Sell Monthly Option same Strike
D) Buy weekly Option and Buy Monthly Option same strike
16) Longer the Expiry Period cheaper will be option Premium ? True/ False

17) Tick mark Right option here.....
A) Expiry days remain 24 call premium is 15 and Expiry days 20 Call Premium is 16
B) Expiry days 4 call Premium 5 Rs and Expiry Period 10 days Premium 5 for the same Strike Call
C) Higher the Expiration Lower would be Option Premium and Vice verse
D) Cant Determine Any Option Info is Lacking

18) Professional Option Trader Comes Under which Category.....
A) Arbitrager
B) Speculator
C) Hedger
D) Investor

Lesson 3 Talk about Situation where abnormal Volume seen in Options includes 3 main reason .....
Upcoming news/announcement
Hedging Purpose
Idiots got loose in the Market

Question & Answer
1) Reliance is trading near 1160 on 10th Aug. 2019 and Annual General Meeting held on 12th Aug. 2019 Option seen Huge volume due to expectation of Few unknown Announcement like Fibre Plan or Special Dividend etc what should option trader do.....
A) Buy Call option                B) Buy Put Option
C) Sell Put Option                D) Sell ATM Put and Buy OTM put

2) In any company like Sun Pharma Got Inspection in product and agency found few Problem in content of Product final announcement is expected in 1 week what you should do being an option trader? ( Assuming favorable announcement expect stock to Go up 10% and Unfavorable news tend stock to 12-15% down plus Current Straddle is 12% )
A) Sell Call Option
B) Sell put Option
C) Credit Spread of Put option
D) Debit Spread of Call Option
E) Buy call and Put ATM or OTM
F) Sell Call and Put ATM or OTM
G) Nothing due to uncertainty

3) Mr. A is having 10 year Experience of Derivative Trader, He manage Client Position also, Usually he do short Straddle on daily basis 10 lot nifty Call and put, One days suddenly he receive urgent call at 1 PM and cant seat front of computer, even his position is running in loss and it was Friday, he was expecting very limited movement as month was December when FII on holiday, What he should do? ( delta of Call was .48 and Put was .40 ). Lot Size 75. he doesn't want to Square OFF Position.
A)  Buy Put and Call Option More OTM ( Delta of 0.20)
B) Hold Position As it is
C) Do Hedge of 1 Lot Nifty Buy
D) Do Hedge of 1 Lot Nifty Sell

4) Mr.A short 10 Lot of 11000 Put having Delta of 0.40 and sold 4 lot of Nifty future is?
A) Event based Trading
B) Hedger trade
C) View Based Trade
D) None of this

5) On expiry I got sudden Call from advisory firm that SUZLON trading at 4 Rs. On expiry day Itself Target of 7 Rs. as sudden deal will happen,  So buy Strike 6 Rs. Call @ 0.05 Lot Size 80000 Investment is 4000 Only. Should I do? 4 to 7 is almost 75% far. My risk reward Ratio given is 1:20.
who do such trade?
Idiots got loose in the Market
Many times Even Near Strike Call available cheaper than such call given through Advisory company.

Will Quick Learn more Remain 4 to 7 Post review through Test Quiz. IF you Score 70% right Answer You should Focus more on learning Option.

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