**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 ****Lesson**** 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

**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 richideas100@gmail.com**

** **

Sir , want knowledge of options . I have no knowledge in option and futures. Can u conduct classes by zoom app.

ReplyDeleteJust Learn each post here, Will arrange session if required but make sure you have study all post related to Options here. Will see if required.

DeleteThank you very much Sir

ReplyDelete