Advanced Options Course

Question 1 of 30

1. Question

1. Advanced option strategies can involve multiple option contracts with different strike prices.

True
False

Question 2 of 30

2. Question

A straddle is considered a bullish option strategy

True
False

Question 3 of 30

3. Question

Which of the following is an example of a straddle?

a. Buy AMD $50 June 15 call Buy AMD $50 June 15 put
b. Buy AMD $50 June 15 call Buy AMD $45 June 15 call
c. Buy AMD $50 June 15 call Sell AMD $50 June 15 put
d. Buy AMD $50 June 15 call Sell AMD $45 June 15 put

Question 4 of 30

4. Question

4. A straddle carries limited risk and limited potential profit.

True
False

Question 5 of 30

5. Question

“Net Debit” is best defined as the following:

The total amount received for placing an option trade.
The difference between two strike prices.
The total amount paid to place an option trade.
d. The breakeven price of an option trade.

Question 6 of 30

6. Question

The Net Debit on a straddle can also help you calculate what the expected trading range is for a stock.

True
False

Question 7 of 30

7. Question

A strangle involves buying a call and put option with the same expiration and same strike prices.

True
False

Question 8 of 30

8. Question

Which of the following is an example of a strangle?

a. Buy AMD $50 June 15 call Buy AMD $50 June 15 put
b. Buy AMD $50 June 15 call Sell AMD $50 June 15 call
c. Buy AMD $55 June 15 call Sell AMD $45 June 15 call
d. Buy AMD $55 June 15 call Buy AMD $45 June 15 put.

Question 9 of 30

9. Question

9. When would be the best time for a trader to place a strangle?

a. When they are bullish on a stock and expect a large move higher.
b. When they are bearish on a stock and expect a large move lower.
c. When they are neutral on a stock and expect a large move in either direction.
d. When they are neutral on a stock and expect sideways price action.

Question 10 of 30

10. Question

A debit spread involves buying an option with a low premium while simultaneously selling an option with a higher premium.

True
False

Question 11 of 30

11. Question

When would be the best time for a trader to place a debit call spread?

a. When they are bullish on a stock and expect a large move higher.
b. When they are bearish on a stock and expect a large move lower.
c. When they are neutral on a stock and expect a large move in either direction.
d. When they are neutral on a stock and expect sideways price action.

Question 12 of 30

12. Question

Which of the following is an example of a bull call spread?

a. Buy AMD $60 May call Sell AMD $50 May call
b. Buy AMD $55 May call Sell AMD $55 May put
c. Buy AMD $50 May call Sell AMD $60 May call
d. Buy AMD $55 May put Sell AMD $55 May call

Question 13 of 30

13. Question

13. The following equation is used to calculate which value as it pertains to a bull call spread?
(Premium Paid to Buy Call Option) – (Premium Received from Selling Call Option) = ?

a. Net Debit
b. Max Profit
c. Breakeven Point 1
d. Breakeven Point 2

Question 14 of 30

14. Question

A debit put spread is a neutral sentiment trade.

True
False

Question 15 of 30

15. Question

Which of the following is an example of a bear put spread?

a. Buy AMD $40 May call Sell AMD $35 May call
b. Buy AMD $35 May call Sell AMD $40 May put
c. Buy AMD $40 May call Sell AMD $40 May put
d. Buy AMD $40 May put Sell AMD $35 May put

Question 16 of 30

16. Question

How do you calculate the max profit potential of a bear put spread?

a. [(Strike of Option Bought) – (Strike of Option Sold)] – Net Debit
b. [(Strike of Option Bought) + (Strike of Option Sold)] – Net Debit
c. [(Strike of Option Bought) – (Strike of Option Sold)] + Net Debit
d. [(Strike of Option Bought) + (Strike of Option Sold)] + Net Debit

Question 17 of 30

17. Question

Credit spreads are the opposite of debit spreads.

True
False

Question 18 of 30

18. Question

“Net Credit” is best defined as:

a. The total amount paid to place an option trade.
b. The total amount received from placing an option trade.
c. The breakeven price of an option trade.
d. The max loss of an option trade.

Question 19 of 30

19. Question

What is another name for a credit put spread?

a. Bull call spread
b. Bear call spread
c. Bear put spread
d. Bull put spread

Question 20 of 30

20. Question

Which of the following is an example of a credit put spread?

a. Sell AAPL $285 May put Buy AAPL $275 May put
b. Buy AAPL $285 May put Sell AAPL $275 May put
c. Sell AAPL $285 May call Buy AAPL $275 May call
d. Buy AAPL $285 May call Sell AAPL $275 May call

Question 21 of 30

21. Question

The most a trader can make on a bear call spread is the net credit received from executing the trade.

True
False

Question 22 of 30

22. Question

A credit call spread is considered which type of strategy?

a. Bullish
b. Bearish
c. Neutral

Question 23 of 30

23. Question

The breakeven price of a bear call spread is calculated (Strike of Call Option Sold) + (Net Credit).

True
False

Question 24 of 30

24. Question

When would be the best time for a trader to place an iron condor?

a. When they are bullish on a stock and expect a large move higher.
b. When they are bearish on a stock and expect a large move lower.
c. When they are neutral on a stock and expect a large move in either direction.
d. When they are neutral on a stock and expect sideways price action.

Question 25 of 30

25. Question

Max loss occurs for an iron condor when the underlying stock makes a large price change and closes either above both call strikes or below both put strikes.

True
False

Question 26 of 30

26. Question

The width of the credit spreads for an iron condor can vary greatly.

True
False

Question 27 of 30

27. Question

How would the following iron condor trade be presented?
Sell SPY $280 May call
Buy SPY $285 May call
Sell SPY $275 May put
Buy SPY $270 May put

a. SPY May 285/280/275/270 iron condor
b. SPY May 270/275/280/285 iron condor
c. SPY May 270/280/275/285 iron condor
d. SPY May 285/275/280/270 iron condor

Question 28 of 30

28. Question

A long condor with calls involves buying call and put option at different strike prices.

True
False

Question 29 of 30

29. Question

The following equation is used to calculate which value of a long condor with calls?
(Width of Spreads) – Net Debit = ?

a. Breakeven Price 1
b. Breakeven Price 2
c. Max loss
d. Max profit

Question 30 of 30

30. Question

A short condor with puts profits from sideways price action.

True
False