Options Trading Basics
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Questions and Answers

What is the strike price?

  • The price at which the option can be exercised (correct)
  • The price paid for an option
  • The date on which the option expires
  • The number of shares of the underlying stock that the option represents

    • What is the expiration date?

  • The price at which the option can be exercised
  • The price paid for an option
  • The date on which the option expires (correct)
  • The number of shares of the underlying stock that the option represents

    • What is the size of an option contract?

  • The price at which the option can be exercised
  • The price paid for an option
  • The date on which the option expires
  • The number of shares of the underlying stock that the option represents (correct)

    • Study Notes

    • Options are contracts that give the holder the right, but not the obligation, to buy or sell a stock at a set price on or before a certain date.
    • The strike price is the price at which the option can be exercised.
    • The expiration date is the date on which the option expires.
    • The size of an option contract is equal to the number of shares of the underlying stock that the option represents.
    • The premium is the price paid for an option, which is determined by multiplying the strike price by the number of contracts bought.

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    Description

    Test your knowledge about options trading with this quiz covering important concepts such as strike price, expiration date, contract size, and premium calculation.

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