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19 Cards in this Set
- Front
- Back
An RR wishes to place an announcement in the newspaper that simply includes the firms name; the RR name; and the following statement: "For info on investing in options, please call..." In order to place the advertisement who has to approve it?
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approval must be obtained from the firm's designated ROP prior to use. |
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Trading in a stock is suspended. What will occur with the options tied to the security?
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Trading will be halted in options contracts on the suspended stock. |
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A customer buys 1 XMI June 215 Call @ $4 and sells 1 XMI June 195 Call @ $19 when the Major Market Index closed at 210. A profit will be realized when: I. The spread between the premiums narrows II. The index remains at 210 III. The index declines below 210 IV. Both contracts are exercised |
I, III. Credit spreads profit when the spread narrows. |
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An officer is granted options to buy restricted shares of his company's stock. Under Rule 144, the officers holding period in that stock commences when?
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On the day that the options are exercised.
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An accommodation liquidation order is a: market order limit order stop order market if touched order |
limit order |
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If the holder of an OEX option contract decides to exercise, the holder will receive: |
the in the money amount on the contract.
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On the floor of the Chicago Board Options Exchange, duties similar to those performed by the NYSE Specialist are handled by the:
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market maker |
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Buy Write Strategy |
A very safe option strategy when long blue chip stocks and writing covered calls for extra income. |
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5% 10% 15% 20% |
15% |
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Exercise limits on the CBOE are applied over a limit period of:
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5 business days |
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Which of the following individuals CANNOT buy options for his own account? I. Order Book Official II. Specialist/ DMM III. Market Maker IV. Floor Broker |
I, IV.
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The initial premium of an options contract is determined by the: a. Options Clearing Corporation b. Securities and Exchange Commission c. Market value of the underlying stock and length of time of the contract d. Chicago Board Options Exchange |
C. Market value of the underlying stock and length of time of the contract. |
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Initial approval of each discretionary options account, in writing, is performed by the:
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BOM |
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a. capital loss of $400 b. capital gain of $400 c. capital gain of $800 d. C/B of $5400 |
C/B of $5400. If a customer exercises a call, he is buying the stock. His C/B is the purchase price of the stock ($50) plus the premium paid ($4) = $54 C/B per share. No taxable event occurs until the stock is sold.
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Which of the following will affect the VIX option premium? a. Time to expiration b. SPX price level c. SPX volatility d. All of the above |
C. SPX volatility |
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The min equity for an individual customer to open a portfolio margin account is: |
$100,000 |
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Which of the following positions can be taken in a portfolio margin account? I. Equity options II. Index options III. Unlisted derivatives |
All of these can be taken in a portfolio margin account. |
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What is a Contrary Exercise Advice (CEA)?
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A notice that can be used to either: *exercise an expiring option that is out of the money *stop the automatic exercise of an expiring option that is in the money. |
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