Option C ii and iii
We know that protective put is not a volatility strategy but short
butterfly spread and straddle are
NEED HELP!! Which of the following are volatility strategies? Protective put Butterfly spread iii. Straddle A....
When you enter one of the following four positions: (i) long a butterfly call spread, (ii) short a butterfly call spread, (iii) long a butterfly put spread, (iv) short a butterfly put spread, do you expect a credit or debit in your account?
Suppose you expect the volatility is high and is uncertain about the price movement of the underlying, which of the following is your best strategy? A. Long put B. Long butterfly spreads C. Long call D. Long straddle
mich of the following strategy can make profit from underlying price drop? A. Buying a put B. Selling a put C. Protective put D. Bullish spread E. None above 7. Which of the following is the riskiest single-option transaction? A. Writing a call B. Buying a put C. Writing a put D. Buying a call E. Riskiness of the all the strategies above is the same 8. Which of the following combinations have similarly shaped profit/loss diagrams? A. Covered Call...
NEED HELP Which of the following statements is/are true? It is never wise to exercise an American call option on a dividend paying stock before maturity. It is never wise to exercise an American put option on a dividend or a non-dividend paying stock before maturity. A. į only B. ii only C. Both i and ii D. None of the above
Suppose trader Frank is moderately bearish on the market, which trading strategy(or strategies) will you recommend to him? a. Long a butterfly b. Short a butterfly c. Long a put d. Long a bear spread e. Long a call
Which of the following is (are) true: Holding all else the same, the premium of a put option on common stock will INCREASE if: I. the price of the underlying stock goes up. II. the volatility of the underlying stock gets smaller. III. the time to expiration gets shorter (less time). a. None of the above O b. 1,1l and III c. III only O d. I only o e. Il only
11. With respect to put-call parity, a covered call is equivalent to? A. Buying a call B. Selling a put C. Selling a put and invest in risk-free bond D. Selling a put and borrow from risk-free bond E. None above The following information is used for Question 12-15; You want to establish a straddle on Apple. The available call premium is $5 and put premium is $6. Suppose X=$50 for both the call and the put. 12. What is...
You are long and at-the-money straddle on a stock index. Which of the following statements is valid? (a) Your position increases in value if, ceteris paribus, the index rises. (b) Your position increases in value if, ceteris paribus, the index falls. (c) Your position increases in value if, ceteris paribus, the volatility of the index rises. (d) All of the above.
our Section: 1. Which of the following trading strategy prefers the options to be out-of-the-money! A. Selling Put B. Selling Call C. Covered Call D. All above E. None above 2. Which of the following option strategy requires the SAME exercise price of options? A. Bearish spread B. Bullish spread C. Straddle D. All above E. None above 3. An European put option gives its holder the right to : A. buy the underlying asset at the exercise price on...
You anticipate a recession with increased stock volatility and greater negative skewness in stock prices. Which of the following option positions would be most consistent with your view? (a) A straddle. (b) A strip. (c) A strap. (d) A vanilla put.