By implementing risk management what can you expect?

To protect capital and maximize returns

How should you correctly position yourself in trades?

Start with 1/4th of position and add more when trade works

What is the WHEN of a trade?

When will I decide to take profit or stop out

How does implied volatility affect options pricing?

Higher implied volatility leads to higher option premiums

What is an underlying asset?

Stock or security for options contract

What is the WHY of a trade?

The reason for entering the trade. (TA, News, Etc)

How to properly enter options

Enter into 1-2 trades and focus like a lazer on managing them.

What is trading psychology characterized as?

Greed, fear and remaining rational in market

How to use your mind and not your feelings?

By having discipline and doing what you say.

How do underlying assets affect option premiums?

Higher volatility in the underlying asset leads to higher option premiums

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Quiz #2

15 termsStudBud Administration73 plays

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Questions 15

Answers

1
What is considered a high implied volatility percentage in options trading?
Anything over 80%
Anything over 50%
Anything over 25%
2
By implementing risk management what can you expect?
To protect capital and maximize returns
To eliminate all trading risks
To increase the potential for high returns
To guarantee profits on every trade
3
What are the pros and cons of conservative trading?
High Risk, Low Reward
Low Risk, High Reward
High Risk, High Reward
Low Risk, Low Reward
4
How should you correctly position yourself in trades?
Start with full position and average down
Start with 1/4th of position and add more when trade works
5
What is the WHEN of a trade?
When will I decide to take profit or stop out
When will I make money
When will I retire and get a lambo
When will I eat breakfast
6
How does implied volatility affect options pricing?
Implied volatility has no effect on options pricing
Higher implied volatility leads to higher option premiums
Lower implied volatility leads to higher option premiums
7
What is an underlying asset?
Instrument for options contract, like index or commodity
Broker or advisor for options trades
Asset for option to buy or sell at set price
Stock or security for options contract
8
What is the WHY of a trade?
The expiration date of the option (Contract date)
The potential profit
The reason for entering the trade. (TA, News, Etc)
The strike price of the option
9
How to properly enter options
Enter in a mix of option calls in different stocks
Enter into 1-2 trades and focus like a lazer on managing them.
Enter all your money in a single option
10
What is the most important factor in successful trading?
Risk management
Insider information
Market timing
Luck
11
Whats a good trade size if your account is $1000 as a beginner
2-5% or $20-$50
5-10% or $50-$100
10-20% or $100-$200
20-50% or $200-$500
12
What is trading psychology characterized as?
Ignoring gut instincts
Constantly chasing hot trends in market
Greed, fear and remaining rational in market
Always being emotionally attached to your trades
13
How to use your mind and not your feelings?
By having discipline and doing what you say.
By looking at twitter and basing your trades from there
Reading a article and believing it 100%
14
What are the pros and cons of aggressive trading?
Low Risk, High Reward
High Risk, High Reward
High Risk, Low Reward
Low Risk, Low Reward
15
How do underlying assets affect option premiums?
The underlying asset has no effect on option premiums
Higher volatility in the underlying asset leads to higher option premiums
Lower volatility in the underlying asset leads to higher option premiums
The expiration date of the option determines the premium price

Quiz #2 Flashcards | StudBud