What is trading psychology characterized as?

Greed, fear and remaining rational in market

What is the WHY of a trade?

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

What is an underlying asset?

Stock or security for options contract

How to properly enter options

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

How do underlying assets affect option premiums?

Higher volatility in the underlying asset leads to higher option premiums

By implementing risk management what can you expect?

To protect capital and maximize returns

How does implied volatility affect options pricing?

Higher implied volatility leads to higher option premiums

What is the WHEN of a trade?

When will I decide to take profit or stop out

How should you correctly position yourself in trades?

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

How to use your mind and not your feelings?

By having discipline and doing what you say.

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

Quiz #2 Flashcards | StudBud