Options Trading

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Q.1 What is Bear Spread in a Futures and Options Trading Market?
In Futures and Options Trading Market, Bear Spread refers to selling the nearby contract month and buying the deferred contract to profit from a change in the price relationship.
Q.2 Who is the 'Holder' in Futures and Options Trading Market?
In Futures and Options Trading Market, Holder refers to the party who purchased an option.
Q.3 What is a 'Cash Contract' in a Futures And Options Trading Market?
In Futures and Options Trading Market, Cash Contract refers to the sales agreement for either immediate or future delivery of the actual product.
Q.4 Describe the types of membership in Derivatives Market.
Various types of Membership in derivatives market are - 1. Trading Member (TM) - Member of the derivatives exchange and can trade on his own behalf and on behalf of his clients. 2. Clearing Member (CM) - Members are permitted to settle their own trades as well as the trades of the other non-clearing members known as Trading Members who have agreed to settle the trades through them. 3. Self-clearing Member (SCM) - Those clearing members who can clear and settle their own trades only.
Q.5 What is Federal Fund in a Futures And Options Trading Market?
In Futures and Options Trading Market, Federal Fund refers to the fund that member bank deposits at the Federal Reserve; such that these funds are loaned by member banks to other member banks.
Q.6 In futures and options trading market who is holder?
The party who purchased an option, is the holder in the Futures and Options Trading Market. When a futures position or a short options on futures Position is opened Initial Performance Bond The funds required. Sometimes referred to as Initial Margin.
Q.7 What is option premium in futures and options trading market?
It is the price of an option-the sum of money that the option buyer pays and the option seller receives for the rights granted by the option.
Q.8 What are the differences between se01, se09 and se10?
To determine which particular cash debt instrument is most profitable to deliver against a futures contract, cheapest to Deliver in Futures and Options Trading Market is a method.
Q.9 How many types of tables exist and what are they in data dictionary?
COM Membership in Futures and Options Trading Market is a Chicago Board of Trade membership that permits an individual to trade contracts listed in the commodity options market category.
Q.10 What is cash contract in a futures and options trading market?
It is a sales agreement for either immediate or future delivery of the actual product.
Q.11 What is horizontal spread in futures and options trading market?
It is the purchase of either a call or put option and the simultaneously a sale of the same type of option with typically the same strike price but with a different expiration month.
Q.12 State the price limit in futures and options trading market?
In Futures and Options Trading Market price Limit is the maximum advance or decline-from the previous day's settlement-permitted for a contract in one trading session by the rules of the exchange.
Q.13 In futures and options trading market, what is reciprocal of European terms?
It is one method of quoting exchange rates, which measured the U.S. dollar value of one foreign currency unit; i.e., U.S. dollars per foreign units.
Q.14 In the derivatives market, what are the various types of membership?
Following are the various types of membership in the derivatives market are as follows:
Trading Member (TM) - A TM is a member of the derivatives exchange and can trade on his own behalf and on behalf of his clients.
Clearing Member (CM) -These members are permitted to settle their own trades as well as the trades of the other non-clearing members known as Trading Members who have agreed upon setting the trades through them.
Self-clearing Member (SCM) - A SCM are those clearing members who can clear and settle their own trades only.
Q.15 What is pulpit in futures and options trading market?
it is a raised structure in the center of, or adjacent to, the pit or ring at a futures exchange where market reporters, employed by the exchange, record price changes as they occur in the trading pit.
Q.16 Give the put option in futures and options trading market?
Put Option in Futures and Options Trading Market is an option giving the option buyer the right but not the obligation to sell or "go short" the underlying futures contracts at the strike price on or before the expiration date.
Q.17 In futures and options trading market what is federal fund?
Federal Fund in Futures and Options Trading Market is the fund that member bank deposits at the Federal Reserve; these funds are loaned by member banks to other member banks.
Q.18 What is in-the-money option in futures and options trading market?
It is an option having intrinsic value. A call option is in money if its strike price is below the current price of the underlying futures contract, While, a put option is in the money if its strike price is above the current price of the underlying futures contract.
Q.19 What is loan program in futures and options trading market?
It is A federal program in which the government lends money at preannounced rates to farmers and allows them to use the crops they plant for the upcoming crop year as collateral. Default on these loans is the primary method by which stock of agricultural commodities are acquired by the Government.
Q.20 Explain the functioning of a three-way catalytic converter?
Conversion Factor in Futures and Options Trading Market is a factor used to equate the price of T-bond and T-note futures contracts with the various cash T-bonds and T-notes eligible for delivery. This is based on the relationship of the cash-instrument coupon to the required 6 percent deliverable grade of a futures contract as well as taking into account the cash instrument's maturity or call.
Q.21 What is deferred (delivery) month in futures and options trading market?
As distinguished from the nearby (delivery) month, it is the more distant month(s) in which futures trading takes place.
Q.22 What is performance bond call program in futures and options trading market?
Because of adverse price movement performance Bond Call in Futures and Options Trading Market is a demand for additional funds.
Q.23 Explain standard tables in sap internal tables?
In Futures and Options Trading Market Wire House is an individual or organization that solicits or accepts orders to buy or sell futures contracts or options on futures and accepts money or other assets from customers to support such orders.
Q.24 What is forward (cash) contract in futures and options trading market?
It is a cash contract in which a seller agrees to deliver a specific cash commodity to a buyer sometime in the future. Forward contracts, in contrast to futures contracts, are privately negotiated and non-standardized.
Q.25 In futures and options trading market what is futures contract?
In Futures and Options Trading Market futures Contract is a legally binding agreement, made on the trading floor of a futures exchange, to buy or sell a commodity or financial instrument sometime in the future. These are standardized according to the quality, quantity, and delivery time and location for each commodity. On an exchange trading floor, the only variable which is discovered is the Price.
Q.26 What defines a covered call position?
The purchase of a share of stock with a simultaneous sale of a call on that stock.
Q.27 Which is a protective put strategy?
A long put plus a long position in the underlying asset.
Q.28 What is the aim of performing risk analysis?
To best obtain collateral and security for the credit
Q.29 Are options riskier than stocks?
Options have the unfair reputation of being considered riskier than other investments, Whereas stocks are considered as moderate-risk investments.
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