Economics - Derivatives MCQ Test: Economics - Derivatives MCQs - Practice Questions
1. What is the primary purpose of 'Put Options' in risk management?
2. What does the term 'Backwardation' refer to in futures markets?
3. What is the term for an options strategy involving the purchase of one put option and the sale of another with a higher strike price but the same expiration date?
4. What is the term for an options strategy involving the purchase of one call option and the sale of another with a lower strike price but the same expiration date?
5. What is the term for an options strategy involving the sale of a call option and a put option with the same strike price and expiration date?
6. What is the term for an options strategy involving the sale of one call option and the sale of one put option with the same expiration date but different strike prices?
7. What is the term for an options strategy involving the purchase of one call option and the sale of one put option, both with the same expiration date but different strike prices?
8. What is the term for the sensitivity of an option's price to changes in the volatility of the underlying asset?
9. What is the significance of 'Gamma' in options trading?
10. What is the term for the simultaneous purchase and sale of options with different expiration dates but the same strike price?
11. What does the term 'Contango' mean in futures trading?
12. What is the term for an options strategy involving the sale of one call option and the sale of one put option with the same strike price and expiration date, both in-the-money?
13. What is the term for an options strategy involving the purchase of one call option and the sale of one put option with the same strike price and expiration date, both out-of-the-money?
14. What is the term for an options strategy involving the sale of one put option and the purchase of two put options with the same expiration date but different strike prices?
15. What does the term 'Skewness' refer to in the context of options pricing?
16. What does the term 'Theta' refer to in options trading?
17. In futures markets, what is the term for the fee paid by the buyer to the seller for the right to enter into a futures contract?
18. What is the primary function of 'Vega' in options pricing?
19. In futures trading, what is the term for an order that becomes a market order when the futures contract reaches a specified price?
20. What is the term for an options strategy involving the sale of one put option and the purchase of another with a lower strike price but the same expiration date?