Example Questions from the Exam Facts 9/10 Book:
What does the term covered
mean?
The position of an options writer
with an offsetting securities position that guarantees the ability to perform
if the option holder exercises the option contract
What does it mean to exercise
an option?
Action taken by the owner of an
option to purchase or sell the underlying asset according to contract terms
What is "expiration
date?"
A specified date on which the
option becomes worthless and the buyer no longer has the rights specified in
the contract
How is the price determined in
LISTED options?
Auction market (bid upon)
How is the price determined in
OTC options?
Negotiated (agreed upon)
What is the Liquidity for OTC
options?
Very limited
