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Home>Courses>What is Trading?>Lesson 7 of 8

Options basics

Contracts giving the right, not the obligation, to buy or sell at a set price.

What is Trading?·Lesson 7 of 8

All lessons

By the end of this lesson you'll be able to:

  • 01Define calls and puts
  • 02Explain premium and strike price
  • 03Compare the risk of buying vs selling options
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is Options Trading? Calls, Puts & Mechanics Explained
Key terms
Call OptionPut OptionStrike PriceOption Premium

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What does an option give the holder?

  2. Question 02

    What does a call option give the right to do?

  3. Question 03

    What does a put option give the right to do?

  4. Question 04

    What is the price paid to buy an option called?

  5. Question 05

    What is the strike price?

  6. Question 06

    What is the maximum loss when buying an option?

  7. Question 07

    You expect a stock to rise sharply. What is a basic bullish options play?

  8. Question 08

    Why do options lose value as expiry approaches?

  9. Question 09

    What can selling (writing) options 'naked' expose you to?

  10. Question 10

    When implied volatility rises, what do option premiums tend to do?

Answered 0 of 10 · pass 70% (7/10) to complete

What is Trading?7 of 8
  1. Trading, explained
  2. How the stock market works
  3. How stocks actually work
  4. Intro to forex
  5. Futures basics
  6. CFDs and derivatives
  7. →Options basics
  8. Bull and bear markets
  9. ⚑Final Assessment· 20 Q