Options And Futures FAQs

  1. What is the difference between options and futures?

  2. What happens when a circuit breaker is put into effect?

  3. What do the S&P, Dow and Nasdaq futures contracts represent?

  4. How do I determine the breakeven point for a short put?

  5. What options strategies are best suited for investing in the retail sector?

  6. What option strategies can I use to earn additional income when investing in the industrial sector?

  7. What is the difference between derivatives and options?

  8. How are rights distributed in a rights offering?

  9. How can I use an out-of-the-money put time spread for downside risk?

  10. What risks should I consider when taking a short put position?

  11. What happens if a software glitch fails to execute the strike price I set?

  12. In what market situations might a short put be a profitable trade?

  13. What is the relationship between implied volatility and the volatility skew?

  14. How is implied volatility for options impacted by a bearish market?

  15. What's the difference between basic shares and fully diluted shares?

  16. How do I set a strike price in an options spread?

  17. How do I set a strike price for a future?

  18. How can I calculate the delta adjusted notional value?

  19. How is the price of a derivative determined?

  20. What expiry months are typically available for derivatives?

  21. What is the difference between derivatives and swaps?

  22. With what kinds of securities does it make the most sense to enter a long position?

  23. What options strategies are best suited for investing in the utilities sector?

  24. Why is tenor important on credit default swaps?

  25. What does the underlying of a derivative refer to?

  26. What kinds of derivatives are types of contingent claims?

  27. What does it mean to take delivery of a derivative contract?

  28. How can derivatives be used for speculation?

  29. How can derivatives be used for risk management?

  30. Why would a company issue a rights offering?

  31. What is the difference between an option-adjusted spread and a Z-spread in reference to mortgage-backed securities (MBS)?

  32. How do I calculate a forward rate in Excel?

  33. What are some common financial instruments involved in speculation?

  34. What is the difference between a currency and interest rate swap?

  35. How do I change my strike price once the trade has been placed already?

  36. When was the first swap agreement and why were swaps created?

  37. Are stop orders only used for stocks?

  38. What is the difference between open interest and volume?

  39. How is the spot price related to a derivative's notional value?

  40. When is an options straddle deep in the money?

  41. What types of options positions create unlimited liability?

  42. How accurate is the forward rate in predicting interest rates?

  43. How does the term 'in the money' describe the moneyness of an option?

  44. What is the difference between in the money and out of the money?

  45. What options strategies are best suited for investing in the banking sector?

  46. How do currency swaps work?

  47. What does negative vega mean for credit spreads?

  48. What's the difference between a credit spread and a debt spread?

  49. When is a put option considered to be "in the money"?

  50. What options strategies are best suited for investing in the aerospace sector?

  51. How do I set a strike price in a put?

  52. What technical skills must one possess to trade options?

  53. Why is the initial value of a forward contract set to zero?

  54. How do I set a strike price for an option?

  55. How risky is a straddle?

  56. Do options make more sense during bull or bear markets?

  57. Does the buyer or the seller control a call option?

  58. Where can I find out about upcoming stock splits?

  59. Where did the terms in-the-money and out-of-the-money come from?

  60. Why does delta only range from 1 to -1?

  61. What is the difference between a covered call and a regular call?

  62. How are forward contracts regulated in the United States?

  63. Under what circumstances should I pursue a straddle?

  64. What is the difference between "right" and "obligation" on a call option?

  65. Why are call and put options considered risky?

  66. Is it more advantageous to purchase a call or put option?

  67. Can warrants be written on any security?

  68. Is there a secondary market for warrants?

  69. What is the CBOE Volatility Index? (VIX)

  70. Where do I go to make an OTC (over-the-counter) transaction?

  71. What is the difference between a short position and a short sale?

  72. What role does intrinsic value play in call options?

  73. What role does intrinsic value play in put options?

  74. Where can I purchase options?

  75. What is the difference between LIBOR, LIBID and LIMEAN?

  76. After exercising a put option, can I still hold my option contract in order to sell it at a lower price?

  77. What are the differences between AMEX and Nasdaq?

  78. A Straddle

  79. What is an alligator spread?

  80. All of these apply to an option exercise notice EXCEPT:

  81. What is the difference between return on equity and return on capital?

  82. How can I use an "airbag swap"?

  83. How do I use a rollercoaster swap?

  84. What does "guns and butter" refer to?

  85. Why do options with the same underlying stock and strike prices trade for different amounts?

  86. How does the ISIN numbering system work?

  87. Why are corporations so concerned about their stock price?

  88. What is a debt/equity swap?

  89. Can an option be exercised on the expiration date?

  90. How do you tell whether an option is American or European style?

  91. How can I find out which stocks also trade as options?

  92. How is a put option exercised?

  93. Do I own a stock as of the trade date or the settlement date?

  94. What is dilutive stock?

  95. Can a stop-loss order be used to protect a short sale transaction?

  96. What do all of the letters in a stock option ticker symbol mean?

  97. Does the seller (the writer) of an option determine the details of the option contract?

  98. I own some stock warrants. How do I exercise them?

  99. I own options on a stock, and it's just announced a split. What happens to my options?

  100. Are we in a bull market or a bear market?

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