Commsec Options Trading quiz
- Thread starter syd10
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I presume this quiz is designed as part of a certification process before a customer is permitted to trade options. Without knowing the specific questions, I will be unable to furnish answers.
I did notice that commsec do have a number of explanatory materials on the options page of their website.
Were those materials inadequate?
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This should help , really if you cant answer comsec quiz i have to ask why you are going to trade them , nothing too complex tbh
http://www.asx.com.au/education/options-courses.htm
https://www2.commsec.com.au/media/57948/etopds.pdf
Hi, Same for me. This is a test I need to do by CommSec before I can upgrade my options account to enable me to short Puts. I believe I have answered all questions correctly, but the system said my answers are not all correct.
Cheers
Stratsol
Question 1
You hold the following Option position for DEF Limited (DEF):
Short 20 DEF June $38.00 Calls.
The share price of DEF rises from $38 to $39.
Which of the following statements is correct?
X a) The margin required for this position will increase
b) The margin required for this position will decrease
c) The margin required for this position will be the same
d) No margins apply to this position
A, The margin required will increase since it's a short call position, increase in price increases the likehood of the option being execrised before or on expiry date, therefore giving the writer more liability.
Short Call= Obligation to buy stocks at certain price.
===============================================
Question 2
You enter the following Option position for MNO Limited (MNO):
Short 1 MNO June $4.50 Call for 10c (Contract size = 100)
You are exercised on the expiry day in June. The following day, MNO is trading at $4.75.
What is your total profit / loss if you buy the shares at market price to cover your obligation (excluding brokerage and ACH charges)?
a) Break even
X b) $15 loss
c) $250 loss
d) $350 profit
B. Short Call= Obligation to buy at current price and deliver at $4.50
Liability when exercised: (4.75-4.50+0.1)x100= $150 LOSS
0.1 is premium received on writing.
===============================================
Question 3
If additional margin is needed to cover a position, the Participant can:
a) Call you to lodge more stock or cash to cover the obligation
b) Automatically lodge cash or stock on your behalf with the ACH
c) Automatically sell shares you hold to cover the obligation
X d) All of the above
D, based on the folowing
JBWere: You must pay us a margin, or provide alternative collateral acceptable to us, by 1pm on the business day following a call for margin.
CommSec: Automatically lodge cash or stock on your behalf with ASX Clear
CommSec: may use its discretion to close any Options positions if any trades are not settled on time
===============================================
Question 4
All else remaining constant an increase in volatility for the underlying security leads to:
a) Lower option premiums
X b) Higher option premiums
c) Flat option premiums
d) Lower strike prices
B, Premium increases as volatility increases
===============================================
Question 5
What is the total premium paid for the following Option order in the S&P/ASX200 Index (XJO), assuming an Index Multiplier of $10?
Long 1 XJO June 5000 Call @ 100 points
a) $100
X b) $1,000
c) $1,100
d) $2,000
B, One contract, 10x100= $1000, so it's B
===============================================
Question 6
Which of the following strategies would require a margin to be lodged?
X a) Bull Put spread
b) Bull Call spread
c) Bear Put spread
d) All of the above strategies
A, the Bull Call and Bear Put do not require a margin, as the margin is built into the Premium on purchase.
===============================================
Question 7
You hold the following Bull Call spread position in OPQ Limited (OPQ):
Long 5 OPQ August $29.00 Calls @ $3.00
Short 5 OPQ August $31.00 Calls @ $0.50
What is the most likely outcome if you only close (sell) the $29 August Call series? :
a) You will make a profit on the strategy
b) You will make a loss on the strategy
X c) You will now be required to pay a margin
d) You will now no longer be required to pay a margin
C, because it will cause the bull call spread to turn into an uncovered short call.
===============================================
Question 8
Which of the following is not a valid Option strategy?
a) Bull Call spread
X b) Ratio Bear Condor
c) Bull Put spread
d) Straddle
B, Could not find a Ratio Bear Condor. And Bull Call, Bull Put and straddle are valid strategies
===============================================
Question 9
If you are exercised on a Short Call position and don't hold the stock you will be required to:
a) Substitute cash for stock
X b) Purchase the stock immediately after you are notified of the exercise
c) Make arrangements to purchase the stock the following week
d) Do nothing
B, CommSec What is Options assignment? If you are assigned on a Call Option and do not hold the underlying stock, you must purchase the required units no later than 2:00pm Sydney time the following trading day.
=============================================
Question 10
What will happen if you do nothing and your Long Call expires in-the-money?
a) You will receive a cash settlement for the option value at expiry
b) Nothing your option will just expire
X c) Your option will be automatically exercised
d) Your broker will pay your margin for you
C) CommSec Q&A: At close of business on the date of expiry, CommSec will automatically exercise any long Options position that is in the money by 1 cent or more for ...
===============================================
Question 11
What will happen if a stock you have lodged is removed from the eligible security list?
a) Your stock will stay lodged but you won’t be able to lodge more of that stock
X b) You will have to find an alternative collateral to cover your option positions
c) This will have no impact on you
d) Your broker will pay your margin for you
B. Morgans – Exchange Traded Options. ASX Clear may withdraw a security from the list of acceptable collateral and you will be required to submit alternative collateral or cash to cover your margin obligations.
===============================================
Question 12
Please tick the correct pay-off diagram which accurately shows the break-even point, maximum profit and maximum loss for the following Scenario
Company XYZ is trading at $10.00. You sell 1 x $10.00 Call for a premium of 0.05
a) Break-even $10.50, Maximum profit $9.50, Maximum loss 0.50
X b) Break-even $10.50, Maximum profit $0.50, Maximum loss unlimited
c) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
B,
===============================================
Question 13
Please tick the correct pay-off diagram which accurately shows the break-even point, maximum profit and maximum loss for the following Scenario
Company XYZ is trading at $10.00. You sell 1 x $10.00 Put for a premium of 0.05
a) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
b) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
X c) Break-even $9.50, Maximum profit $0.50, Maximum loss 9.50
C,
Thanks for your help!
You hold the following Option position for DEF Limited (DEF):
Short 20 DEF June $38.00 Calls.
The share price of DEF rises from $38 to $39.
Which of the following statements is correct?
X a) The margin required for this position will increase
b) The margin required for this position will decrease
c) The margin required for this position will be the same
d) No margins apply to this position
A, The margin required will increase since it's a short call position, increase in price increases the likehood of the option being execrised before or on expiry date, therefore giving the writer more liability.
Short Call= Obligation to buy stocks at certain price.
===============================================
Question 2
You enter the following Option position for MNO Limited (MNO):
Short 1 MNO June $4.50 Call for 10c (Contract size = 100)
You are exercised on the expiry day in June. The following day, MNO is trading at $4.75.
What is your total profit / loss if you buy the shares at market price to cover your obligation (excluding brokerage and ACH charges)?
a) Break even
X b) $15 loss
c) $250 loss
d) $350 profit
B. Short Call= Obligation to buy at current price and deliver at $4.50
Liability when exercised: (4.75-4.50+0.1)x100= $150 LOSS
0.1 is premium received on writing.
===============================================
Question 3
If additional margin is needed to cover a position, the Participant can:
a) Call you to lodge more stock or cash to cover the obligation
b) Automatically lodge cash or stock on your behalf with the ACH
c) Automatically sell shares you hold to cover the obligation
X d) All of the above
D, based on the folowing
JBWere: You must pay us a margin, or provide alternative collateral acceptable to us, by 1pm on the business day following a call for margin.
CommSec: Automatically lodge cash or stock on your behalf with ASX Clear
CommSec: may use its discretion to close any Options positions if any trades are not settled on time
===============================================
Question 4
All else remaining constant an increase in volatility for the underlying security leads to:
a) Lower option premiums
X b) Higher option premiums
c) Flat option premiums
d) Lower strike prices
B, Premium increases as volatility increases
===============================================
Question 5
What is the total premium paid for the following Option order in the S&P/ASX200 Index (XJO), assuming an Index Multiplier of $10?
Long 1 XJO June 5000 Call @ 100 points
a) $100
X b) $1,000
c) $1,100
d) $2,000
B, One contract, 10x100= $1000, so it's B
===============================================
Question 6
Which of the following strategies would require a margin to be lodged?
X a) Bull Put spread
b) Bull Call spread
c) Bear Put spread
d) All of the above strategies
A, the Bull Call and Bear Put do not require a margin, as the margin is built into the Premium on purchase.
===============================================
Question 7
You hold the following Bull Call spread position in OPQ Limited (OPQ):
Long 5 OPQ August $29.00 Calls @ $3.00
Short 5 OPQ August $31.00 Calls @ $0.50
What is the most likely outcome if you only close (sell) the $29 August Call series? :
a) You will make a profit on the strategy
b) You will make a loss on the strategy
X c) You will now be required to pay a margin
d) You will now no longer be required to pay a margin
C, because it will cause the bull call spread to turn into an uncovered short call.
===============================================
Question 8
Which of the following is not a valid Option strategy?
a) Bull Call spread
X b) Ratio Bear Condor
c) Bull Put spread
d) Straddle
B, Could not find a Ratio Bear Condor. And Bull Call, Bull Put and straddle are valid strategies
===============================================
Question 9
If you are exercised on a Short Call position and don't hold the stock you will be required to:
a) Substitute cash for stock
X b) Purchase the stock immediately after you are notified of the exercise
c) Make arrangements to purchase the stock the following week
d) Do nothing
B, CommSec What is Options assignment? If you are assigned on a Call Option and do not hold the underlying stock, you must purchase the required units no later than 2:00pm Sydney time the following trading day.
=============================================
Question 10
What will happen if you do nothing and your Long Call expires in-the-money?
a) You will receive a cash settlement for the option value at expiry
b) Nothing your option will just expire
X c) Your option will be automatically exercised
d) Your broker will pay your margin for you
C) CommSec Q&A: At close of business on the date of expiry, CommSec will automatically exercise any long Options position that is in the money by 1 cent or more for ...
===============================================
Question 11
What will happen if a stock you have lodged is removed from the eligible security list?
a) Your stock will stay lodged but you won’t be able to lodge more of that stock
X b) You will have to find an alternative collateral to cover your option positions
c) This will have no impact on you
d) Your broker will pay your margin for you
B. Morgans – Exchange Traded Options. ASX Clear may withdraw a security from the list of acceptable collateral and you will be required to submit alternative collateral or cash to cover your margin obligations.
===============================================
Question 12
Please tick the correct pay-off diagram which accurately shows the break-even point, maximum profit and maximum loss for the following Scenario
Company XYZ is trading at $10.00. You sell 1 x $10.00 Call for a premium of 0.05
a) Break-even $10.50, Maximum profit $9.50, Maximum loss 0.50
X b) Break-even $10.50, Maximum profit $0.50, Maximum loss unlimited
c) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
B,
===============================================
Question 13
Please tick the correct pay-off diagram which accurately shows the break-even point, maximum profit and maximum loss for the following Scenario
Company XYZ is trading at $10.00. You sell 1 x $10.00 Put for a premium of 0.05
a) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
b) Break-even $9.50, Maximum profit $9.50, Maximum loss 0.50
X c) Break-even $9.50, Maximum profit $0.50, Maximum loss 9.50
C,
Thanks for your help!
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Hi Stratsol.
It's a pretty easy quiz but I believe Comsec are shelving new accounts for now, have you heard back ?
Scan of Q&A appears OK.
It's a pretty easy quiz but I believe Comsec are shelving new accounts for now, have you heard back ?
Scan of Q&A appears OK.
That's what I say, with covered calls, there are no risk implications involving margin requirement, and there could not be a more simplistic easier way to do options having in mind to bolster a return on currently held underlying stock. They have it all wrong to demand such a high criteria of option trading know how for such a simplistic trade.
