Q1 Ans: C. A contract giving the right to buy or sell an asset Q2 Ans: A. Sell the asset in the future Q3Ans: C. Go down Q4. Ans: B. Premium paid Q5. Ans: B. Forced to buy at strike even if stock drops to zero Q6. Ans: A. Be assigned to buy the stock Q7. Ans: B. Stock’s gain Q8. Ans: B. Be assigned to sell the stock Q9. Ans: A. Collect premium and buy stock cheaper Q10. Ans: A. Stockholders seeking extra yield
Create a list of good companies using FA and TA. Review one or two stock that I don’t mind owning, and place a Sell PUT order at a strike price that is backed by cash I have to pay for the stock in case it get assigned. Had a few successes within the month that I started my first option collecting a low 4-figure premium. Always start small and have patience to build up the cash holding. Cheers!