Series 3: Exercise

Exercise

Answer true or false.

1. _____ An American-style option can be exercised at any time up to and including the closing date.

2. _____ Only an investor who buys a put or call, and not an investor who sells a put or call, is said to be opening a position.

3. _____ Someone who is long a call options contract can close out his position by selling a put on the same underlying product.

4. _____ A naked call option is written by someone who does not own the underlying security or commodity.

5. _____ An investor who has shorted a commodity product and then writes a put on that commodity is said to be writing a naked put.

6. _____ If a call option expires in six months, it can be bought on margin.

7. ____