Intermediary guarantees an option writer performance

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Reference no: EM131356335

1-A. What intermediary guarantees an option writer’s performance?

a. credit worthiness rating company

b. brokerage

c. good-till-canceled order

d. clearinghouse

e. none of the above

2-B. Suppose you hold a call option. The stock price has recently been increasing-making your call option more valuable. Through what process might you take advantage of the liquid nature of the options market?

a. offsetting order

b. contract reconciliation

c. mark to market order

d. settling up

e. none of the above

3-C. Variation margin is which of the following?

a. margin deposited as a result of marking-to-market

b. the difference in margin between hedger and speculator

c. margin differences according to trading style

d. margin set by the variability of a futures price

e. none of the above

Reference no: EM131356335

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