Test your knowledge of Basic DeFi Options Strategies!

Strategy Exam

A strategy where an investor sells a put option while simultaneously short selling the corresponding amount of the underlying asset, aiming to profit from a decrease in the asset's price.

A strategy where an investor simultaneously buys and sells two put options with different strike prices.

A strategy where an investor buys a fully collateralized put option.

Which description matches that of a covered put?

Which strategy involves simultaneously buying and selling an option (call or put) on the same underlying asset with different strike prices?

When the trader is planning on taking time off from the markets.

When the trader anticipates significant volatility but is unsure of the direction.

When the trader expects prices to stagnate.

When would a trader want to employ a straddle?

A long put is profitable in the event of prices stagnating.

If the underlying asset's price falls below the strike price, the trader can exercise the option and realize a profit from the price difference (subtracting the premium paid and any transaction costs).

When the underlying asset price rises significantly in a short amount of time.

When does a trader profit from a long put?

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Exam: Basic Options Strategies

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