Appendix A
Test Your Knowledge
It is always a good idea to test your trading knowledge and skills. One of the reasons this book has been written is to give you a jump-start. Let’s see how much you have learned. There are 50 questions.
1. A binary option contract provides a fixed payout of:
A. $15
B. $100
C. $50
D. $200
2. A binary option trade cannot be traded before its expiration date.
A. True
B. False
3. If a trader was short a binary contract at a bid of $25, what amount did the trader have to put up in his account?
A. $0
B. $25
C. $75
D. $100
4. During the week a trader went long the binary contract. The bid was $15 and the ask was $20. What did he or she pay for the contract (excluding fees)?
A. They paid $10.
B. They paid $100 – $10. ...
