This is the last quiz in our complete Option Course – Let’s see how well you have learned about Options.
If you pass this quiz, you will be eligible for our ‘20% Discount on Option Trading Fees’. Read more about it here.
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The cryptocurrency options on Deribit use the base currency (for example bitcoin) as collateral. Any profit/loss payments are therefore made in bitcoin.
Imagine you buy a bitcoin put option on Deribit, with a strike price of $14,000, and a premium of 0.08 BTC. If the price of bitcoin is $10,000 when the option expires, what is your profit or loss in bitcoin?
(Hint: The formulas in lecture 6.2 will help.)CorrectIncorrect
You buy another bitcoin put option on Deribit, with a strike price of $9,000, and a premium of 0.15 BTC. If the price of bitcoin is $8,000 when the option expires, what is your profit or loss in bitcoin?CorrectIncorrect
Suppose you sell a bitcoin put option on Deribit, with a strike price of $24,000, and a premium of 0.12 BTC. If the price of bitcoin is $20,000 when the option expires, what is your profit or loss in bitcoin?CorrectIncorrect
Using the same option as in the previous question, calculate the breakeven point to the nearest penny. The strike price is $24,000 and the premium is 0.12 BTC. Remember you’re trying to calculate the point at which the put option position will have made precisely zero bitcoin in profit for both the buyer and seller.
(Hint: The formula in lecture 6.3 will help.)CorrectIncorrect
When measured in dollars, the maximum profit of the buyer of a bitcoin put option is limited to the strike price minus the premium. Similarly, when measured in dollars, the maximum loss of the seller of a bitcoin put option is limited to the strike price minus the premium.
When measured in bitcoin though, what is the maximum profit for the buyer, and maximum loss for the seller limited to?CorrectIncorrect