Stocks

What are the essential components of the WiseTraders method?

What is the most typical WiseTraders entry rule?

What type of instruments do we trade?

How do we manage our trade?

How does the OVI help us in our trading?

1. It gives us the main direction to focus on
2. It increases our odds of winning
3. It is a contrarian indicator

What are the flag patterns used for?

1. Timing
2. Identify AAA setups
3. Create a trading plan

How do we handle news in our typical WiseTraders trade plan?

In which direction do we trade?

Why do we only trade breakouts?

1. Commit only when the market reveals its direction
2. No breakout, no loss
3. Win big and lose small
4. So we can trade intraday

How can you achieve windfall profits?

What is technical analysis?

What is fundamental analysis?

What are the main groups of chart patterns?

1. Continuation
2. Reversal
3. Number sequences

Which of the following shows a continuation pattern?

Which of the following shows a reversal pattern?

What could constitute resistance?

What could constitute support

Which of the following is a basing pattern?

What should we do when a stock approaches its resistance during a consolidation?

In what direction should we trade flag patterns?

What is a basing pattern?

What should the OVI reading be if we are looking to enter when the stock breaks out towards the upside?

What market trend does a bowl pattern typically signify?

What is a flag pattern?

The dominant trend for a bull flag is:

The dominant trend for a bear flag is:

Which of the following falls under the “consolidation” pattern family?

1. Flags
2. Pennants
3. Wedges
4. Triangles

How do we play the breakouts?

Which of the following is the most attractive FlagTrader setup?

Which of the following forms the cup and handle pattern?

Which of the following statements are true?

1. Pattern 1 is called the OVI Pullback Reversal
2. Pattern 2 is called a bull flag
3. Pattern 3 is called a cup and handle
4. Pattern 1 is called a bear flag

Which of the following forms a bullish volume pattern?

1. Increasing Volume and decreasing prices
2. Decreasing Volume and decreasing prices
3. Increasing Volume and increasing prices
4. Decreasing Volume and increasing prices

Which of the following forms a bearish volume pattern?

1. Increasing volume and decreasing prices
2. Decreasing volume and decreasing prices
3. Increasing volume and increasing prices
4. Decreasing volume and increasing prices

How do we prefer volume to behave during a consolidation?

What does a low volume reading indicate?

When does a volume spike typically occur?

Which of the following constitutes a volume pocket in the context of an uptrend?

What is the OVI trading plan when we see a volume pocket?

What is the following chart pattern called?

What does the neck-line on a head and shoulders chart pattern indicate?

How do some traders use the head and shoulders chart pattern to project stock price movements?

What market trend does a reverse head and shoulders pattern signify?

What does a double top potentially signify?

What does a double bottom potentially signify?

Which of the following numbers is the closest to forming a double bottom?

What forms an uptrend?

In analyzing a price chart, high or increasing volume most likely indicates which of the following?

What does a reversal pattern signify?

What does a continuation pattern signify?

How many times in a year do companies in the US report earnings?

What does the company’s earnings reports typically consist of?

What affects the public sentiment towards a particular stock?

Which three main indices should we look at to gauge the broader market sentiment?

If you are in a position prior to a stock’s earnings announcement, which of the following course of actions can you take to protect your positions?

1. Close all your positions
2. Take partial profit and move your initial stop up to breakeven
3. Speculate and hold your entire position over earnings

Which of the following are news events that we should be aware of?

1. FOMC and employment figures
2. PPI/CPI
3. Retail sales and housing stats
4. Earnings

What are the FOMC meetings about?

When are the employment figures reported?

What are the three main ways to analyze stocks?

As WiseTraders, which type of analysis do we mainly use to analyze stocks?

What does the OVI do?

In addition to select elements of technical analysis, what do we as WiseTraders use to improve our winning probabilities?

What is the OVI?

What logic should a sound trading system be based on?

How do the big players speed up their position building in a stock that they want to own?

1. Buy the company’s stock in bulk
2. Buy options in the company’s stock
3. Use margin
4. Announce their trading activity on CNBC

Which of the following three components make up the OVI?

1. Option Volume
2. Open Interest
3. Implied Volatility
4. Leverage Multiple
5. News

What does a negative OVI reading indicate?

What does a positive OVI reading indicate?

What does a positive OVI reading indicate?

What makes the OVI different from other technical indicators like MACD, Stochastics, RSI, Fibonacci etc?

How do we use the OVI to reduce risk in trading?

What does a persistent positive OVI reading indicate?

How should we use the OVI in our chart analysis?

When is the OVI “unreadable”?

What does an “unreadable” OVI indicate?

Which of the following charts has the most “unreadable” OVI?

What is a long call option?

What is a long put option?

When do traders typically buy a call option?

When do traders typically buy a put option?

What are some of the advantages of trading options?

1. Reduce or eliminate risk
2. Leverage
3. Generate income
4. Profit from volatility

AAPL is currently trading at $190 per share.  Amy, a stock trader at XYZ Corp is bullish on AAPL and thinks that the price of AAPL is going to increase in the next 6 months.

She decides to buy a 6-month 180-strike call option on it.

A week later, AAPL stock increases to $200 per share. Which of the following course of action would Amy most likely take to make the most profit?

1. Exercise the call option
2. Close her long position in the 180-strike call
3. Roll over her call options
4. Sell a 1-week 300-strike put option on AAPL

MA is currently trading at $260 per share.  Louis, a stock trader at ABC Corp is bullish on MA.

He thinks that the price of MA is going to stay the same or decrease in the next 6 months.

He decides to sell a 6-month 270-strike call option on it.

Two months later, MA stock increases to $300 per share.

As a call option seller, what will Louise be required to do if the call options buyer exercises their call options?

Which of the following scenarios are most advantageous to a call option buyer?

Which of the following scenarios are most disadvantageous to a put option buyer?

What does the option strike price mean?

Which of the following represents an in-the-money call option?

Which of the following represents an at-the-money call option?

Which of the following represents an call option?

Which of the following represents an in-the-money put option?

Which of the following represents an at-the-money put option?

Which of the following represents an out-of-the-money put option?

Which of the following options typically offer the highest liquidity?

Which of the following strike prices typically have the largest concentration of options trading activity?

Which of the following is true about slightly out-of-the-money options?

Why do slightly out-of-the-money options generally have higher volume and open interest?

How many shares does a standard single US option contract represent?

A 3-month 170-strike put option on Visa has a premium of $15.00. How much will you be required to pay for one contract?

What is the option’s open interest?

What does a higher option open interest typically signify?

What is the option volume?

Which of the following statements can be true?

1. Options contracts can have zero volume but high open interest
2. Options contracts can have high volume but zero open interest
3. The options volume will always equal their open interest
4. The options volume will always be larger than their open interest

What is the put/call ratio?

Why is the put/call ratio ineffective in determining market sentiment?

What is implied volatility?

MSFT is currently trading at $135 per share.  How much is the intrinsic value for a 120-strike call option on MSFT?

NFLX is currently trading at $310 per share. A $320-strike put option on NFLX is priced at $20. What is the time value on the 320-strike NFLX put option?

Implied volatility can affect an option’s:

What does a high implied volatility indicate?

What does a low implied volatility indicate?

How could you crudely describe the OVI Sentiment Indicator?

In what way can we use the OVI Sentiment indicator?

What does a fully green OVI Sentiment Indicator typically signify?

How can we trade the OVI Sentiment Indicator as index?

1. Focus on going long when it is fully green
2. Focus on going short when it is fully red
3. Focus on reversals when it is fully red

What is the OVI typically used for?

1. Determine the direction for a breakout
2. Trend trading
3. Fundamental analysis
4. Long-term investing

How do we optimally use the OVI for guided discretionary trading?

How is the OVI typically used in the automated trading environment?

In its most useful scenario, what is the OVI closely correlated to?

What direction does the OVI typically move in relation to a stock’s dominant trend?

Why is the OVI useful in a temporary sideways market?

Which of the following constitutes the WiseTraders Method?

1. OVI
2. Flag
3. Trading plan
4. Moving averages

Flags that fail to break out are called:

The formation of an ideal bull flag is as follows: