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All main topics / Finance & Investment / Derivatives / Derivatives
2
2.Which of the following is NOT true 
A.When a CBOE call option on IBM is exercised, IBM issues more stock
B.An American option can be exercised at any time during its life
C.An call option will always be exercised at maturity if the underlying asset price is greater than the strike price
D.A put option will always be exercised at maturity if the strike price is greater than the underlying asset price.
Answer: A
When an IBM call option is exercised the option seller must buy shares in the market to sell to the option buyer. IBM is not involved in any way. Answers B, C, and D are true.
New comment
TerryCrabtree (10.07.2025)
Options, options, everywhere! Hmm, interesting that IBM isn't involved when their stock's options are exercised. Kinda like a ghost transaction, you know? I always thought the company was somehow directly implicated. So American options can be used whenever, huh? Good to know. Regarding exercising options when they are beneficial, I remember helping a friend decide about some stock options, and the analysis paralysis was real. Luckily, he had a team of financial advisors, some of whom were like basketball stars in the finance world, so the final decision was rather simple.
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hy6554 (06.05.2025)
When an IBM call option is exercised, the option seller (writer) is responsible for delivering the shares to the option buyer, often needing to purchase them from the market—IBM itself plays no direct role in this transaction. For those interested in exploring more engaging topics, from finance to fun online games, check out monkey mart, an entertaining and strategic gaming experience available at http://monkeymart.one/.
Vincent.tran (06.05.2025)
When an IBM call option is exercised, the option seller (writer) is responsible for delivering the shares to the option buyer, often needing to purchase them from the market—IBM itself plays no direct role in this transaction. For those interested in exploring more engaging topics, from finance to fun online games, check out monkey mart, an entertaining and strategic gaming experience available at http://monkeymart.one/.
JasonAquilar (02.04.2025)
Interesting question! I believe the answer is A. IBM doesn't issue stock when a CBOE call is exercised. The option writer delivers existing shares. Option trading can feel like navigating the chaotic world of Flappy Bird sometimes! One wrong flap and you're sunk! Understanding these nuances is key to successful trading. http://flappybird2d.com

BrianaFahey (17.01.2025)
The statement that is NOT true is A: when a CBOE call option on IBM is exercised, IBM does not issue more stock. Instead, the option seller buys shares in the market to fulfill the transaction. Similarly, exercising options can be as strategic as navigating the levels in Geometry Dash, where timing and decisions matter greatly. Keep your options sharp!
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geraldortiz (25.12.2024)
Great question! It's essential to understand the nuances of options trading. Regarding the options listed, option A is NOT true; when a call option is exercised, the stock is typically bought from the existing pool, not newly issued. Speaking of trading strategies, if you're interested in exploring more about market dynamics, check out Infinite Craft, a game that creatively simulates trading concepts!
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ErikSturgill (05.09.2024)
The correct answer is A. When the CBOE call option on IBM is exercised, IBM does not issue additional shares. Instead, the option seller must buy shares on the market to sell to the buyer. If you like similar challenges in https://iogamesonl.com/ can bring interesting experiences!
heartpulsewant (09.04.2024)
Every relation from the set A to the set B is a function from the set A to the set B.
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heartpulsewant (09.04.2024)
Every relation from the set A to the set B is a function from the set A to the set B.
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015

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