单选题
Passage 2
Once you own an option, there are three methods that can be used to make a profit or avoid loss : exercise it, offset it with another option, or let it expire worthless. By exercising an option you have purchased, you are choosing to take delivery of (call) or to sell (put) the underlying asset at the option's strike price. Only option buyers have the choice to exercise an option. Option sellers, on the other hand, may experience having an option assigned to an option holder and subsequently exercised.
Offsetting is a method of reversing the original transaction to exit the trade. If you bought a call, you have to sell the call with the same strike price and expiration. If you sold a call, you have to buy a call with the same strike price and expiration. If you bought a put, you have to sell a put with the same strike price and expiration. If you sold a put you have to buy a put with the same strike price and expiration. If you do not offset your position, then you have not officially exited the trade.
If an option has not been offset or exercised by expiration, the option expires worthless. If you originally sold an option, then you want it to expire worthless because then you get to keep the credit you received from the option premium. Since an option seller wants an option to expire worthless, the passage of time is an option seller's friend and an option buyer's enemy. If you bought an option, the premium is nonrefundable even if you let the option expire worthless. As an option gets closer to expiration, it decreases in value.
It is important to note that most options traded on U.S. exchanges are American style options. In essence, they differ from European options in one main way. American style options can be exercised at any time up until expiration. In contrast, European style options can be exercised only on the day they expire. All the options of one type (put or call) which have the same underlying security are called a class of options. For example, all the calls on IBM constitute an option class. All the options that are in one class and have the same strike price are called an option series.
单选题 You can choose the following methods to exit an option position except to ______.
【正确答案】 B
【答案解析】文章第一段提到there are three methods…or let it expire worthless．退出期权交易的方式有三种，分别为执行期权、对冲交易或不执行期权，使其到期。
单选题 ______ have the option to exercise the option.
【正确答案】 B
【答案解析】文章第一段提到Only option buyers have the choice to exercise an option．只有期权的买方可以选择以何种方式处理期权合约，即只有买方愿意执行期权时，卖方才能执行期权。
单选题 If you are a put seller, you have to ______ in order to offset the original deal.
【正确答案】 C
【答案解析】如果卖出看跌期权，相应的对冲交易则为买入相同执行价格、相同到期日的看跌期权。
单选题 As an option comes to be closer to expiration date, it ______.
【正确答案】 B
【答案解析】期权越接近到期日，其价值就越低。
单选题 ______ can be exercised only on the day when they expire.
【正确答案】 B
【答案解析】欧式期权只有在到期日当天可以被执行，而美式期权则不同，可以在到期日前任何一个营业日执行。