Intermediate

Options Risk Management Quiz

By Dennis Bosmans · Updated June 2026 · 2 min read · Risk disclaimer

Surviving long enough to win is mostly about risk. These six questions check that your defaults keep you in the game.

Pick an answer for each question — your score appears at the end.

1. Question 1Position sizing means…

   Buying as much as possibleLimiting how much capital is at risk per tradeUsing maximum marginAvoiding stop-losses

   Sizing controls how much any single trade can cost you.

2. Question 2Defined-risk strategies are attractive because…

   They cannot loseThe maximum loss is known in advanceThey need no capitalThey avoid taxes

   You know the worst case before you enter, which makes sizing easy.

3. Question 3Selling naked options is risky because…

   Premiums are tinyLosses can be very largeThey always expire worthlessThere is no margin

   Uncapped strategies can lose far more than the premium collected.

4. Question 4Diversifying across underlyings helps reduce…

   Time decayConcentration riskCommissionsVolatility itself

   Spreading trades means one name blowing up does less damage.

5. Question 5A common rule is to risk only a small percentage of your account…

   Per yearPer tradePer decadeNever

   Risking just 1–2% per trade keeps a losing streak survivable.

6. Question 6Before selling premium you should be sure you can…

   Avoid all lossesHandle assignment and the worst-case lossPredict the priceSkip margin

   Only sell what you can afford to be assigned on or to lose.

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss. Privacy Policy · Terms & Conditions.