Strategy

Trade Management Quiz

By Yojana Mandon · Updated July 2026 · 2 min read · Risk disclaimer

Opening a trade is easy; managing it well is where the edge is. These six questions check that you know how to handle a position once it is live.

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

1. Question 1Rolling an option means…

   Closing the current option and opening a new one at a different strike or expirationExercising it earlyDoubling the sizeLetting it expire

   A roll closes the existing contract and reopens a similar one further out in time or at a new strike.

2. Question 2Many premium sellers close winning credit trades early to…

   Pay more commissionLock in most of the profit and remove remaining riskGuarantee assignmentIncrease theta

   Buying back a short option near max profit takes risk off the table for a small remaining gain.

3. Question 3A key advantage of a defined-risk position when it goes wrong is that…

   Assignment is impossibleIt cannot loseYou already know the maximum loss, so you can wait or close calmlyIt never needs management

   With a capped worst case, you can manage the trade without fear of an unlimited loss.

4. Question 4An undefined-risk position, like a naked short option, demands management because…

   It always expires worthlessIt pays a dividendIt has no thetaLosses can grow without a built-in cap

   Without a long leg to cap it, an adverse move can produce very large losses, so it must be watched and adjusted.

5. Question 5One common way to adjust a threatened credit spread is to…

   Roll the untested side closer or roll the whole spread out in time for a creditExercise immediatelySell the underlying stockDo nothing ever

   Rolling the untested side in or rolling out in time collects more credit to offset the tested side.

6. Question 6A sensible default for a losing defined-risk trade is to…

   Always hold to expirationHave a plan to close it at a preset loss rather than hoping it recoversAdd size to average downIgnore it

   Cutting a loser at a predefined point prevents a manageable loss from becoming the full max loss.

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.