F&O Basics Quiz

This futures and options (F&O) basics quiz is a fixed multiple-choice check on futures, options, premium, margin and settlement. Its answer key includes an outdated Nifty lot-size answer and simplified margin and open-interest explanations. Read the corrections below before treating an answer as a current market rule. The quiz score measures agreement with that stored key; it does not establish readiness to trade.

What you can do in the quiz

The quiz contains 12 questions. Select an answer to see the stored correct choice and explanation. Use Next to record that response and continue. After the final question, See Results shows your percentage, number correct, level label and pass result. Retake starts the same questions again.

There is no experience-level selector, price input or historical market feed. The questions do not adapt to your trading history. A repeated attempt can help you revisit a concept, but remembering the answer positions is different from being able to explain the underlying contract.

The Core F&O Concepts This Quiz Tests

If you searched for an options quiz or an NSE quiz, these are the ideas that the questions rely on. Read them once, then take the quiz.

Futures and options. A futures contract is an agreement to buy or sell an asset at a set price on a set date. Both sides are committed. An option gives the buyer a right, not a duty, to buy (call) or sell (put) at a fixed strike price. The seller (writer) of the option takes the duty if the buyer uses the right. See futures vs options for a full comparison.

Lot. F&O contracts trade in fixed lots. NSE sets the lot size and revises it from time to time. This site's table, taken from NSE's contract list, shows 65 for Nifty and 30 for Bank Nifty. Always confirm the current figure with the exchange before trading. See what is a lot in F&O.

Premium. The price of an option. It has two parts: intrinsic value (what the option would be worth if exercised now) and time value (the extra amount for the time left and expected movement). An option buyer's most you can lose is the premium paid. An option seller's loss can be much larger than the premium received.

Margin. The money a broker blocks to hold a position. Option buyers pay the premium and no margin. Option sellers and futures traders need margin. Margin is a deposit and not the full value of the contract, which is why losses can be bigger than the margin. Read F&O margin requirements for how the pieces add up.

Expiry. The last day a contract trades. As per this site's expiry rules, NSE contracts expire on Tuesdays since 1 September 2025: Nifty has weekly and monthly expiries, while Bank Nifty, FinNifty and Midcap Nifty have monthly expiries only. BSE contracts expire on Thursdays, with weekly expiry for Sensex only. When a holiday falls on the day, the expiry moves. Check the exchange calendar for the actual date.

Corrections to keep beside the answer key

A question can test a useful idea while its explanation adds an unsupported rule. Separate the selected definition from the extra statement. For example, knowing that open interest counts open contracts does not validate every interpretation attached to a change in that count.

For the Nifty contract details, use Nifty options explained. For collateral and position obligations, the F&O margin guide addresses questions a single percentage cannot answer.

How the score is calculated

The score is correct responses divided by 12, multiplied by 100, then rounded to a whole percentage. The stored pass mark is 70%. These are quiz settings, with no claim that they are an exchange or professional-exam standard.

For an illustrative attempt with 9 correct answers: 9 ÷ 12 × 100 = 75%. That passes the quiz’s 70% threshold. With 8 correct answers, the displayed percentage rounds to 67%, which is below the threshold. The label is produced from the same score; it is not an independent assessment.

Because an answer is marked against the stored key, a correct current contract quantity can still conflict with the expected option in an outdated question. Do not learn a wrong market fact simply to improve the displayed result.

A worked example to explain your reasoning

Consider a fictional Nifty call with strike 25,000, entry premium ₹100 per unit and final settlement index 25,130, meaning the index value used to calculate the expiry payout. Assume a 65-unit lot, matching the cited near-month quantity. These prices are made up for practice.

• Call intrinsic value at expiry: 25,130 − 25,000 = ₹130 per unit.
• Subtract the paid premium: ₹130 − ₹100 = ₹30 per unit of gross profit.
• Multiply by quantity: ₹30 × 65 = ₹1,950 gross profit before costs.

The example demonstrates why an option having intrinsic value at expiry does not by itself establish a profit. The premium paid and quantity still matter. Brokerage and applicable charges must also be deducted; the quiz does not calculate a complete trade bill.

Before expiry, a market premium need not equal intrinsic value. Time remaining and the movement priced into options can affect the quote. Keep an expiry-payoff answer separate from a question about selling the option earlier.

In the Money, At the Money and Out of the Money

Quiz questions often use these three terms. They compare the strike price with the current price of the underlying. A call is in the money (ITM) when the index is above the strike, and out of the money (OTM) when it is below. A put is the other way round. At the money (ATM) means the strike is at or very near the index.

Put Payoff and the Seller's Side

Take a fictional put with strike 25,000 bought at a premium of 80. If the final settlement is 24,870, its intrinsic value is 25,000 - 24,870 = 130 per unit. The buyer's gross profit is 130 - 80 = 50 per unit, or 50 x 65 = Rs 3,250 for a 65-unit lot, before charges.

Now take the seller of the call in the earlier example, who received a premium of 100. With the final settlement at 25,130, the call is worth 130. The seller's result is 100 - 130 = -30 per unit, or -30 x 65 = -Rs 1,950. The buyer's gain and the seller's loss match, which is why a quiz question about 'who profits' needs you to say which side.

A futures example: buy one lot at 25,000 and sell at 25,040. The gross profit is 40 x 65 = Rs 2,600. Futures have no premium, and the gain or loss is the full price move times the lot size.

What open interest can and cannot tell you

CME Group defines open interest as outstanding contracts and counts only one side, even though each contract has a buyer and seller. Trading volume is a different count: contracts traded during a period.

If price and open interest rise, those totals do not identify who initiated each trade, why a position exists, or whether it forms part of a hedge. Treating a shorthand interpretation as proof can turn a definition question into an unjustified market prediction.

Use open interest explained to separate the contract count from the story someone tells about it. A correct definition is more useful than a memorised directional slogan.

Turn mistakes into a short study record

• Name the concept you misunderstood, rather than recording only the question number.
• Write the distinction in your own words: premium versus strike, margin versus exposure, or intrinsic value versus profit.
• For a rule that changes, record the official source and the contract/date it covers.
• Try a new made-up example and check its units and arithmetic.
• Keep factual corrections separate from the quiz’s recorded score.

Passing a short quiz does not test order handling, cash requirements during a loss, execution under stress or your response to a plan deviation. It also does not establish that any strategy will work. Use the result to organise revision, without converting it into a reason to open a position.

Where to Practise Next

• Use the options trading quiz for more option questions.
• Use the risk management quiz for position-sizing and stop-loss questions.
• Work an example in the options profit calculator and compare it with your hand arithmetic.
• Log your own trades by hand in OneTradeJournal and review which concepts caused your mistakes.

A quiz teaches definitions. Your trade log shows how you behave with real money, including stop discipline and plan deviations. The two are different skills, so use the quiz for the first and the journal for the second.

Quiz questions readers ask

Sources

• NSE: current contract quantities (checked 16 October 2026).
• CME Group: outstanding contracts and volume (opened 16 October 2026).
• OCC: long-call premium and payoff (opened 16 October 2026).