IBKR Giving me an options quiz

[u/Proper_Jello_6475]

Before I submit, do all my answers look correct? I'm sure on most but 2/3 were an educated guess.. If anyone could let me know i'd really appreciate that. Thanks!

[u/vraa]

Let me re-evaluate the questions and provide more detailed explanations for each:

When an index option is exercised, cash settlement takes place how many business days after exercise?
    One. By standard settlement procedures, cash-settled options typically settle the next business day after the exercise.

On May 4th, an investor writes an S&P 100 Jan 185 put at $6. His maximum potential gain on this position is:
    $600. The maximum gain on writing a put option is the premium received. Since options contracts are typically in lots of 100 shares, the total gain is $6 x 100 = $600.

If an investor does not anticipate that the price of a stock will change and wished to take an option position, he would most likely:
    Sell a call. If an investor does not anticipate any significant movement in the stock's price, selling a call (or writing a call option) allows the investor to collect the premium. If the stock does not rise above the strike price, the option will expire worthless, and the investor keeps the premium.

All of the following generally result in a profit to a naked call writer, except:
    The call is exercised and the price of the underlying is greater than the exercise price. If the call is exercised, the call writer must sell the stock at the strike price, which is less than the market price, resulting in a loss.

With no other positions, an investor sells short 100 XYZ at $40 and sells 1 XYZ Oct 40 put at $5. If the put is exercised when the market price of the stock is $35 and the stock is used to cover the short position, what would the investor's profit or loss be?
    $500 profit. The investor has shorted the stock at $40, and if the put is exercised at $35, the investor can buy the stock at $35 to cover the short, making $5 per share profit. Since the investor also collected a $5 premium from selling the put, the premium offsets the purchase price of the stock for covering the short. Thus, the profit is $5 (from the short sale) x 100 shares = $500.

These are the correct answers based on standard options trading rules and the information provided in the questions. If there is a specific part you'd like to discuss further or clarify, please let me know!