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Answer: Implied volatility: limited to 25.00% or the average of last twenty trading days
Implied volatility is **not** a contract specification. It is a market-derived estimate used in option pricing and analysis, not a term written into the option contract. By contrast: - **Strike prices** are contract terms. - **Underlying: 100 shares** is standard for an equity option contract. - **Exercise style: American** is a valid contract feature. Therefore, the incorrect choice is **C**.
Author: Manit Arora
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Q-607.2. Robert purchases an equity option on a major trading exchange when the underlying share price is $96.00. Each of the following specifications is a plausible entry in the option contract EXCEPT which is not a contract specification or element?
A
Strike prices of $90.00, $95.00 or $100.00
B
Underlying: 100 shares of the equity security
C
Implied volatility: limited to 25.00% or the average of last twenty trading days
D
Exercise style: American; may be exercised on any business day up to and including on the expiration date
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