Wiley FINRA Series 9 Exam Review 2017: The General Securities Sales Supervisor Examination –– Option Module

The go–to guide to acing the Series 9 Exam!

Passing the General Securities Sales Supervisor Exam (Series 9 and 10) qualifies an individual to supervise a firm′s sales activities in corporate, municipal, and option securities; investment company products; variable contracts; and direct participation programs. The exam covers the full range of topics related to options regulation. All candidates must have passed the Series 7 prior to taking the Series 9.

Created by the experts at The Securities Institute of America, Inc., Wiley Series 9 Exam Review 2017 arms you with everything you need to pass this ninety–minute, 55–question test. Designed to help you build and fine–tune your knowledge of all areas covered in the exam and to guarantee that you′re prepared mentally and strategically to take the test, it provides:

Dozens of examples Assorted practice questions for each subject area covered in the exam Priceless test–taking tips and strategies Helpful hints on how to study for the test, manage stress, and stay focused

Wiley Series 9 Exam Review 2017 is your ticket to passing the Series 9 test on the first try with flying colors!

Visit www.efficientlearning.com/finra for more information.

The Securities Institute of America, Inc. helps thousands of securities and insurance professionals build successful careers in the financial services industry every year. Our securities training options include:

Onsite classes Private tutoring Classroom training Interactive online video training classes State–of–the–art exam preparation software Printed textbooks Real–time tracking and reporting for managers and training directors

As a result, you can choose a securities training solution that matches your skill level, learning style, and schedule. Regardless of the format you choose, you can be sure that our securities training courses are relevant, tested, and designed to help you succeed. It is the experience of our instructors and the quality of our materials that make our courses requested by name at some of the largest financial services firms in the world.

To contact The Securities Institute of America, visit us on the web at www.SecuritiesCE.com or call 877–218–1776.

About the Series 9 Exam ix

About This Book xiii

About the Test Bank xv

About the Securities Institute of America xvii

Chapter 1 Option Basics 1

Option Classification 1

Bullish vs. Bearish 2

Possible Outcomes for an Option 3

Exercise Price 4

Characteristics of All Options 4

Managing an Option Position 4

Buying Calls 5

Selling Calls 6

Buying Puts 8

Selling Puts 9

Option Premiums 11

Intrinsic Value and Time Value 13

Pretest 15

Chapter 2 Option Strategies 19

Using Options as a Hedge 19

Long Stock Long Puts/Married Puts 19

Long Stock Short Calls/Covered Calls 21

Short Stock Long Calls 24

Short Stock Short Puts 27

Multiple Option Positions and Strategies 29

Spreads 34

Analyzing Price Spreads 36

Using a T Chart to Evaluate Option Positions 49

Pretest 55

Chapter 3 Index, Interest Rate, and Currency Options 59

Index Options 59

Interest Rate Options 62

Currency Markets 64

Market Volatility Options (VIX) 67

Flex Options 68

Weekly Options 68

Binary Options 69

Mini Options 69

Pretest 71

Chapter 4 The Options Marketplace 75

The Option Clearing Corporation 75

The Options Markets 76

The Chicago Board Option Exchange 77

Opening and Closing Option Prices 79

Fast Markets and Trading Halts 79

Clearly Erroneous Reports 80

Execution Errors 80

Order Execution 81

Types of Orders 81

Priority of Option Orders 84

Trade Reporting 84

Option Order Tickets 85

Expiration and Exercise 85

American vs. European Exercise 86

Position and Exercise Limits 86

Stock Splits and Stock Dividends 87

Pretest 89

Chapter 5 Option Ta xation and Margin Requirements 93

Taxation of Options 93

Option Contract Margin Requirements 95

Pretest 99

Chapter 6 Option Compliance and Account Supervision 103

Duties of the ROSFP 103

Option Account Compliance 104

Outside Accounts for Employees 106

Option Agreements 106

Option Account Supervision 107

Large Option Position Reporting Requirements 108

Customer Confirmations and Account Statements 109

Customer Complaints 110

Communications with the Public 111

FINRA Rule 2210 Communications with the Public 112

Pretest 115

Answer Keys 119

Glossary of Exam Terms 125

Index 191