Wiley Series 9 Exam Review 2015 + Test Bank The General Securities Sales Supervisor Qualification Examination--Option Module

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

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

Order Execution 80

Types of Orders 80

Priority of Option Orders 83

Trade Reporting 83

Option Order Tickets 84

Expiration and Exercise 85

American vs. European Exercise 85

Position and Exercise Limits 86

Stock Splits and Stock Dividends 86

Pretest 89

CHAPTER 5 OPTION TAXATION 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

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