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25 Cards in this Set

  • Front
  • Back
spread differentials between bid and offer for options. (5) guidelines
<2 $0.25
2-5 0.40
>5-10 0.50
>10-20 0.80
>20 1.00
cabinet transactions handled by who
board broker or the specialist, depends on the exchange
OCC assigns exercise notices by what method?
random selection only
board brokers handle what types of orders?
day limit or stop orders
example of a market letter
technical report on option strategies sent to customers.

(does not include an advertisement in the yellow pages or a letter to a specific customer discussing particular investments)
completed option worksheets must be retained for...
3 years
if a registered rep is suspended by a member firm. must report to?
appropriate SRO
floor broker asks the specialist to top him a 15 (on the purchase of XYZ stock).
guarantee an execution at 15 on the purchase of the stock.

(note: this narrows the spread)
T-note premium.
quoted as 3.30. $ = ?
3.30 = 3 30/32 = 3.9375

3.9375 x 1000 = $3937.50
reports of uncovered short positions are sent to the exchange when?
discretionary order must be approved by a branch manager when?
on the day the order was entered
buy 100 XYZ at 45 on margin
write 40 call at 7
call exercised, rate of return on investment?
buy at 100 x 45 = 4500
receive 700 from call
4500 - 700 = 3800
exercise, sell at 4000
4000 - 3800 = 200 gain
margin = 4500/2 = 2250
minus the call, 2250 - 700 = 1550

200/1550 = 12.9%
acceptable margin deposits from member firms to the OCC,
cash, certified check, US Gov Bonds, letters of credit from a bank or trust company
Rule 144 requires refiling with the SEC if securities have not been sold in ___ amount of time
90 days
advertisement in the yellow pages. need approval from who?
ROP and exchange
blotter prepared how often?
5% stock dividend.
XYZ July 50 call.
adjusted how?
50/1.05 = 47.62

105 shares, strike 47.62
T-note option contracts have position and exercise limits of:
2000 contracts
advantage of put over short stock
smaller capital commitment, lower loss potential, no uptick rule
SMA adjusted due to what
purchase or sale in account
T-Bill exercise settles when?
T-Bill option trades settle when?
exercise results in delivery on Thursday of the following week.

trades settle the next business day
currency option margin req?
CD Sep 75 put
premium 8500
spot rate 0.63
50000 CD per contract
50000 x .63 x .04 = 1260
1260 + 8500 = $9760 margin requirement
customer statements must be kept for the most recent:
6 months in the branch office and office of supervisory jurisdiction
foreign currency options expire when?
Friday preceding the third Wednesday of the month
records of customer complaints.
include what?
identity of customer making complaint.
date the complaint was received.
name of the registered rep involved.
specific action taken regarding complaint.
must keep complaint at the branch where the complaint originated and at the office of supervisory jurisdiction for three years.