Complex options strategies series 7

Complex Options Strategies Series 7

 

complex options strategies series 7

Series 7 Complex Options Strategies study guide by Tsurrel includes 61 questions covering vocabulary, terms and more. Quizlet flashcards, activities and games help you improve your grades. Start studying Series 7: Complex Options Strategies. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Jun 30,  · Acing Series 7 Options Questions The Series 7 exam, also known as the General Securities Representative Exam (GSRE), is a test all stockbrokers must pass, in order to acquire a license to trade.


Tips for Answering Series 7 Options Questions


Here, we will focus on the considerable number of questions on the Series 7 exam that test the candidates on strategies involving both options contracts and stock positions. Solving "Mixed" Options Strategy Problems The first strategy to use in solving these questions is deceptively simple: Read the questions carefully to determine the customer's primary objective: If the question indicates that a customer needs to protect a stock position, then he or she must buy an options contract for protection.

If the customer complex options strategies series 7 combining options with stock positions to create income, he or she must sell an options contract to complex options strategies series 7 the income. As with the majority of options questions on the Series 7 exam, the scope of the questions is limited to maximum gain, maximum loss and breakeven.

Don't take a chance by trying to keep track of the money flow in your head. The Series 7 exam is complex options strategies series 7 stressful for most people, so just write it down. A special note: In any strategy that combines stock with options, the stock position takes precedence.

This is because options contracts expire - stocks do not. Protecting Stock Positions: Hedging Let's begin with hedging strategies. We will look at long hedges and short hedges, complex options strategies series 7. In each case, the name of the hedge indicates the underlying stock position, complex options strategies series 7.

The options contract is a temporary form of insurance to protect the investor's stock position against adverse movements in the market. If the market in a stock turns down, the investor with the long stock position loses. Remember: If an investor needs to protect a stock position with options, the investor must buy the contract like an insurance contract and pay a premium.

Puts go in-the-money become exercisable when the stock's market price falls below the strike price. The put is an insurance policy for the investor against a drop in the market.

To read more, check out Prices Plunging? Buy A Put! Let's look at few sample questions that illustrate one of the many approaches the exam may take to this subject. For these examples, we'll be changing only the multiple choice options that could be provided for the same question. The investor is confident that the stock is a good long-term investment with additional upside potential but is concerned about a near-term weakness in the overall market that could wipe out his unrealized gains, complex options strategies series 7.

Which of the following strategies would probably be the best recommendation for this customer? Sell calls on the stock B. Buy calls on the stock C. Sell puts on the stock D. Buy puts on the stock Answer: D.

Explanation: This is a basic strategy question. The customer wishes to fix, or set, his selling price for the stock. When he buys puts on the stock, the selling or delivery price for the stock is the strike price of the put until expiration. The long stock position is bullish, so to counter a downward movement, the investor purchases puts. Long puts are bearish. Buy XYZ 50 puts.

 

 

complex options strategies series 7

 

Jun 30,  · Acing Series 7 Options Questions The Series 7 exam, also known as the General Securities Representative Exam (GSRE), is a test all stockbrokers must pass, in order to acquire a license to trade. Series 7 Complex Options Strategies study guide by Tsurrel includes 61 questions covering vocabulary, terms and more. Quizlet flashcards, activities and games help you improve your grades. complex options strategies series 7 Securities Training Corporations Series 7 Examination. The Series 7 exam – the General Securities Representative Qualification Examination (GS) – assesses the competency of an entry-level registered representative to perform his or her job as a .