ROP Finra Series 4 || with Accurate Answers 100%.
Level 3 options additional disclosure requirement correct answers since Level 3 permits
uncovered writing, the client is subject to maximum risk exposure. As a result, he will receive an
additional document that's referred to as the Special Statement for Uncovered Writers.
Account statements for options customers stay on file for what time period? correct answers
copies of account statements for options customers must be kept at both the branch office that
supervises the account and the principal supervisory office that has jurisdiction over that branch
for the most recent six-month period
VIX options trade what time period? correct answers VIX options trades from 9:30 a.m. to 4:15
p.m. ET (8:30 a.m. to 3:15 p.m. CT). (38850)
Under Reg SHO, a firm's Easy to Borrow (ETB) list must be updated correct answers at least
every 24 hours
A "collar" consists of correct answers A collar consists of a long stock position, the purchase of a
put option with a strike price that's below the current market price of the stock, and the sale of a
call option with a strike price that's above the current market price of the stock. In other words,
both the call and the put options are out-of-the-money when the position is established. The
objective of a collar is to lock in a selling price. If the market price of the stock declines, the put
option is exercised by the investor. Alternatively, if the stock rises above the strike price of the
call, the writer may receive an assignment notice to sell the stock. (38768)
Painting the Tape consists of correct answers Painting the Tape is a technique whereby
individuals acting in concert repeatedly sell a security to one another without actually changing
ownership of the securities. This is intended to give an impression of increased trading volume.
The regulators consider this to be a type of manipulation.
Marking the Close consists of correct answers Entering large trades at the end of the day
specifically to affect the closing price is known as marking the close.
Tender offers are held open for (days) correct answers at least 20 business days from the time
they're announced to the security holders. If the person who makes the offer increases or
decreases the percentage of the class of securities being sought, the consideration being offered,
or the dealer's soliciting fee, the offer must remain open for at least 10 business days from the
date that notice of the change is given to security holders.
When must a branch manager acknowledge a complaint? (days) correct answers Under industry
rules, a member firm must acknowledge receipt of a customer complaint within 15 business days
of receipt. Thereafter, the member must respond to the complaint within a reasonable period.
(39166)
During a firm transfer which firm is responsible for notifying the OCC? correct answers Both
, Information required to be kept in customer's option file (7) correct answers Date which the
ODD was mailed, customer's financial data, dates of verification of the account info in the
options agreement, name of representative who handles the account, name of ROP who approved
the account, date of options approval, types of transactions that the account is approved for.
For representatives who violate rules of an exchange, the exchange may do which of the
following: Fine, censure, suspend, expel? correct answers The exchange has the authority to
expel, fine, suspend, and/or censure a rep who violates its rules
cash account option selling requirement correct answers A call may be written in the cash
account if it's covered by stock or by an escrow receipt from a bank. Spreads must be transacted
in a margin account. A spread may be covered for purposes of margin, but despite the fact that
cash margin may not be required, the spread must still be established in a margin account.
(38804)
Credit value in Margin Account correct answers In a short margin account, the credit balance
represents the amount of the initial short sale plus the amount deposited to satisfy Regulation T.
This amount remains the same despite the fact that the short market value and equity value will
fluctuate.(21482)
Diagonal Spread correct answers If the options have different expirations and different strike
prices, the position is considered a diagonal spread.
Vertical Spread correct answers If the options have the same expiration, but different strike
prices, the position is considered a vertical, price, or dollar spread
Horizontal Spread / Calendar Spread correct answers If the options have different expirations,
but the same strike prices, the position is considered a horizontal, time, or calendar spread
Rule 144 notification to SEC is NOT required when correct answers within 3 month period
allows for the sale of 1% of the outstanding stock or the average volume of trading for the past
four weeks, whichever is higher the sale doesn't exceed 5,000 shares, the dollar amount doesn't
exceed $50,000. (39241)
A combination correct answers a buy and a put of same security, same expiration
Tender offers notification correct answers no later than 10 business days from the date that the
tender offer is made. Along with a notice of the tender offer, the subject company must also
either (a) recommend that shareholders accept or decline the tender offer, (b) express that it has
no opinion and remains neutral, or (c) is unable to take a position on the tender offer. (39240)
Options positions can be transferred EXCEPT (time) correct answers except during the week
prior to expiration of a position in the account.
Straddle VS Combination correct answers If an investor sells a put and a call on the same
underlying stock, and both options have the same expiration date and exercise price, the position
