Series 42 Options Rep Exam

The series 42 exam consists of 50 multiple choice questions. each person taking this licensing test has 90 minutes to complete the exam. 70% is the required passing grade.

The Series 42 exam carries a prerequisite licensing requirement. Each person must have taken, passed and currently hold a Series 62 or Series 72 License.

Topics of the Exam Covered Include:

• Option Contract Understanding - Call Options, Put Options and the strategies with a full understanding of the risks involved for all options trading

• Option Contract Components - Strike Price, Expiration Months, Options Clearing Corp Settlements and Rules (OCC)

• Trading Markets and it’s effect on Option Premiums and marketability

• Proper Customer Trading Transactions

• Trade Volume Recognition and Advertisements

• New Options Customer Procedures and Risk Disclosure Documents

• Equity and Debt Options Trading - Position Limits, Understanding Call and Put Option Risks

• Maintaining Customers Records - Trading Transactions, Retaining and Record Keeping

• Understanding Trade and Settlement Dates, and Handling Customer Confirmations

  
  

Visit FINRA For the complete Series 42 Exam Outline

SPECIAL COURSES: Forex and Binary Options Trading

Series 42 Also covers:

Understand the consequences of failure to comply with industry regulations

Understand the effect of signing a pre-dispute arbitration clause

Understand matters subject to arbitration

Understand the difference between arbitration and mediation processes

Also the assignment of exercise notices including

Effect of assignment on ex-dividend date of equities

OCC assignment procedure

Acceptable procedures for allocating customer assignments

Allocation methods

Delivery and payment /settlement date