Monday, September 1, 2014

Series 7 Crash Course

Students with an upcoming test date for the series 7 will look to take a crash course or class. These classes in actual classroom locations are getting more scarce as most training companies offer online classes or virtual crash courses.

Students studying for the Series 7 in larger cities like New York or LA may find actual locations, but most find it easier to use a web based or video course online. A "crash course" should only be taken if you are already pre-studying with updated and quality training material. These include books and testing software. These are available through American Investment Training. AIT also provides other helpful links and an investment Glossary.

A typical class will cover near 40 hours worth of material. These can normally be paused or viewed as you have the time. The best part about an online setting is you can time it as close to your actual test date.

Available Crash Courses Online

Series 7 with teacher instruction

You can view sample content and a full monthly schedule for upcoming classes. Easier for note taking and retention as you can't "pause" an actual person :) Price also is less than having to drive to a live course.

Best of luck on passing the Series 7. Know where the exam focuses on and be strong in those areas.

More Help Blogs: Understanding Bond Yields - Corporate Bonds Blog

Thursday, August 7, 2014

Options Practice Questions - Exam Help and Tips

Stock with Options Practice Questions - For Series 7 exam or other educational tests.

Some more sample option contract examples and how to look at them correctly:

Short 100 Shares of JKO at $65 and is long (buys) 1 OCT 70 JKO Call for $200

First TIP Help is ALWAYS focus on the stock. The option is only there for one of 2 reasons. For income - which this is not because the option was bought or PROTECTION - and that is the case HERE. A call gives the investor the right to buy the stock at 70. That does not effect the main strategy or focus which is the stock position. Stock positions will have more money invested than an option premium in most cases. So whether the stock is bought or shorted - there is $6500 on the line here, or at least there would be without the protection hedge.

Hedging and protection

The maximum loss WITHOUT the call option here would have been unlimited. Selling stock short is extremely risky if left uncovered. You are obligated to buy back or "cover" the short sale and that price is unknown and when the investor buys back the stock is not known. The option is a like a stop loss order but a little better. Better because unlike a stop loss order, an option is only used if YOU choose to. Problem with the call contract is the cost (premium) which will hit your profit potential. If the option were not there, the maximum gain WOULD BE $6500, since the stock could go to Zero. But because the option cost $200, The maximum gain is $6300

How to figure Break Even

Break even on stock with options together is always cost. Cost spent or net cost received. In this case, the net cost received is $6300, so the break-even is 63

The "add on calls and subtract on puts" break even rules with single options does not apply here. FOCUS ON THE STOCK!

Back to the MAXIMUM LOSS. Since we know that would have been unlimited if the stock was shorted naked without a hedge, the maximum loss here is the difference between the short sale of $6500 and where the stock can be bought back (70), which is $500 plus the premium of $200 = $700 THAT IS THE ONLY WAY TO LOOK AT THESE POSITIONS FOR THE SERIES 7 - SERIES 4 or other exam.

Stock positions are the main play. Options are for hedging - Getting income to lower breakeven or protection. You can only protect when you buy the option. Selling is for income.

Try not to memorize these things. Look to make sense out of them. You have enough to memorize (formulas, rules etc.). Options should not be one of them.

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Thursday, July 24, 2014

Options for Series 7 Exam - Stock and Options: Writing Calls

One of the areas in the options section of the Series 7 test are strategies involving Long Stock positions with writing or selling call options. This is called Writing Covered Calls

Options themselves are risky, but writing calls on the same stock that is owned is considered the most conservative of options strategies. So, if you are taking the Series 7 exam, Series 4 or other FINRA test that will ask options questions, try to be mindful that if you own the stock on the call you are writing, your risk on the option side will be low. But if the stock falls to the floor, the option is not going to help you much, except the premium you got.

Reason for Selling or shorting calls with stock

Income is the #1 reason. Income from the premium received, since you are selling the option. You anticipate the stock to be relatively stable or perhaps rise a little or even go down some. The premium on the call offers you a lower breakeven on the stock position because of the premium received.

Example: Buy 100 shares of TRS at $50 and Write 1 TRS Feb 55 Call for $300.

No one can read an investor or traders mind exactly, but on the Series 7 Test, you will be asked what the maximum gain, loss, breakeven and a scenario "stock rises to X and the call is exercised or stock falls and the call expires etc.

It all comes down to common sense and assuming you know what the obligation is when you sell or write Options. when you write a call option, you receive money (premium), but you are obligated to deliver (sell) 100 shares of the stock at the strike price. If you own the stock, the loss liability is limited. In the example above, you already own the stock - and at a lower price than the strike price. You have some profit risk because if the stock rises to 70 or something crazy, the call will most certainly be exercised, and you will be forced to sell at 55. Any situation where the stock rises and the call is exercised, you will have realized your maximum gain. In ANY case THE MAXIMUM GAIN IS: $500 on the stock (difference from share price and strike price and $300 (premium received) = $800

Break even on Covered Calls

Series 7 option questions or if you are a novice options trader, Break-even on covered calls with stock is always COST. Price of stock less premium received. BREAKEVEN HERE IS: 47 Always focus on the stock when figuring out losses, gains and break even You need to answer these questions differently than if they were single contracts where you are taught to add the premium to the strike price on calls. THE STOCK IS THE BIG PICTURE ALWAYS. The option is there for income.

Maximum loss on Stock and selling calls

When options are sold or written, they are for income and to lower break-even. They are not there to protect the stock declining beyond the break-even. If you owned this position, you are good to 47, but any lower than 47 - it's ALL exposed. So the maximum loss is the same as the breakeven - in real dollars = $4700

Good luck on the Series 7 or any exam you are studying for.

Any questions or comments, feel free to leave. Spam or links to unrelated content will not be published, so don't waste your time :)

Nick Hunter

American Investment Training

Pro Forex Master

Before the age of computing power, the professionals used to analyze every single chart to search for chart patterns. This kind of analysis was very time consuming, but it was worth it. Now it's time to use powerful dedicated computers that will do the job for you: NEWBIES HAVE EARNED 3-4 TIMES THEIR MONEY FIRST MONTH

The 3 Week Diet

Monday, July 14, 2014

Stockbroker Recruiters - Free Series 7 leads, Any brokers to find lists or hire, own BROKERJOBS.COM

Firms and managers looking to hire or find stockbroker producers, licensed Series 7 brokers can do it all for themselves with one online asset

find mortgage brokers, insurance agents, real estate, forex. All recruiting needs. No more buying lists or looking for email lists of licensed brokers

GET YOUR OWN LEADS - Site is SELLING AND AUCTIONED CHEAP. We are looking to move it and will not last.

FREE BROKER LEAD LIST - email leads for free when you own the site or charge for them if the stockbroker or other leads are not being used by you.

Perfect for headhunters and recruiters. Free broker leads flowing in to a generic name site and you make the placements!

The uses are ENDLESS

WWW.BROKERJOBS.COM - And it's for sale - Owned by American Investment Training. This is a DOMAIN NAME. This website can be owned by YOU and capture any broker type lead you want or need. Broker Jobs .com is a fantastic name. The site can jump right to your company page or it can be used for online recruiting with a form to recruit Brokers of all types.

AIT is looking to sell this domain to a headhunter, firm or anyone looking to buy leads, find leads, trainees, Licensed Producers.

- we are stepping out of the recruiting side vs. the FINRA and other broker training portion of our business.

This is an asset that can bring all types of brokers to you and again YOU own it. You host wherever you want and put any content that you want.

Some Ideas to recruit brokers - Series 7, mortgage brokers, investment, stockbrokers and more.

Go to WWW.BROKERJOBS.COM - Link on bottom right will take you to offering page - We are negotiable! Valued over $10,000 and we think THAT is cheap. It is available online right now for more than 2/3 off that and we will accept offers.

BROKER JOBS .com is not a name that will last! -

Think of the hook and advertising

American Investment Training is a FINRA licensing school for stockbrokers, insurance agents and brokers, real estate, mortgage and more. We used to recruit for our firms but we consider it a conflict now. So, we need an entity who is looking to:

Use Headhunter Recruiters for Series 7 stockbrokers

Buy Mortgage Broker Leads (now this helps with that or you don't need to do that ANYMORE. THIS IS A BRAND.

No more stockbroker lists to buy

OWN BROKER JOBS DOT COM - Or make an offer. 1 broker pays for it and you own it forever! (if you want and choose to register it long term). Aged domain (which is good search engine wise) - Over 12 years

Any stockbroker recruiters, people looking to buy mortgage broker lists, Real estate, forex.



Thank You

American Investment Training

Contact Nick at aitbroker at gmail dot com if you have any questions or wish to make a private offer.

Saturday, June 28, 2014

Series 7 Options Help - Stocks with Put option positions. How to figure gains and losses for exam.

Options are a decent size portions of the Series 7 exam. They come in various combinations and set ups on the Series 7. These include Options alone, spreads (buying and selling one type), straddles (using call and puts) and Stock Positions with Options.

This post focuses on Stock with Put Options Together and how to quickly figure out gains, losses and break even points for the series 7 exam. You will ACE Options if you look at with common sense. Not with memorization graphs.

What you have to remember is whenever you see options with a stock position, whether that stock position is Long Or Short - the option is used for only 1 of 2 things. Protection or Income. It is never the main focus of the strategy. So, when you are looking at the strategy and trying see where the maximum gains and maximum losses could come from, think of where your money is tied up.

If you owned 100 shares of TRW Stock at $86, you have $8600 invested. Now, if on the Series 7 exam you see a position like this and a Buy 1 TRW 80 Put for $300 with it, it's important to see what is going on. When you own stock, you want it to go up. A put option is the right to sell the stock at the strike price (80). If the put was purchased alone, without a long stock position on the same stock, then you would want the stock to go down. Your maximum gain is based on the stock decreasing. HOWEVER, if it is owned with a long stock position, the Put is their only for protection.

In the Example:

Buy 100 Shares TRW at $86 and Buys 1 TRW 80 Put for $300

FOCUS ON THE STOCK when looking at gains, losses and Breakeven.

The put does not get in the way of your stock gain. Focus on the stock means you always want stock you have bought to go up. The option, whether it is a call or put is there for income or protection. In this case the Put was bought, so obviously this is not for income. It is for protection of the stock going down.

For this reason The maximum gain is always unlimited when you own stock and own a put. A premium was paid, so that will come off the gain, but the gain is still UNLIMITED. The stock could go to $100, $200....

Maximum Loss - The put is there to protect the stock - that is IT. Best case scenario is the stock goes through the roof and the put expires, but without the put, the stock could fall to 0. The put allows the stock to be sold at 80, regardless of how low the stock goes. It works as a stop-loss order. Only, the option is not "triggered" automatically like a stop order. The Investor must exercise the option and the put option as a cost. In this case $300. So, The maximum loss for this stock and put position is the point loss difference in the stock at 86 and the guaranteed sell price of 80, which is $600 plus the $300 premium paid. Answer: $900.

Break even point with stock and options is VERY simple for the Series 7 exam. It is total cost spent. Stock position and premium paid or received. Stock cost was 86 - premium was 3, so BREAKEVEN IS 89 You start making money at 90. Watch for that trick question. The break even and profit point are NOT THE SAME.

I hope that helped with your understanding of stock and put options for gains, losses and break even. Feel free to add or comment. I will hopefully get to another post on calls with stock and short positions. PASS THE SERIES 7 EXAM!

Nick Hunter American Investment Training Live Virtual Series 7 Classes

Tuesday, April 15, 2014

Options Help Series 7 - Bullish and Bearish Spreads, how to tell FAST

On the Series 7 exam, you will have several questions on spreads, within the options section of the test. Many of these are those annoying roman numeral questions with 2 correct choices, so you need to get them both right. Usually on spreads, you will need to know if a spread is bullish or bearish and whether it is a credit or debit spread. This post will focus on the bull - bear side of the equation.

THIS IS NOT EXPLAINING WHAT OPTIONS ARE etc. You need to have a basic understanding of options contracts for proper understanding of these TIPS.


First you need to understand some basic things:

You are bullish when your POSITION is profitable when the market goes up. Not that all calls are bullish or all puts are bearish. That is not correct. You are bearish when your POSITION is profitable when market declines.

Ex: Own stock = bullish Short stock = bearish

With options, there are 4 single positions and if you know what each position profits from, you will NEVER get the bullish - bearish questions wrong on the Series 7 or whatever exam you are taking ( Series 4, Series 62, Series 24 )

Here is where you lock into each situation and it is the ONLY thing you need to know or memorize and there are no exceptions: - Don't read to much into it. Just know THIS!

Buy (long) call is ALWAYS BULLISH Sell (short) call is ALWAYS BEARISH Buy (long) put is ALWAYS BEARISH Sell (short) put is ALWAYS BULLISH

No matter what the spread situation and combination, each contract position holds to the above philosophy.

Option spreads are the buying and selling of the same "type" (calls or puts) of option. So calls and puts do not mix in a spread. If you see a call position and a put position in the same strategy, IT IS NOT A SPREAD. There are CALL SPREADS and PUT SPREADS. That's it.

The last factor is the premium attached to each contract. The final pathway to getting Bull/Bear right is to remember that the higher premium side of the market dominates. You do not have to determine whether it is a debit or credit spread to answer the bullish bearish part right on the test. Nor does the market price matter!

Ok, so how can we tell if a call spread or a put spread is bullish or bearish FAST! Because we want fast and easy. The Series 7 is a long test and we want the options questions to be "dunks". So let's look at the positions and show you how to tell quick.


BUY 1 RFG NOV 80 CALL for $300>
SELL 1 RFG NOV 90 CALL for $100

* Where is the higher premium? On the bullish position (buy call) or the bearish position (short call)? On the long call. Long calls are ALWAYS bullish, so this is a bullish spread. It is also a debit spread because the investor spent more than what he took in.


BUY 1 POD MAY 45 PUT for $900
SELL 1 POD MAY 55 PUT for $1150

* SAME QUESTION - Where is the higher premium? on the bull side or bear side? Remember above where I wrote when you buy a put, you are ALWAYS BEARISH and when you sell a put you are ALWAYS BULLISH Just memorize the 4 sides of calls and puts and you got this. Sell or Short put is BULLISH and the higher premium is on that one, so this is a BULLISH PUT SPREAD. It is also a credit spread because there was a net gain on the strategy with the premiums.

Practice them for a while and it will be no problem and you will cruise through these options on the Series 7 exam or any finra test where options questions are given.

Feedback? Questions? Post here. Good luck!

Nick Hunter
American Investment Training
Series 7 Courses

Thursday, April 10, 2014

Series 7 Sample Questions - Practice Test Examples

The Series 7 is comprised of many topics. The larger concentration of questions are on Bonds, Options, New Issues and Customer Accounts. The following group of questions has Series 7 test examples of the larger areas and other sections. While being strong on Margin Accounts, Analysis and other topics is important, it is vital to be competitive in the bigger sections to pass the exam and get your Series 7 License.

1. Betsy has just opened an options account and enters an order to buy 1 XYZ Oct 70 Call for $300. What is Betsy’s maximum potential gain?

A) $300
B) $6700
C) $7000
D) Unlimited

Correct answer is D: The maximum gain for the Betsy for the purchase of a call option is unlimited. The appreciation of the underlying stock can go up forever. The maximum loss that Betsy can incur is only the premium paid of $300.

2. A customer has a short margin account with a short market value of $22,000, a credit balance of $42,000 and SMA of $500. What is the equity in the account?

A) $500
B) $20,000
C) $20,500
D) $37,000

Correct answer is B: The equity in a short margin account is equal to the credit balance minus the short market value. SMA is not used when computing equity.

3. A customer has a short margin account with a short market value of $22,000, a credit balance of $42,000 and SMA of $500. What is the NYSE minimum equity maintenance on this account?

A) $5500
B) $6000
C) $6600
D) $12,600

Correct answer is C: Minimum equity maintenance on short margin accounts is 30%. NYSE rules state that you must maintain at least 30% equity based on the current short market value. The short market value of $22,000 must be multiplied by 30%. This equals $6600.

4. An investor owns 100 shares of LKI at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the following orders would be the best recommendation?

A) Sell limit order
B) Sell stop-limit order
C) Sell stop order
B) Buy stop order

Correct answer is B: A sell stop-limit order would be the best choice. A sell stop-limit order specifies a price, but will not turn into a market order. This order will only get executed at the price or better. Stop orders, although quicker in execution, will turn into market orders and the customer will not be guaranteed a specific price. Stop-limit orders are risky, in that the order may or may not get executed, but in this situation, it is the best choice.

Online Series 7 FAQ - Exam overview, tips, career, sponsorship and more.

5. Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?

A) 8% maturing 1-15-2016
B) 8% maturing 1-15-2007
C) 4% maturing 1-15-2012
D) 4% maturing 1-15-2007

Correct answer is A: Bonds with the highest coupon rates would be the first to most likely get called. The issuer will look to issue new debt at a lower rate. Since there are two 8% bonds, the one that would most likely get called, would be the issue with the longest maturity. This is because the bond is potentially more expensive with the amount of years it has compared to the shorter one.

6. A customer sells a 6% corporate bond on Tuesday October 4th for regular way settlement. The bond pays interest on July 1st and January 1st. How many days of accrued interest is this customer owed?

A) 98
B) 97
C) 96
D) 57

Correct answer is C: Accrued interest is the interest that is due a seller of a bond since the last day they were paid. Corporate bonds pay on a 30 day month/360 day year. They also settle on the 3rd business day following the trade date (T+3). The trade settles on Friday October 7th. The last pay date was July 1st. The customer is owed 30 days for July, 30 days for August , 30 days for September and 6 days for October. You do not include the settlement date of the 7th.

7. Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?

A) Interpositioning
B) Churning
C) Crossing
D) Money laundering

Correct answer is D: Potential money laundering activities include excessive wiring of money between accounts.

8. Registered Representatives are not allowed to give gifts to customers or other individuals related to the securities business of the representative above:

A) $500
B) $200
C) $100
D) $50

Correct answer is C: The NASD gift limit is $100.

9. A customer sells 100 shares of GHT short at $58 and buys 1 GHT Mar 60 Call @3. What is the customer’s maximum loss?

A) $500
B) $100
C) Unlimited
D) $5500

Correct answer is A: The customer sold short at $58. The call with a strike price of 60, gives this person the right to buy back the stock at $60. If the stock rises, the call can be used to limit the loss to 2 points. The customer can lose $200 on the stock. The customer also paid a $300 premium. Loss potential is $500.

10. A customer owns 200 shares of GHY at $90, and wishes to hedge the position while generating income. What is the best recommendation?

A) Sell calls
B) Sell puts
C) Buy calls
D) Buy puts

Correct answer is A: Selling options will create income. The customer should sell calls. Calls are covered by the underlying stock. If the calls were exercised, the stock would be delivered to meet the obligation. The income also reduces the break-even of the stock.

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Series 7 Online Course Training