fyjjNegative Correlation
What Is Negative Correlation?Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa. In statistics, a perfect negative correlation is represented by the value -1.0, while a 0 indicates no correlation, and +1.0 indicates a perfect positive correlation. A perfect negative correlation means the relationship that exists between two variables is exactly opposite all of the time.KEY TAKEAWAYSNegative or inverse correlation...
fyjjPut Option
What Is a Put Option?A put option (or “put”) is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame. This predetermined price at which the buyer of the put option can sell the underlying security is called the strike price. Put options are traded on various underlying assets, including stocks, currencies, bonds, commodities, futures, and indexes. A put op...
fyjjKnow Your Client (KYC)
What Is Know Your Client (KYC)?The Know Your Client or Know Your Customer is a standard in the investment industry that ensures investment advisors know detailed information about their clients' risk tolerance, investment knowledge, and financial position. KYC protects both clients and investment advisors. Clients are protected by having their investment advisor know what investments best suit their personal situations. Investment advisors are protected by knowing what they can and canno...
fyjjNegative Correlation
What Is Negative Correlation?Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa. In statistics, a perfect negative correlation is represented by the value -1.0, while a 0 indicates no correlation, and +1.0 indicates a perfect positive correlation. A perfect negative correlation means the relationship that exists between two variables is exactly opposite all of the time.KEY TAKEAWAYSNegative or inverse correlation...
fyjjPut Option
What Is a Put Option?A put option (or “put”) is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame. This predetermined price at which the buyer of the put option can sell the underlying security is called the strike price. Put options are traded on various underlying assets, including stocks, currencies, bonds, commodities, futures, and indexes. A put op...
fyjjKnow Your Client (KYC)
What Is Know Your Client (KYC)?The Know Your Client or Know Your Customer is a standard in the investment industry that ensures investment advisors know detailed information about their clients' risk tolerance, investment knowledge, and financial position. KYC protects both clients and investment advisors. Clients are protected by having their investment advisor know what investments best suit their personal situations. Investment advisors are protected by knowing what they can and canno...
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The Series 7 exam licenses the holder to sell all types of securities products except commodities and futures. Known formally as the General Securities Representative Qualification Examination, the Series 7 exam and its licensing is administered by the Financial Industry Regulatory Authority (FINRA).1
Stockbrokers in the United States need to pass the Series 7 exam to obtain a license to trade. The Series 7 exam focuses on investment risk, taxation, equity, and debt instruments; packaged securities, options, retirement plans, and interactions with clients for prospective securities industry professionals.2 This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry.1
The purpose of the Series 7 license is to set a level of competency for a registered representative or stockbroker to work in the securities industry. The Series 7 license is an essential requirement for an entry-level broker. The licensing exam covers an extensive range of financial terms and topics as well as securities regulations.1
The Series 7 is an exam and license that entitles the holder to sell all types of securities products except commodities and futures.1
The Series 7 exam covers topics on investment risk, taxation, equity and debt instruments, packaged securities, options, and retirement plans.12
The purpose of the Series 7 license is to establish a level of competency for registered representatives in the securities industry.1
Candidates who pass the Series 7 exam can trade many securities, such as stocks, mutual funds, options, municipal securities, and variable contracts. The Series 7 license does not cover selling real estate or life insurance products.1 In addition to obtaining the Series 7 license, many states require that registered representatives pass the Series 63 exam, also called the Uniform Securities Agent State Law Exam.34
Since Oct. 1, 2018, Series 7 candidates are required to pass the Securities Industry Essentials (SIE) exam as well as the Series 7 exam in order to receive the General Securities registration.15 According to FINRA, the SIE is an introductory-level exam that "assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices." If you need more information on the SIE, FINRA's SIE exam content outline provides more details.6
Candidates who want to take the Series 7 exam must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm. The member firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer Form) for the candidate to be registered for the licensing exam. Non-FINRA members should use the Test Enrollment Services System (TESS) in order to register for the exam.7 FINRA governs the activities of securities firms and registered brokers, ensuring that anyone who sells securities products is qualified and tested.1
Candidates who want to take the Series 7 exam must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm.1
The Series 7 is structured as follows:
Seeks Business for the Broker-Dealer from Customers and Potential Customers: 9 questions
Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: 11 questions
Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records: 91 questions
Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: 14 questions1
The Series 7 exam has 125 multiple choice questions, lasts 225 minutes, and cost $300. The passing score is 72%.1
Prior to Oct. 1, 2018, the Series 7 exam contained 250 questions covering five major job functions.8 The exam duration was six hours, had no prerequisites, and cost $305. A score of 72% was required to pass.
FINRA does not provide candidates with any physical certificate as proof of exam completion. Current or potential employers who wish to view proof of completion must access this information through FINRA's Central Registration Depository (CRD).9
Completion of the Series 7 exam is a prerequisite for many other securities licenses, such as the Series 24, which permits the candidate to supervise and manage broker activities.10
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Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you're ready to enter the real market, you've had the practice you need.
The Series 7 exam licenses the holder to sell all types of securities products except commodities and futures. Known formally as the General Securities Representative Qualification Examination, the Series 7 exam and its licensing is administered by the Financial Industry Regulatory Authority (FINRA).1
Stockbrokers in the United States need to pass the Series 7 exam to obtain a license to trade. The Series 7 exam focuses on investment risk, taxation, equity, and debt instruments; packaged securities, options, retirement plans, and interactions with clients for prospective securities industry professionals.2 This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry.1
The purpose of the Series 7 license is to set a level of competency for a registered representative or stockbroker to work in the securities industry. The Series 7 license is an essential requirement for an entry-level broker. The licensing exam covers an extensive range of financial terms and topics as well as securities regulations.1
The Series 7 is an exam and license that entitles the holder to sell all types of securities products except commodities and futures.1
The Series 7 exam covers topics on investment risk, taxation, equity and debt instruments, packaged securities, options, and retirement plans.12
The purpose of the Series 7 license is to establish a level of competency for registered representatives in the securities industry.1
Candidates who pass the Series 7 exam can trade many securities, such as stocks, mutual funds, options, municipal securities, and variable contracts. The Series 7 license does not cover selling real estate or life insurance products.1 In addition to obtaining the Series 7 license, many states require that registered representatives pass the Series 63 exam, also called the Uniform Securities Agent State Law Exam.34
Since Oct. 1, 2018, Series 7 candidates are required to pass the Securities Industry Essentials (SIE) exam as well as the Series 7 exam in order to receive the General Securities registration.15 According to FINRA, the SIE is an introductory-level exam that "assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices." If you need more information on the SIE, FINRA's SIE exam content outline provides more details.6
Candidates who want to take the Series 7 exam must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm. The member firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer Form) for the candidate to be registered for the licensing exam. Non-FINRA members should use the Test Enrollment Services System (TESS) in order to register for the exam.7 FINRA governs the activities of securities firms and registered brokers, ensuring that anyone who sells securities products is qualified and tested.1
Candidates who want to take the Series 7 exam must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm.1
The Series 7 is structured as follows:
Seeks Business for the Broker-Dealer from Customers and Potential Customers: 9 questions
Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: 11 questions
Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records: 91 questions
Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: 14 questions1
The Series 7 exam has 125 multiple choice questions, lasts 225 minutes, and cost $300. The passing score is 72%.1
Prior to Oct. 1, 2018, the Series 7 exam contained 250 questions covering five major job functions.8 The exam duration was six hours, had no prerequisites, and cost $305. A score of 72% was required to pass.
FINRA does not provide candidates with any physical certificate as proof of exam completion. Current or potential employers who wish to view proof of completion must access this information through FINRA's Central Registration Depository (CRD).9
Completion of the Series 7 exam is a prerequisite for many other securities licenses, such as the Series 24, which permits the candidate to supervise and manage broker activities.10
Compete Risk Free with $100,000 in Virtual Cash
Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you're ready to enter the real market, you've had the practice you need.
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