The Series 7 exam is the first threshold that new brokers must pass before they can gain a license from the National Association of Securities Dealers to practice their trade. Formally known as the General Securities Representative Exam, it is a tough test by any measure. It requires hours of study time and a mental endurance many of us have never had to test. With hard work, dedication and the right approach, you can pass this exam without undue stress.
S.L.o.B.S. over B.L.i.S.S. You will be asked several questions related to the types of orders and where, in relation to the market, these orders should be placed. In other words, should you place a Buy Limit above the market price or below the market price? Should you place a Sell Stop above or below the market price. S.L.o.B.S. over B.L.i.S.S. means that you place Sell Limits and Buy Stop orders (the SL and BS in S.L.o.B.S.) above the market price AND you place Buy Limits and Sell Stops (the BL and SS in B.L.i.S.S.) below the market price.
Try a few practice questions on this subject to test this trick.
B.u.L.L.S. Option spreads are one of the most difficult subjects to understand on the exam. Several questions are related to knowing whether a particular spread is bullish or bearish. This is an important subject in speaking with your clients, because you want the strategy to match properly whether your client is bullish or bearish.
This trick will help you answer all the questions related to knowing whether a spread is bullish or bearish. B.u.L.L.S. means that you are "bullish" if you are long the lower strike price. Get it? "L"ong the "L"ower "S"trike. Of the two options in your spread, if you own or bought or are long the lower strike price options, you are bullish. It does not matter if it is a put or a call spread. Simply remember, "you are bullish if you are long the lower strike." So ... if you are not long the lower strike price, you are bearish.
Try a few practice problems on this subject to test this trick.
RTFQ. Read the Full Question. There are many ways to write test questions to test whether you are paying attention. Words like "except" at the end of a question make it easy to make a mistake. Read questions carefully and deliberately and do not answer a question assuming that you know the question. Read the Full Question.
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