Help putting Options into English

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Feb 9, 2011 10:17 pm

Hey all, new here (obviously) and although I have been in the financial industry for about 5 yrs now, I have only been required to have my Series 6/63.  Now due to a new position, the Series 7/65 is required.  I have the materials from STC (Book, Online Practice Tests) and it seems to be going ok so far but I am lacking in options knowledge.  I have the basic stuff down but when it comes to more advanced strategies (straddles and net debit/credit) I just can't seem to get it down pat.  I still have a month to go before my test, but figured I would ask now so I can be prepared as I know options are a HUGE part in this test.  So my question:  Does anyone have a way that they themselves might have used or maybe even know of to put options into lamens terms?  I really appreciate any and all help.  Thanks!

Feb 10, 2011 9:48 am

You should start calling your local EDJ offices and see if any of the newer folks still have their Series 7 materials.  Jones writes their own stuff and they spend a ton of time on options.  Maybe you can get one of them to share it with you.  In my opinion, it's the best stuff in the business.   I'd offer you a copy of mine, but I burned them about 10 years ago. 

Feb 10, 2011 7:03 pm

Yep Jones has the best educational material regarding options, especially seeing that the firm does not itself even use options.

I'm sure Spaceman Spiff has seen the other firms' options educational materials, even though Edward Jones is the only firm he's even been with, and his opinion is well informed.

Feb 10, 2011 7:14 pm

Actually, I have seen quite a few other educational materials for the Series 7.  I spent quite a lot of time with the STC, Dearborn, and Kaplan.  I spent a ton of time looking for websites that said they offered Series 7 study aids.  That was 10+ years ago, so I'm sure they've changed by now.  There was a time when I knew the S7 better than I'd say 99.9% of anyone in the country.   

You should probably know a little more about me before you start slinging mud.  You're outgunned on this one.  And wrong. 

Feb 11, 2011 1:37 pm

Firesolutions has the best options training in my opinion.  Once you get the option chart down it's easy as cake. 

Feb 11, 2011 10:49 pm

Agreed.  A strategy I was told to use was to memorize the option chart,(and other formulas) and write them down as soon as I got into the exam.  When the option questions came, I could refer to something that was put down on paper before exam fatigue increased the chance for errors.  

The best advice I was given for 'the 7' was to take tests until you couldn't see straight. Then take some more....

Put in the time and you'll be fine.

Good luck!

Feb 25, 2011 9:38 am

I don't know if this will help.. but its all I ever wrote down for options:

LC         SC

_________        If it spreads down the line (LC/SC or LP/SP) its a spread.   If it straddles the line (LC/LP, SC/SP) 

LP         SP          Its a Straddle.

Then I Kept my handy Note:

(LC) Call = Can Buy 

(LP) Put = Can Sell 

(SC) Short Call = Must Sell 

(SP) Short Put = Must Buy

Once you know whether its a spread or a straddle... all you really have to do is figure out which strike prices go where.   I just look at each option and ask myself ... what happens if the price goes up?  What happens if it stays the same?  What happens if the price goes down.   If you analyze each one that way you will get your answer.

Not sure if that helped or not.   I have an engineering background so I always preferred to memorize just enough to get by, and then learn how to analyze the question to get my answer.