STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

   If you intend to sit for the Securities Industry Essentials (SIE) Exam, make sure that you are familiar with securities in the Money Market and the Capital Markets. The Money Market means the market for short-term debt securities, such as T Bills, commercial paper, brokered certificates of deposit, and bankers acceptances. In contrast, the Capital Markets designate the markets for long-term debt and equity securities. FINRA publishes a Content Outline for the Securities Industry Essentials (SIE) Exam, and, in Section 2.1 and 2.2, FINRA requires  knowledge of equity securities and debt instruments, such as Treasury securities, other money market instruments, and U.S. government agency securities. Bob Eder in his  Study for the  Securities Industry Essentials (SIE) Exam  devotes Chapter 4 to  Debt Securities in both the Money Market and the Capital Markets, including Treasury Securities, U.S. Agency Securities, Money Market Instruments, Corporate Debt...

Plan on taking the SIE Exam? Watch out for questions dealing with Options, such as what is the maximum profit, maximum loss, and breakeven point on an options position. Consider James, a customer who believes in writing covered calls. Writing covered calls means that James buys or owns 100 XYZ shares at 48, and then writes one call XYZ June 50 for a premium of 6. James has established a position of writing a covered call on XYZ shares. A typical question that you may see is what is the maximum profit on James' position? To answer this question correctly, you need to apply the formula for Writing Covered Calls: Maximum Profit equals the strike price minus the stock cost plus the premium received. Or, 50 minus 48 plus 6. This equals 8 points, or $800, which is the maximum profit on this position. Here's another possible question on Writing Covered Calls. Consider Harriet who purchases 100 ABC shares for 52 1/2, and writes 1 call ABC July 50 for 7. What is the maximum profit on th...