Preparatory Course Series 4 USA American Broker Examination (FINRA)

BROKER EXAM FOR SERIES 4 USA (PREPARATION COURSE)



The Series 4 exam
— the Registered Options Principal Qualification Exam (OP) — assesses the competency of an entry-level principal to perform their job as a registered options principal.
The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of a registered options principal, including the rules and statutory provisions applicable to the supervisory management of a firm’s options personnel, accounts and trading, as well as exchange rules and regulations applicable to the trading of options contracts.
In addition to the Series 4 exam, candidates must pass the Securities Industry Essentials (SIE) Exam and the General Securities Representative Exam (Series 7) to hold the Registered Options Principal registration. For more information about the Series 4 exam, refer to FINRA Rule 1210 and FINRA Rule 1220(a)(8).
The Series 4 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. The outline is comprised of the six major job functions of an options principal. You can find them in the curriculum section.

Permitted Activities

Covered supervisory activities and products include regulatory compliance over trading, market making, underwriting and advertising of:

  • Equity options
  • Foreign currency options
  • Interest rate options
  • Index options
  • Options on government and mortgage-backed securities


This information is based on https://www.finra.org/registration-exams-ce/qualification-exams/series4

Supervise the Opening of New Options Accounts

1
Review new account documentation for completeness
2
Verify proper disclosures are provided to customers within required timeframe
3
Review customer trading objectives and evaluate risk levels to determine if account approval meets applicable standards
4
Review customer verification and confirm receipt of signed options agreement

Supervise Options Account Activities

1
Review recommendations to determine if strategies meet applicable standards
2
Review margin accounts to confirm proper handling and timely adherence to margin requirements
3
Review risk exposure of customers’ accounts
4
Receive and investigate customer complaints; if necessary, take appropriate corrective actions

Supervise General Options Trading

1
Monitor the general operational process of options trades
2
Review firm and customer options trading for exceptions
3
Oversee the correction of options trade errors
4
Authorize and monitor customer market access

Supervise Options Communications

1
Oversee options telemarketing practices
2
Review options retail communications and determine appropriate approval
3
Review incoming and outgoing options correspondence including approval where required
4
Review institutional communications and determine appropriate approval

Implement Practices and Adhere to Regulatory Requirements

1
Establish and oversee compliance with supervisory control functions
2
Maintain required books and records

Supervise Associated Persons and Personnel Management Activities

1
Verify the qualifications of newly hired associated persons
2
Review and maintain associated persons’ registrations and disclosures
3
Maintain marketplace and associated product and regulatory knowledge
4
Supervise the conduct of associated persons

Rules & Regulations

1
FINRA rules
2
Cboe rules
3
NYSE rules
4
Securities Exchange Act of 1933 and 1934

Basic format of questions in the exam

1
Closed-Stem
2
Open-Stem (Sentence Completion)
3
Except or Not
Candidates must be associated with and sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm to be eligible to take FINRA principal-level qualification exams. For more information on registration requirements, refer to FINRA Rule 1210. The Series 4 has corequisite exam requirements. Candidates must pass the SIE and Series 7 exams to hold the Registered Options Principal registration.


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Enrolled: 35 students
Duration: 100 hours
Lectures: 29
Video: 9 hours
Level: Advanced

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Monday 9:30 am - 6.00 pm
Tuesday 9:30 am - 6.00 pm
Wednesday 9:30 am - 6.00 pm
Thursday 9:30 am - 6.00 pm
Friday 9:30 am - 5.00 pm
Saturday Closed
Sunday Closed