Options Accounts
Chapters in this video
- 0:00 The options account gauntlet vs. a basic cash account
- 1:38 ODD delivery at or before approval
- 2:50 Unqualified branch manager and the 10-business-day ROP review
- 3:57 Due diligence information required from natural-person customers
- 4:56 Two separate 15-day clocks: agreement and verification
- 6:01 Discretionary accounts and naked option writing overlays
- 7:01 Recommendation suitability vs. unsolicited orders
- 7:40 Intrinsic value formulas and the negative-value trap
- 9:02 Premium decomposition table walkthrough
- 9:48 Rapid-fire exam recap
What this video covers
- The three-step sequence to open an options account and the exact timing of the Options Disclosure Document (ODD) delivery at or before approval
- The 10-business-day rule for a Registered Options Principal (ROP) or Limited Principal-General Securities Sales Supervisor to review an unqualified branch manager's approval
- The due-diligence information required before approving a natural-person customer and how it exceeds standard cash account requirements
- The two separate 15-day clocks that both start at account approval: signed options agreement returned and customer background information sent for verification
- Why silence from the customer means deemed verification, and why a late agreement does not automatically trigger closing-transactions-only restrictions
- The extra supervisory layer for discretionary options accounts and the written procedures required for uncovered (naked) option writing
- How to calculate intrinsic value for calls and puts, why it can never be negative, and how to solve for time value (extrinsic value) from any total premium
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