Series56 question:

Discussion in 'Professional Trading' started by Empresario__, May 15, 2012.

  1. I remember a question on the exam regarding a trader owning stock that was given rights to buy stock at a cheaper price ( or exercising rights,)[ I forgot which one]. But the question was wether the trader was less interested, more interested, or equally interested in the company if the trader didn't take action on the rights/ buying more stock at cheaper $. So, is the trader

    More interested
    Less interested
    Equally interested

    In the company If no action is taken?
  2. Equally interested. If i read correctly you said he didnt do anything he was just "offered" rights.

    How did you study for the test. How did you think it was?
  3. @Petrobras:
    That is what I chose, since he did not take action he should be equally interested in the company right? In the Pass Perfect book it says that traders are "discouraged" when these rights are exercised since there are more shares outstanding. Since EPS is based on outstanding shares then EPS is decreased... i guess that is why they would become "less interested" in the company? i'm not too sure ...
  4. If anyone is interested, USG had a rights offering sometime ago. At the time I couldn't find much info on rights offering (seems more common in London.)

    Usg stock basically dropped to the rights offering price. (I'm only going from memory here). i think it was trading >$70 at the time of offering and the rights were $40. It looked like it was going to be a field day. But the stock trended down.

    Secondly, when the rights offerings actually began trading that trading wasn't available to retail. I think for several days. All the big boys made a few bucks.

    I agree it's dilution.
  5. Empresario

    I saw you used pass perfect. I have the same book. Did you pass? Any advice?
  6. zbojnik


    Yea, Did you guys pass using pass perfect? I used passed perfect and failed. Is it just me or are the questions on the test nothing like what they teach in the pass perfect book. If FINRA is the one making the questions to the series 56 test, then why the hell dont they make a book so we can learn the rules instead of having a whole different company try to 'guess' whats going to be on the test. Is there anything better than passperfect book?
  7. I know what you guys mean, I wish there was a book that is more similar to the test. I failed with a 69! I could not believe i missed it by 1. Even the Prop. Trading desk that sponsored me was trying to see if they could let it go, but of course they didn't! Also, You guys have to study the Chapters by emphasis, which the book has wrong. Here is the actual breakdown:

    1) Personnel, Business Conduct and Record keeping
    and Requirement 9 Questions

    2) Markets, Market Participants, Exchanges, And
    Self Regulatory Organizations 8 Questions

    3) Types of Characteristics of Securities and
    Investments 20 Questions

    4) Trading Practices and Prohibited Acts 50 Questions

    5) Display, Execution, & Trading Systems 13 Questions

    As you can see it is really heavy on Ch. 4 and so on. I am trying to make videos that will help those taking the exam. I am re-reading the whole Pass Perfect book and explaining which ones I remember seeing on the exam.... here is a link

    I am barely on Ch.1 i will try my best to get more uploaded
  8. Empresario

    Thanks for the reply and the video. I will watch the youtube later tonight when I have time!

    I have one last question.

    What range of scores did you get on the practice exams (in the pass perfect) before you took the real test. Roughly.

  9. zbojnik


    What is the SERIES 56 Waiver? Can I get the waiver if I only want to trade stocks on Nasdaq?
  10. @Petrobras
    Thanks and Np. When I took the tests for Pass Perfect i would miss roughly around 20 i think. I spent most time on Ch. 4 since it is basically 50% of all the test. The options part is very broad and most strategies are not even on the test. Good Luck!

    The waiver for the 56 is only if you already passed the series 7. The main difference i believe is that the 56 concentrates on options and is "sponsored" by the CBOE while the series 55 and series 7 is FINRA "Sponsored". I do not think they would validate your request since they want everyone to be licensed to fight fraud, manipulation, and money laundering. Thats why they take your fingerprints and dont license you if you have any "financial crimes" in your past.
    #10     May 17, 2012