Series 7 practice questionmediumTrade Settlement — Seller's Option
In a seller's option settlement, the seller may deliver securities:
- AOnly on the regular way settlement date
- BOnly on the specific date agreed upon, with no flexibility
- CAny time from T+2 through the agreed-upon date, provided one day's written notice is given✓ Correct answer
- DWithin T+0 to T+1 at the seller's discretion
Explanation
Why C — Any time from T+2 through the agreed-upon date, provided one day's written notice is given
A seller's option contract allows the seller to deliver the securities at any time from T+2 through the agreed-upon settlement date, provided the seller gives the buyer one business day's written notice of the intended delivery date. This type of settlement is used when the seller needs additional time beyond regular way settlement to deliver the securities. The minimum settlement for a seller's option is T+2 because T+1 is already the regular way settlement period.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 755+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Order Processing & Trade Settlement questions
- Which date determines who is entitled to receive a declared dividend?
- A customer buys 100 shares of RST stock on Monday, March 9. The stock has a record date of Tuesday, March 10 for a…
- What is the regular way settlement period for options contracts traded on an exchange?
- A corporation announces a 2-for-1 stock split effective April 15. Between the announcement date and the effective date,…