SIE practice questionmediumOptions Account Features
A new client wants to write uncovered options. The firm must:
- AOpen a cash account only
- BApprove the account automatically
- CDeny the account for all options trading
- DCollect detailed financial information and obtain principal approval✓ Correct answer
Explanation
Why D — Collect detailed financial information and obtain principal approval
Uncovered options are risky, so the firm must collect thorough financial and investment information, and a registered options principal must approve the account. Automatic approval and denial are both incorrect, and cash accounts limit the strategies that can be used.
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