SIE practice questioneasyOptions Strategies
Which of the following is a prohibited options practice?
- AHedging a stock position with options.
- BEntering a series of orders intended to mislead the market about actual demand for an option.✓ Correct answer
- CSelling covered calls.
- DBuying protective puts.
Explanation
Why B — Entering a series of orders intended to mislead the market about actual demand for an option.
It is illegal to place orders for the purpose of misleading the market. The other choices involve legal options strategies.
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