SIE Exam Prep - Tutoring Replay Section 3 Trading, Customer Accounts, Prohibited Activities

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This session:
Section 3: Understanding Trading, Customer Accounts and Prohibited Activities
3.1 Trading, Settlement and Corporate Actions
3.1.1 Orders and Strategies
• Types of orders (e.g., market, stop, limit, good-til-canceled (GTC), discretionary vs. non-discretionary, solicited
vs. unsolicited)
• Buy and sell, bid-ask
• Trade capacity (e.g., principal, agency)
• Long and short, naked and covered
• Bearish and bullish
3.1.2 Investment Returns
• Components of return (e.g., interest, dividends, realized/unrealized gains, return on capital)
• Different types of dividends (e.g., cash, stock)
• Dividend payment dates (e.g., record date, ex-date, payable date)
• Concepts of measurement (e.g., yield, yield to maturity (YTM), yield to call (YTC), total return, basis points)
• Cost basis requirements
• Benchmarks and indices
3.1.3 Trade Settlement
• Settlement time frames for various products (e.g., T, T + 1, T + 2)
• Physical vs. book entry (e.g., delivery and settlement)
3.1.4 Corporate Actions
• Types of corporate actions (e.g., splits, reverse splits, buybacks, tender offers, exchange offers, rights offers,
mergers and acquisitions (M&A))
• Impact of stock splits and reverse stock splits on market price and cost basis
• Adjustments to securities subject to corporate actions
• Delivery of notices and corporate action deadlines
• Proxies and proxy voting
3.2 Customer Accounts and Compliance Considerations
3.2.1 Account Types and Characteristics
• Cash
• Margin
• Options
• Discretionary vs. non-discretionary
• Fee-based vs. commission
• Educational accounts
3.2.2 Customer Account Registrations
• Individual
• Joint
• Corporate/institutional
• Trust (e.g., revocable, irrevocable)
• Custodial (e.g., UTMA)
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