General Securities Representative (Series 7) Practice Exam

What must a customer see before trading, even if they have not signed the Options Agreement?

1. OCC disclosure document

2. Account summary statement

3. Transaction fee schedule

4. Margin agreement

The correct answer is: OCC disclosure document

Before trading options, it is essential for a customer to review the OCC (Options Clearing Corporation) disclosure document. This document provides critical information about the risks involved in options trading, including details on how options work, potential risks and rewards, and the specific mechanics of options markets. It aims to ensure that customers have a comprehensive understanding of the nature and risks of options before engaging in any trading activities. While a customer may not have signed the Options Agreement, reviewing the OCC disclosure document is a regulatory requirement to help protect the customer and ensure informed decision-making. This practice reflects the importance of transparency and knowledge in trading derivatives such as options. Other documents like an account summary statement, transaction fee schedule, or margin agreement serve different purposes in managing and understanding an account, but they do not focus specifically on the risks and characteristics of options trading as the OCC disclosure document does.