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A customer wants to open an account to trade covered calls and puts. Which of the following communications must be provided to the customer prior to approving the account for trading?
Suggested Answer: D
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FINRA Rule 2360 requires that customers receive the Options Disclosure Document (ODD), published by the Options Clearing Corporation (OCC), before they are approved to trade options. The ODD explains the risks and characteristics of options trading.
D is correct because the ODD is mandatory for options account approval.
A is incorrect because a prospectus is not specific to options trading.
B is incorrect because the MSRB Investor Brochure applies to municipal securities.
C is incorrect because a margin disclosure statement is required only for margin accounts.
15 comments · newest first
CA
Carman
1 month ago
True! The ODD covers important info about strategies and risks.
LO
Lorriane
1 month ago
Plus, it's a regulatory requirement. Can't skip that!
DE
Delisa
2 months ago
Exactly! Without the ODD, they might not grasp the complexities.
CA
Carman
2 months ago
I feel like D is essential too. Customers need to understand risks.
LO
Lorriane
2 months ago
Agreed, D makes sense. It's crucial for options trading.
DE
Delisa
2 months ago
I think the right answer is D. Options disclosure document.
MI
Micaela
2 months ago
100% agree, ODD is a must before trading options!
BR
Brinda
3 months ago
Wait, are you sure the ODD is the only one needed? Seems too simple.
MA
Marleen
3 months ago
Yeah, the margin disclosure statement is important as well.
CO
Cortney
3 months ago
I thought a prospectus was necessary too?
TE
Tennie
3 months ago
Definitely need the Options disclosure document (ODD) for that.
CH
Cheryll
3 months ago
I practiced a similar question, and I think the ODD is the right answer, but I’m a bit confused about whether the margin disclosure statement is also necessary.
KA
Karon
3 months ago
I feel like the ODD is the key document for options trading, but I also recall something about needing a prospectus for certain investments.
KR
Krissy
4 months ago
I remember studying that the margin disclosure statement is important for margin accounts, but I’m not sure if it applies here since we’re talking about options.
AM
Amber
4 months ago
I think the options disclosure document is definitely required for trading options, but I’m not entirely sure if it’s the only thing needed.