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Question 1 of 10
1. Question
What Capacity Type does code L stands for?
Correct
According to CBOE rule 1.1 Definition, Code L For the account of a non-Trading Permit Holder affiliate
Code B For the account of a broker or dealer, including a Foreign Broker-Dealer
Code J For a joint back office account
Code U For the account of a ProfessionalIncorrect
According to CBOE rule 1.1 Definition, Code L For the account of a non-Trading Permit Holder affiliate
Code B For the account of a broker or dealer, including a Foreign Broker-Dealer
Code J For a joint back office account
Code U For the account of a Professional -
Question 2 of 10
2. Question
What does the term “portfolio” mean?
Correct
according to CBOE rule 10.4 The term “portfolio” means products of the same class grouped together.
(6) The term “class” refers to all listed options, unlisted derivatives, security futures
products, and related instruments that are based on the same underlying instrument, and
the underlying instrument itself.
(11) The terms “theoretical gains and losses” means the gain and loss in the value of each
eligible position at 10 equidistant intervals (valuation points) ranging from an assumed
movement (both up and down) in the current market value of the underlying instrument.
(2) The term “security future” means a contract of sale for future delivery of a single
security or of a narrow-based security index, including any interest therein or based on the
value thereof, to the extent that that term is defined in Section 3(a)(55) of the Securities
Exchange Act of 1934Incorrect
according to CBOE rule 10.4 The term “portfolio” means products of the same class grouped together.
(6) The term “class” refers to all listed options, unlisted derivatives, security futures
products, and related instruments that are based on the same underlying instrument, and
the underlying instrument itself.
(11) The terms “theoretical gains and losses” means the gain and loss in the value of each
eligible position at 10 equidistant intervals (valuation points) ranging from an assumed
movement (both up and down) in the current market value of the underlying instrument.
(2) The term “security future” means a contract of sale for future delivery of a single
security or of a narrow-based security index, including any interest therein or based on the
value thereof, to the extent that that term is defined in Section 3(a)(55) of the Securities
Exchange Act of 1934 -
Question 3 of 10
3. Question
How many days when a copy of the background and financial information on file with the TPH organization shall also be sent to the customer for verification after the TPH organization becomes aware of any material change in the customer’s financial situation?
Correct
According to CBOE rule 9.1 Opening of Accounts (c) Verification of Customer Background and Financial Information A copy of the background and financial information on file with the TPH organization shall also be sent to the customer for verification within 15 days after the TPH organization becomes aware of any material change in the customer’s financial situation.
*10 days,12 days and 18 days are not in the rule.Incorrect
According to CBOE rule 9.1 Opening of Accounts (c) Verification of Customer Background and Financial Information A copy of the background and financial information on file with the TPH organization shall also be sent to the customer for verification within 15 days after the TPH organization becomes aware of any material change in the customer’s financial situation.
*10 days,12 days and 18 days are not in the rule. -
Question 4 of 10
4. Question
What unusual circumstances where no Trading Permit Holder shall, on the same business day, act as a Market-Maker and also act as a Floor Broker?
I. In a manner that accurately reflects the current state of the market on the Exchange
II. In the one or more of the markets trading the underlying security
III. With respect to option contracts traded at a given station
IV. In any security determined by the Exchange to be related to such a securityCorrect
According to CBOE Rule 8.19. Restriction on Acting as Market-Maker and Floor Broker
Except under unusual circumstances and with the prior permission of a Floor Official, no Trading
Permit Holder shall, on the same business day, act as a Market-Maker and also act as a Floor
Broker:
(a) With respect to option contracts traded at a given station, or
(b) In any security determined by the Exchange to be related to such a security.Incorrect
According to CBOE Rule 8.19. Restriction on Acting as Market-Maker and Floor Broker
Except under unusual circumstances and with the prior permission of a Floor Official, no Trading
Permit Holder shall, on the same business day, act as a Market-Maker and also act as a Floor
Broker:
(a) With respect to option contracts traded at a given station, or
(b) In any security determined by the Exchange to be related to such a security. -
Question 5 of 10
5. Question
Who is an individual that is registered with the Exchange for the purpose, while on the Exchange floor, of accepting and executing orders received from Trading Permit Holders or from registered broker-dealers?
Correct
According to CBOE Rule 3.50. Floor Brokers
(a) Floor Broker. A Floor Broker is an individual (either a Trading Permit Holder or a nominee of a TPH organization) who is registered with the Exchange for the purpose, while on the Exchange floor, of accepting and executing orders received from Trading Permit Holders or from registered broker-dealers.
Market Makers, Floor Manager and Clerks are not in the RuleIncorrect
According to CBOE Rule 3.50. Floor Brokers
(a) Floor Broker. A Floor Broker is an individual (either a Trading Permit Holder or a nominee of a TPH organization) who is registered with the Exchange for the purpose, while on the Exchange floor, of accepting and executing orders received from Trading Permit Holders or from registered broker-dealers.
Market Makers, Floor Manager and Clerks are not in the Rule -
Question 6 of 10
6. Question
Which of the following are the use of due diligence in handling and executing an order?
I. subject to the requirement to systematize orders prior to representation pursuant electronically recording the time via a PAR workstation at which the Floor Broker initially represents the order to the trading crowd
II. prioritizing the current calculation of the index derived from the current market prices of the stocks
III. prioritizing the Floor Broker’s agency business over the Floor Broker’s liquidation orders
IV. subject to limit orders to buy where the specified price is at or above the current bidCorrect
According to CBOE Rule 5.91. Floor Broker Responsibilities.
Use of due diligence
in handling and executing an order includes:
(a) Subject to the requirement to systematize orders prior to representation pursuant to Rule
5.7(f), electronically recording the time via a PAR workstation at which the Floor Broker
initially represents the order to the trading crowd; and
(b) Prioritizing the Floor Broker’s agency business over the Floor Broker’s liquidation ordersIncorrect
According to CBOE Rule 5.91. Floor Broker Responsibilities.
Use of due diligence
in handling and executing an order includes:
(a) Subject to the requirement to systematize orders prior to representation pursuant to Rule
5.7(f), electronically recording the time via a PAR workstation at which the Floor Broker
initially represents the order to the trading crowd; and
(b) Prioritizing the Floor Broker’s agency business over the Floor Broker’s liquidation orders -
Question 7 of 10
7. Question
What do you call the Exchange’s electronic book of complex orders maintained by the System, which single book is used during both the RTH and GTH trading sessions?
Correct
According to CBOE Rule 5.33. Complex Orders
Complex Order Auction and COA
The terms “Complex Order Auction” and “COA” mean an auction of a complex order
Complex Order Book and COB
The terms “Complex Order Book” and “COB” mean the Exchange’s electronic book of complex orders maintained by the System, which single book is used during both the RTH and GTH trading sessions.
Complex Strategy
The term “complex strategy” means a particular combination of components and their ratios to one another.
Regular Trading
The term “regular trading” means trading of complex orders that occurs during a trading session other than: (1) at the opening of the COB or re-opening of the COB for trading following a halt (described in paragraph (c) below) or (2) during the COA processIncorrect
According to CBOE Rule 5.33. Complex Orders
Complex Order Auction and COA
The terms “Complex Order Auction” and “COA” mean an auction of a complex order
Complex Order Book and COB
The terms “Complex Order Book” and “COB” mean the Exchange’s electronic book of complex orders maintained by the System, which single book is used during both the RTH and GTH trading sessions.
Complex Strategy
The term “complex strategy” means a particular combination of components and their ratios to one another.
Regular Trading
The term “regular trading” means trading of complex orders that occurs during a trading session other than: (1) at the opening of the COB or re-opening of the COB for trading following a halt (described in paragraph (c) below) or (2) during the COA process -
Question 8 of 10
8. Question
What is Two-Sided Quotes?
Correct
According to CBOE Rule 5.52. Market-Maker Quotes
Two-Sided Quotes-A Market-Maker that enters a bid (offer) on the Exchange in a series in an appointed class must enter an offer (bid).Continuous Electronic Quotes-A Market-Maker must enter continuous electronic bids and offers.
Size-A Market-Maker’s bid (offer) for a series must be accompanied by the minimum number of contracts determined by the Exchange on a class-by-class basis, the minimum of which will be one contract at the price of the bid (offer) the Market-Maker is willing to buy (sell).
Firm Quotes-A Market-Maker bids and offers are firm for all orders and Rule 602 of Regulation NMS under the Exchange Act (“Rule 602”) for the number of contracts specified in the bid or offer.
Incorrect
According to CBOE Rule 5.52. Market-Maker Quotes
Two-Sided Quotes-A Market-Maker that enters a bid (offer) on the Exchange in a series in an appointed class must enter an offer (bid).Continuous Electronic Quotes-A Market-Maker must enter continuous electronic bids and offers.
Size-A Market-Maker’s bid (offer) for a series must be accompanied by the minimum number of contracts determined by the Exchange on a class-by-class basis, the minimum of which will be one contract at the price of the bid (offer) the Market-Maker is willing to buy (sell).
Firm Quotes-A Market-Maker bids and offers are firm for all orders and Rule 602 of Regulation NMS under the Exchange Act (“Rule 602”) for the number of contracts specified in the bid or offer.
-
Question 9 of 10
9. Question
What is a put or a call issued, or subject to issuance, by the Clearing
Corporation pursuant to the Rules of the Clearing Corporation?Correct
According to CBOE Rule 1.1. Definitions
Option(s) Contract
The term “option(s) contract”-means a put or a call issued, or subject to issuance, by the Clearing Corporation pursuant to the Rules of the Clearing Corporation.
OPRA
The term “OPRA” means the Options Price Reporting Authority.
Options Principal
The term “Options Principal” means a person engaged in the management and supervision of the Trading Permit Holder’s business pertaining to option contracts that has responsibility for the overall oversight of the Trading Permit Holder’s options-related activities on the Exchange.
Order
The term “order” means a firm commitment to buy or sell option contracts.Incorrect
According to CBOE Rule 1.1. Definitions
Option(s) Contract
The term “option(s) contract”-means a put or a call issued, or subject to issuance, by the Clearing Corporation pursuant to the Rules of the Clearing Corporation.
OPRA
The term “OPRA” means the Options Price Reporting Authority.
Options Principal
The term “Options Principal” means a person engaged in the management and supervision of the Trading Permit Holder’s business pertaining to option contracts that has responsibility for the overall oversight of the Trading Permit Holder’s options-related activities on the Exchange.
Order
The term “order” means a firm commitment to buy or sell option contracts. -
Question 10 of 10
10. Question
What immediate and continuous representation at the trading station where the applicable class trades of the following types of orders?
I. Market order
II. Limit orders to sell where the specified price is at or below the current offer
III. Operational capacity
IV. Limit orders to buy where the specified price is at or above the current bidCorrect
According to Rule 5.91. Floor Broker Responsibilities. (3) the immediate and continuous representation at the trading station where the applicable
class trades of the following types of orders:
(a) Market orders;
(b) Limit orders to sell where the specified price is at or below the current offer or; and
(c) limit orders to buy where the specified price is at or above the current bidIncorrect
According to Rule 5.91. Floor Broker Responsibilities. (3) the immediate and continuous representation at the trading station where the applicable
class trades of the following types of orders:
(a) Market orders;
(b) Limit orders to sell where the specified price is at or below the current offer or; and
(c) limit orders to buy where the specified price is at or above the current bid