Memory Aides

Question 1

Bid / Ask

Answer 1

Buy at the “Ask”
Sell at the “Bid”

Question 2

3M Rule

Answer 2

Maturity Magnifies Move

Question 3

LONG an LOW

Answer 3

Longer the bond
Lower the coupon
Zeros move the most

Question 4

Accrued Interest

Answer 4

30/360 - Corp, Muni, Agency
——
Actual / 365 - U.S. Government

Question 5

Tax for Entities

Answer 5

Entities tax themselves

Question 6

Corp vs Muni

Answer 6

Rich people buy Munis
—
Poor people buy Corp

Question 7

Bond Order fulfillment

Answer 7

Pro Golfers Don’t Miss
P - presale
G - group
D - designated
M - members

Question 8

Limit vs Stop

Answer 8

Limit = “or better”
—
Stop = “stop loss”

Question 9

Slobs over Bliss

Answer 9

Question 10

Cash Dividend Dates

Answer 10

D.E.R.P.
D - declaration
E - ex-dividend
R - record date
P - payable date

Question 11

Options (Buy / Sell)

Answer 11

Buy a right
Sell an obligation

Question 12

Speculative Strategies (options)

Answer 12

Bull - long call, short put
—
Bear - short call, long put

Question 13

Foreign currency Options

Answer 13

E.P.I.C.
E - Exporters
P - Put
I - Importers
C - Call

Question 14

Straddle (profit / loss)

Answer 14

S.I.L.O.
S - short
I - inside
L - long
O - outside

Question 15

Breakevens in Spreads

Answer 15

Always between the XPs
—
C-A-L (call add to lower)
add net premium to lower XP
—
P-S-H (put subtract higher)
subtract net premium from higher XP

Question 16

Debit Spread

Answer 16

D-E-W

D - debit
E - expire
W - widen

Question 17

Credit Spread

Answer 17

C-E-N

C - credit
E - exercise
N - narrow

Question 18

Recognize Spread

Answer 18

S.O.D.A.

S - same
O - option
D - different
A - action

Question 19

Spread (sentiment)

Answer 19

B.U.L.L.S.

B - because
U - you are
L - long
L - lower
S - strike

Question 20

Discretionary Accounts - AAA

Answer 20

AAA

A - Asset
A - Action
A - Amount

Question 21

‘33 - ‘34

Answer 21

‘33 - paper
—
‘34 - people and places

Question 22

Underwriting
Brokers vs Dealers

Answer 22

B - A - A - C
Brokers act as agents for Commission
—
D-A-A-P
Dealers act as principals for profit

Question 23

3P - Types of Taxable Income

Answer 23

1. Paycheck
2. Portfolio
3. Passive

Question 24

Discretionary Accounts - AAA

Answer 24

Assets
Action
Amount

Question 25

Debit / Credit Spread

Answer 25

DEW Debit - Exercise - Widen — CEN Credit - Expire - Narrow

Question 26

Recognize a Spread

Answer 26

S.O.D.A Same Option Different Action

Question 27

Spreads (sentiments)

Answer 27

BULLS — B - because U - you are L - long L - lower S - strike — If you are long on the lower strike you are a bull

Question 28

1-4-4 rule

Answer 28

Greater than 1% - outstanding shares 4 - average of 4 weeks trading 4 - times per year (90 days)

Question 29

Underwriting Broker vs Dealer

Answer 29

B-A-A-C Brokers act as agents for commission — D-A-A-P Dealers act as principals for profit

Question 30

3P - Taxable Income

Answer 30

1. Paycheck 2. Portfolio 3. Passive

Question 31

Rates

Answer 31

Pretty Boys Drive Ferraris — P - Prime B - Broker/Dealer D - Discount F - Fed Funds

Question 32

3 Ways Options End

Answer 32

1. Traded 2. Exercised 3. Expired

Question 33

Trading Process

Answer 33

Other People’s Money Counts — - O: order dept - P: purchase and sales dept - M: margin dept - C: cashiering dept

Question 34

Variable Annuity

Answer 34

Mutual fund in an insurance wrapper

Question 35

SEP vs Simple IRA

Answer 35