SEC CO/AP case studies

SEC CO/AP · Put your knowledge to work in context.

The SEC CO/AP - the Certified Options and Advanced Products Representative credential - is a vendor-style qualification for individuals who advise retail or institutional clients on listed options and the wider family of advanced products: corporate and municipal bonds, money market and government securities, and structured or packaged investments. It suits registered representatives moving beyond equities, junior traders on a derivatives desk, compliance and supervision staff who review options activity, and sales assistants preparing for a licensed advisory role. The SEC CO/AP case studies are 5 cases and about 4,034 words.

Covered Call or Collar on a Concentrated Dividend-Paying Position

A 61-year-old client holds 25,000 shares of a regulated utility at 52.40, with a 38.10 cost basis; the position is 18% of her net worth. She wants income and downside protection through year-end.

813 words, about 4 min 2

Earnings Event: Short Straddle Versus Iron Condor

A 39-year-old client has a 250,000 account approved for Level 3 options strategies, including spreads but not uncovered calls. She owns 1,000 shares of a biotech company trading at 180 and expects a large move after earnings in 10 days, but she has no directional view.

755 words, about 4 min 3

Taxable Equivalent Yield and Call Risk in a Bond Swap

A married couple in the 35% federal bracket and 5% state bracket is considering a 500,000 bond purchase with a 10-year horizon. They need about 18,000 of annual income.

840 words, about 4 min 4

Treasury Bill Versus Prime Money Fund for a 45-Day Cash Reserve

A corporate treasurer must invest 10 million of operating cash for exactly 45 days and cannot tolerate principal loss. A prime institutional money market fund advertises a 7-day yield of 5.28%, with a weighted average maturity of 38 days, a weighted average life of 75 days, weekly liquid assets of 32%, and daily liquid assets of 18%.

794 words, about 4 min 5

Using Margin to Buy a Buffered Note for a Retiree

A 78-year-old widow has 1.2 million of liquid assets outside her home, plus 600,000 of a single stock with a 200,000 cost basis. She receives 28,000 of Social Security and needs about 50,000 per year from her portfolio.

832 words, about 4 min