SEC CO/AP study guide
SEC CO/AP · Work through your exam, one topic at a time.
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 study guide has 8 sections and about 2,824 words.
01Options Fundamentals and Contract Specifications
This domain tests whether you can describe a listed option contract precisely: what the holder owns, what the writer owes, how the contract is standardized, and how it is adjusted or settled when the underlying changes. One standard equity option covers 100 shares.
360 words, about 2 min02Options Pricing, Greeks, and Volatility
The exam tests whether you can decompose a premium, apply put-call parity, and predict how an option's price reacts to each input. Premium = intrinsic value + time value.
340 words, about 2 min03Options Strategies and Position Management
This domain tests whether you can construct a strategy, state its maximum gain, maximum loss, and breakeven without hesitation, and manage an existing position through assignment, rolling, or expiration. Covered call: long stock + short call.
352 words, about 2 min04Municipal and Corporate Debt Securities
This domain tests the structure, taxation, and disclosure rules for tax-exempt municipal bonds and corporate debt, including how yields are compared across the two markets. General obligation bonds are backed by the issuer's taxing power; revenue bonds are backed by project cash flows and are usually higher risk.
342 words, about 2 min05Money Market Instruments and Government Securities
This domain tests the short end of the curve: how Treasury, agency, and money market instruments are quoted, settled, and regulated. Treasury bills are sold at a discount and mature at par in one year or less; interest is exempt from state and local tax.
356 words, about 2 min06Structured Products and Packaged Investments
This domain tests products that wrap another asset in a legal structure, and whether the representative can explain payoff, fees, liquidity, and the layer of regulation that applies. Structured notes are unsecured debt of the issuer with an embedded derivative: principal-protected notes, reverse convertibles, buffered and leveraged notes.
347 words, about 2 min07Margin, Suitability, and Customer Account Rules
This domain tests the arithmetic of Regulation T and FINRA Rule 4210, plus the account-opening and recommendation standards that apply before any trade is placed. Reg T initial margin for long stock is 50% of the purchase price; FINRA maintenance is 25% of market value for long stock and 30% for short stock, subject to a $5-per-share minimum.
369 words, about 2 min08Regulatory Framework and Recordkeeping
This domain tests the statutory map - which law governs which activity - and the retention rules that keep a firm's books and records examinable. Securities Act of 1933: registration of new issues, prospectus delivery, exemptions in Section 4(a)(2) and Regulation D, resale limits under Rule 144.
358 words, about 2 min