You definitely need to know the difference between Bid and Ask for the Series 7 Exam. This topic seems to give people some real trouble on the Series 7 Exam. Hopefully, this will help.
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Hey, this is tim finnett and kevin of any shooter it's time for another way to advance rundown unbid versus so to pass the series 7 exam and the sie exam you will need to know the difference between a bid and an ask in a nutshell before I even do the little pictures bid is where people want to buy it ask is where people want to sell it.
So if you want to buy it, you have to buy it where people are willing to sell it.
Right? I mean, that makes sense you can't, buy it when no one's willing to sell it so that's, why they always say buy it.
They ask and sell the bid it's, easy stuff.
Let's get going.
So here's, just a basic let's, put this over here, make it look good catch tutoring.
My company let's say, it went public.
And these are mm is market.
Market makers are broker dealers that their job is to bid, an offer all day in a certain stock.
They have a lot of rules, which don't have to worry about this on this exam.
The main rule you do have to know is that if you're a market maker in a stock, you have to be publishing quotes to buy and sell reasonable to the inside market within like four percent of the inside market, all at all times from 9 30 a.m to 4 p.m, that's, that's, your main rule and minimum of 100 shares if it's on an exchange like nasdaq.
Now, the bid is where people want to buy it.
And they ask is where people want to sell it.
So here are the bids.
You know, we have market maker, a bidding, 2510 market, maker, b, bidding, 2508, market, maker, c, bidding 2501.
So which one of these do you think has the best chance of buying stock who wants to be the most aggressive.
Yes, you're, right.
So this is the highest bid so that's, one of the things of the inside market is the highest bid.
And the other side is the lowest ask so we're going to do the same thing, which one of these is it.
This one this one or this one, you guessed it, it's.
This one, okay.
So that's, the lowest ask so the inside market is now 2510 by 2540.
So this is the highest price at this snapshot in time right now that anyone's want to pay and that.
This is the lowest price.
Anyone is willing to sell at this moment in time.
Doesn't mean, two seconds later could change.
But right now, this is the inside market.
So if you want to buy stock, you can buy it from people willing to sell it and they're willing to sell it at 25.40 so that's, where you buy it.
If you want to sell stock, we can sell it where people want to buy it.
So you have to sell there.
I mean, think about it.
So if you entered an order to buy 100 shares, I mean, I didn't put prices in here.
Yeah, I mean amounts in here, yep, but I will buy 100 shares at 25 30.
So let's think about this.
So let's think about this.
You walk into here and say, I want to buy a hundred shares and I'm willing to pay 25 30.
So they the computer goes.
25 30 is what you're willing to pay.
We look, no that doesn't work, no that doesn't work and no that doesn't work.
So there's, no one willing to sell it at your price.
But you can't, buy it, but you're now, the best bid, which means anyone who wants to sell, it will come to you first because you're higher than any of these.
So let's say, you sent this order to market maker c.
They would update your quote and say, okay, we have viewer want to pay 25 30.
So now that's the that's, the new best price.
So this will go down here.
And now our inside market is now 25 30 by 25 40., it's, just tightened up a little bit still nothing's happening.
So if you want to buy it, you still have to pay 25.40.
And if you sell it, you still have to sell it at 25 30., that's, the inside market that's, most of it.
Now, the market makers, they always say, the market makers, buy at the bid and sell the esq it's, not that they get to violate the rules it's that they're more likely to buy because they're sitting there posting that they'll want to pay this price.
So market maker c is the most likely person to buy stock, because they have the highest price out there, they're, saying, hey, I'm willing to pay 25 30 and that's what we're doing.
And these are all limit orders.
Okay, because a market order would just get executed against either the offer if it's a buy or the benefits of sell that's, all it is it's.
Nothing crazier than that.
It's, actually, very simple.
Now, let's let's change it up.
So we have the inside market.
So this is what a level.
One would look like a little bit I'm, gonna change it up and show you what it really looks like.
But so this is showing the inside market.
This is showing the highest bid.
And the lowest ask it's, not saying who it is it's, just telling you that though it's there.
Now these numbers down here, this tells you how many shares are wanted in this case, it's, 500 but guys, it looks like five, no because it's five round, lots.
Each round is 100 shares.
So this is really 500.
Okay, that's really for 500 shares.
We it's just quicker to write it.
The other way.
Now this one you add two zeros onto it.
So this is really for a thousand shares or 10 round knots.
So if you want to buy stock at 40, you can buy up to a thousand shares at 25.40.
And if you want to sell stock at 25.30, you can sell up to 500 shares there.
Now, if you want to buy more than that, you can try, and maybe this person offering will do it.
And and understand something this may be more than one person offering.
This could be five people offering 200 shares each.
They just aggregated.
This could be, you know, one person doing 300 and one person doing 200.
on the inside market also known as the nbbo, which is what you'll see with a level.
One you don't know, who's bidding or offering, you just know that that's how much is wanted at that price.
This could be this could be one offer or ten.
This could be up to five really the most you could have is five because the minimum is 100 shares that's bid, an ass that's the inside offer.
Now we talk about level, one level, two level, three level, one.
This is how quote will look.
So this is a level.
One quote, it shows you the name of the company, the bid, the ask the bid amount the offer amount so this, if you remember from the previous one, this would this is representing this 25 30.
bid for 500 and a thousand offered at 25 40.
So really it's, almost like you're, just taking this and placing a bow here.
This x just means buy so this.
This represents this bid.
S, always remember bid, ask as your, um bid, ask or bad ass to remember the bid ass order this is telling you how much it's up or down since the close.
So if they ask, you say, if it's let's, oh, let's, put a last in here, let's say, it's trading at 25, 31 let's just say it did say the last sale is 25 31, and it says, it's up by a nickel.
That means it closed.
I can't hope we can do the math right? It closed at 25 26 last night so it's up, six, five cents since the close last night.
And this is the volume on the day, how many shares have traded on the day that's level? One, okay.
So this is a level.
Two level, two looks like this see here's, the stock here's, the last sale, here's, the how many buy orders now down here level two is different than level one because it shows you all the people bidding and offering arca philadelphia.
Edgar batts, new york stock exchange, timber, susquehanna morgan stanley or goldman for first boston maxim.
These the left side are all the bidders.
Look all these things here, all the bidders they're buying you have, however, many shares say, it's, ten thousand, eleven thousand.
It keeps changing.
But this number up here is adding up all these numbers at 39 43.
This is the bid side over here we're showing that right.
It keeps changing because these are all the offers at 44 cents.
So the bid is 43 the offer is at 44.
So this is, this is changing to show you how many shares are offered.
But you see that it doesn't tell you who's offered it just tells you how many this part tells you who's offering up here.
The level one just shows you how much at a certain price and then level one, again only shows you the how much at the immediate highest bid lowest ask level, two, you get to see all the other prices all the way out.
And you get to see his offering over here down here.
These are all the trades.
This is called the tape as you're seeing it happen.
All these little codes mean, a bunch of different things.
So this this shows you how high it is on the day, how low it's on the day stuff like that, the the percentage between the spread between the bid and the ask that's all this is showing so level two shows you the all the buyers at all.
The prices level two shows all the sellers at all the prices.
Then we have level three, which is for market makers, which allows the market makers to enter quotes like, you know, here like down here, maximum they're bidding, you know, 3634 and offering it 42.66 they're, pretty far away from the market, but they they actually their machine will have a little thing that says enter quote, update quote, and they can actually put quotes in and change the markets.
So there that's most of it that is the quote system that's, the um that's, the different levels that ask, I hope that helps if you have any questions, please leave a comment and I'll try to do more.
- Read the full question before answering.
- Identify what the question is asking.
- Identify key words and phrases.
- Watch out for hedge clauses, for example, except and not.
- Eliminate wrong answers.
- Identify synonymous terms.
- Be wary of changing answers.
When preparing to take the Series 7 exam, you should plan to study for 125-150 hours. Typically, candidates study over the course of 4-6 weeks. The time you need to spend preparing for the exam varies depending on your familiarity with the material.Can you self study for the Series 7? ›
A Series 7 exam prep course consists of the materials and resources a student needs to prepare for the exam. Basic exam courses include a study guide (online or printed) and practice exams and are typically designed for self-directed study.Is the Series 7 harder than the bar exam? ›
Any state bar exam as well as the UBE (Uniform Bar Exam) is much more difficult than the Series 7 exam taken to become a stock broker. It takes 3 years of intense study to get through law school after which most take a 2 or 3 month bar review course prior to sitting for the bar exam.Do most people pass Series 7 on first try? ›
Around 6.5 out of 10 people, or 65%, will pass the Series 7 exam on the first try. The first-time pass rate for the Series 7 has been between 60% and 70% for the past few years. This is an important distinction, as it shows how difficult the exam is and how prepared you need to be in order to pass it.Can you study for the Series 7 in 2 weeks? ›
Most financial institutions will provide new hires with Series 7 study materials and will encourage them to allocate about 1 week of dedicated study time. In reality, test takers should spend close to 100 hours, of which at least 20-30 hours should be dedicated to practice exams and questions.What is the best app to study for the Series 7 exam? ›
Pocket Prep is your award-winning tool in mobile learning and exam preparation. Pocket Prep allows you to study anywhere, anytime, right from your mobile device. We strive to make studying more efficient by redefining how you prepare for Series 7 exam.Is Series 7 harder than CPA? ›
Having taken and passed both, I can say that without a doubt the CPA exam is more difficult, and for one primary reason… breadth of subject matter. The Series 7 is 3 hours and 45 minutes, is comprised of 125 questions, and has a pass rate of approximately 70%.What disqualifies you from Series 7? ›
- You are convicted of certain misdemeanors and any felony within a period of ten years from the date of conviction.
- A court of competent jurisdiction issued against you a temporary or permanent injunction involving a broad range of unlawful investment activities.
The Series 7 exam, like other FINRA exams, is presented in a bell curve. Exams presented in this manner should start with easier questions, move to more challenging questions, and end with easier ones.
That means if you want to be any kind of general securities representative, broker or dealer and want to buy or sell pretty much any kind of financial securities, options or contracts, you'll need to pass the Series 7. And you'll also need to be sponsored by a financial company who is a member of FINRA or a SRO.Why is Series 7 so hard? ›
It is a corequisite of the SIE exam, which tests you on general securities topics. By contrast, the questions on the Series 7 exam are detailed and related to the day-to-day activities, responsibilities, and job functions of stockbrokers. Therefore, it can be considered a challenging exam.Can I take the Series 7 without a sponsor? ›
Eligibility. Candidates must be associated with and sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm to be eligible to take FINRA representative-level qualification exams. For more information on registration requirements, refer to FINRA Rule 1210.Is the Series 7 easier now? ›
The new Series 7 is harder, kind of
The exam no longer includes all the simpler questions that now make up the SIE, yet the passing score is still the same: 72%.
The Series 7 exam is often considered the most difficult securities licensing exam. But, the answer is up to you.What is most heavily tested on Series 7? ›
- Municipal Debt Securities.
- Rules and Regulations.
- Bonus! Mutual Funds.
A candidate can take the Series 7 exam as many times as they like; however, for the first three times, the candidate has to wait 30 days before trying again; after the first three attempts, the candidate has to wait six months.Is a Series 7 license worth it? ›
The Series 7 license stands out in the industry because practitioners must pass one of the longest and most rigorous exams in the industry to obtain it. This license not only allows them to sell most securities, but it also means they have extensive knowledge of financial topics. FINRA administers the exam.Why can't i pass the Series 7? ›
Some test takers fail the Series 7 exam because they spend too much time on reading and memorizing calculations and concepts. In this article that lists 7 strategies for passing the Series 7 exam, it says to balance studying between manuals and practice questions, which is sound advice for first-time exam takers.How long is your Series 7 good for? ›
Instead, you will only need to pass the Series 7 exam to become registered. If you register with a broker-dealer and subsequently terminate your registration, then the SIE will be valid for four years from the termination date of the representative-level registration.
While the Series 7 is required by all securities representatives at the entry-level, the Series 79 exam is a requirement for anyone who wants to work as an entry-level investment banker.What should I memorize for Series 7? ›
- Determine the outstanding shares. Outstanding shares = issued shares – treasury stock.
- Long margin account formula. ...
- Short margin account formula. ...
- Calculate the time value of an option. ...
- Balance sheet formula. ...
- Calculate working capital. ...
- Calculate the time value of an option.
The Series 7 Exam: A Passing Score and How Many Times You Can Take It. A passing score on the Series 7 exam is 72%. The exam has 125 multiple choice questions, costs $245 and lasts 225 minutes.How to sit for Series 7 exam? ›
- Step 1: Prepare for the Series 7 license with STC exam prep. ...
- Step 2: You must be age 18 or older to sit for the Series 7 exam.
- Step 3: Find a member firm to sponsor you. ...
- Step 4: Enroll in your FINRA Series 7 exam. ...
- Step 5: Schedule your Series 7 exam.
GRE (Graduate Record Examination)
Owned and administered by the Educational Testing Service (ETS), GRE is among the world's most difficult exams. The exam is administered both online and in person. As a standardized test, GRE measures the overall academic readiness of students who want to attend graduate school.
Most CPAs must earn a bachelor's degree or even a master's degree to move up the corporate ladder. Experienced CPAs can earn in the mid- to high six figures, especially if they end up in a management or leadership position.What is the hardest accounting class? ›
Tax Accounting: Usually some of the most difficult classes for an accounting major as they delve into the minutia of tax codes, though this knowledge is a major source of income for accounting graduates.Does Series 7 look good on resume? ›
If you have any financial certifications, such as a FINRA 7 or a Chartered Financial Analyst certification, hiring managers and job recruiters will want to know about them, so make sure you highlight them. Keeping your resume short makes it easy for readers to see exactly what you offer.How much income with Series 7? ›
|Annual Salary||Hourly Wage|
FINRA does not have the authority to send someone to jail or prison for violating securities law.
How many math questions are on the Series 7 exam? There are typically less than 10 math questions on the exam, but they will likely be detailed and require multiple steps. A math question may also incorporate suitability.Which chapters are most important for Series 7? ›
- Municipal Debt Securities.
- Rules and Regulations.
- Bonus! Mutual Funds.
Put the time in
My recommended prep time for the Series 7 exam is 80-100 hours. Study the right material and do at least 1,000 practice questions before the big day.
Financial Accounting and Reporting (FAR) Often considered the most difficult exam, Financial Accounting and Reporting (FAR) has had the lowest passing scores of the four exams.How many times can you fail the Series 7? ›
The Financial Industry Regulatory Authority (FINRA) administers the exam. The organization has not placed any limits on the number of times you can attempt to pass the Series 7 exam, and there is no specific education required to take the exam.Why is the Series 7 so hard? ›
It is a corequisite of the SIE exam, which tests you on general securities topics. By contrast, the questions on the Series 7 exam are detailed and related to the day-to-day activities, responsibilities, and job functions of stockbrokers. Therefore, it can be considered a challenging exam.How many people hold Series 7 license? ›
There are over 40,000 people every year who take the Financial Industry Regulatory Authority's Series 7 examination, with only two-thirds passing.How long is Series 7 good for? ›
Instead, you will only need to pass the Series 7 exam to become registered. If you register with a broker-dealer and subsequently terminate your registration, then the SIE will be valid for four years from the termination date of the representative-level registration.What is the easiest FINRA exam? ›
As a result, the Series 66 exam is considered by most to be an easier test. Like the Series 65 exam, it qualifies the individual to act as an IAR and fulfills the requirements for state registration.