General Securities Representative (Series 7) Practice Exam – Your All-in-One Guide to Exam Success!

Before a customer can trade options, they must receive the Options Clearing Corporation (OCC) disclosure document. This document provides essential information about the risks involved in trading options, the specific types of options, and the mechanics of trading them. It serves as an important tool for educating investors about the nature of options as financial instruments, thereby ensuring they make informed decisions.

While options trading also involves other requirements, such as signing an options agreement or potentially providing initial margins, the receipt of the OCC disclosure document is the foundational step that ensures customers understand what they are getting into regarding options trading. This regulatory requirement is in place to help protect investors and promote informed investing practices.