Open Exam Prep

Series 7 Exam Prep 49, Options Hedging and Income Strategies

July 26 · 4 min · 4.6 MB
0:00-4:45

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This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.

In this episode you will learn:
- A covered call is used to generate income on a long stock position, but it caps the potential upside gain.
- A protective put acts like insurance for a long stock position, providing downside protection while allowing for unlimited potential gain.
- A collar combines a protective put with a covered call to provide downside protection at a reduced cost, but it also limits upside potential.
- A cash-secured put is a strategy used to acquire stock at a price below its current market value by selling a put option and setting aside the cash to purchase the shares.
- How to calculate breakeven, maximum gain, and maximum loss for each of these core Series 7 options strategies.

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