American Investment Training

Monday, February 29, 2016

Pass The Series 7 Exam GUARANTEED. Special Online Portal for Series 7 Students

If you think you cannot pass the Series 7 for whatever reason, THIS course portal guarantees you will! 100% pass guarantee. Other exam courses available:

This Series 7 training course is a 100% pass guarantee online module. If you fail the exam, WE refund the course cost.

The course is comprised of 18 modules

Online Topics/subjects include:

Online topics include:

Intoduction to the Series 7 Test
Equity Securities
Bonds and Debt
Margins and Customer Accounts
Municipal Bond Securities
Investment Companies and Mutual Funds
FINRA Regulations and Law
Financial Statements and Balance Sheet
Taxes and Retirement Planning
Direct Participation Programs (Limited Partnerships)
4 Series 7 midterm exams for maximum study prep,

5 Series 7 mini-finals,

4 extra print-based final exams

6 final exams.

Modules — each Series 7 Section is comprised of the following:

Subject Lesson — the lesson is available in both an online format and a print (PDF) format; the content of each is identical, and you should read one version or the other, depending on your preference.

Executive Summary — the key points of each lesson are presented in bold red print in the lesson, and are also found in the Executive Summary at the beginning of each lesson. You should read the Executive Summary to familiarize yourself with these key points, then read the lesson to gain more insight into the material. You should re-read the Executive Summary after completing the quizzes for each module.

Series 7 Tutorial — each module includes recorded PowerPoint tutorials with audio. These tutorials are an invaluable and necessary part of each module.


START THE COURSE HERE - NO RISK. This is American Investment Training's HIGHEST PASS RATE Training Program available.

Begin with link above or learn more here: SERIES 7 ONLINE

Thursday, February 25, 2016

Open End Mutual Funds Tutorial

Investment companies - including open end mutual funds are covered on the Series 6 and Series 7 exams.

“What is a Mutual Fund?”

A Mutual Fund (also called “Open End” Funds) is a company that invests money for their
shareholders. They usually offer strong diversification and are managed professionally. They
are called “Open End” because they are always issuing new shares of their fund. There is no
secondary market. An Agent (acting as a broker) representing a Mutual Fund will sell shares
of a fund but the transaction is facilitated by the fund company itself. For instance, if you want
to buy a mutual fund offered by “Fidelity Mutual Funds”, you must purchase it through an
Agent who represents them directly. You can’t just call any broker and buy Funds the way you
buy stock. There are thousands of different funds. You can buy a fund that fits your

Mutual funds that have blue chip stocks, penny stocks, bonds or a mix in their portfolio is still considered an open end fund and the price will not be set until all the securities have settled their value at the end of the day. There are also other price consideration issues such as:

Sales Charge - what the fund charges to buy or perhaps when sold. There are also no-load funds where a sales fee is not charged.

Redemption Fee - Some open end mutual funds will charge a fee to redeem the shares of the fund. Many times this fee is in place when the buying sales charge is low or there is no sales charge going in.

Some types of funds include:

INCOME FUND - Specializing in buying stock in established companies (IBM, Philip Morris
etc.) or Bonds that generate interest income. These funds will normally pay good dividends
because they are receiving income from the investments themselves.

GROWTH FUND - Invested in emerging or growth companies. The fund buys companies
that they feel have good potential in the future. These funds, although low paying with respect
to dividends, have the greater potential to increase in share value.

SECTOR FUND - Invests in a particular sector or industry such as: Energy, Technology or
Internet only. These funds are less predictable since their performance is solely based on the
performance of that particular sector of the market.

“How do I get a job as a Mutual Fund Agent?” and other employment answers - including Series 6 or Series 7 Sponsorship:

Get the: How to become a successful stockbroker E-Guide!

Sunday, February 21, 2016

Series 7 Sponsorship - How To Get Sponsored For The Series 7

One of the challenges incoming stockbroker trainees face is the Series 7 and how to get the license. When you are hired by a brokerage firm, the brokerage firm you are joining will most likely sponsor you to take the Series 7 exam. But, what if you want to obtain the license BEFORE you get hired.

There are ways to get sponsored for the Series 7. American Investment Training published an EBook titled "How To Become a Successful Broker and Adviser" a few years ago and it has been updated several times. It covers ways you can take the exam while passively connected to a sponsoring brokerage firm - so you can take the exam. You would be responsible for the exam fees and filing fees, but you can have the Series 7 license in hand. That EBOOK can be ordered HERE: Broker Guide from American Investment Training

This can be huge in hiring opportunities for the broker. A Series 7 carries much more weight when applying for jobs. Many firms don't want to go through the waiting for a new broker to become licensed. It's just easier for them to have YOU licensed first.

The Ebook goes through all the licensing exams - not just the Series 7. Knowing how the process works and understanding the licenses and markets you can take advantage of is very important. You want to work in the securities that you feel has the best potential.

Some of the other features in guide include:

Learn all you need to know to succeed as a stockbroker
Build up your resume before you get a job
Know the financial firms to work with
Exams To Take
Best firms to operate as an independent
Markets to work in
Securities industry phone numbers
List of sponsoring national brokerage firms
Become an independent stockbroker with Series 7 Sponsorship
History and current trends in the industry
Getting sponsored for the Series 7
Full Test Outline

If time is money and sponsorship licensing is a priority for you, then you should get all the information you need before approaching firms. It can also be used for ongoing reference and use.

Broker Guide Ebook - $20 one time for life.

Tuesday, February 16, 2016

Convertible Corporate Bonds - Convertible Debentures

Some of the math - formula questions on the Series 7 and that you will need to study a little on is convertible corporate bonds. These are bonds that can be converted into common stock of the issuing corporation at a set conversion price. The exam will have you do some calculations and present scenarios.


Corporate debt that is backed by the full faith and credit of the issuing company are known as debentures. Corporate debentures are rated by companies for credit quality. You can buy investment grade or speculative bonds.

Secured corporate bonds are backed by an asset or collateral. When a bond is secured, it is backed by collateral. That collateral could be cash, securities, real estate or equipment.

Corporate bonds can be callable by the issuer. Call dates can be placed on the bond and this allows the company to redeem the bonds early beginning on set dates and at set redemption prices. This is normally not a good feature for investors, because an issue is normally called when interest rates are low - lower than your coupon rate. The main reason debentures or bonds in general are called, is because the issuer wants to refinance their debt at a lower rate. When this happens, the investor is faced with having his money (par) returned early, but the higher paying bond is no more. To make matters worse, interest rates are lower in the market, so finding a suitable replacement will be difficult, if not impossible. Callable bonds to pay a higher yield though, so for some the risk is worth it.


Some bonds issued by corporations are convertible into common stock of the issuing company. This conversion feature acts as an incentive for the bondholder. The company is hoping the investor eventually converts into the common stock of the company. The investor finds convertible corporate issues attractive, because they have an option to buy stock in the company at a fixed conversion price.

Converting a bond is based on par value and the fixed conversion price that appears on the bond. The conversion price is not the price the stock is purchased at. So, it is unlike a "Stock Option". The time to convert is the investor's choice. An example:

A customer owns ABC convertible bond that is selling in the market at $1040 or $104, the common stock is selling at $54 and the conversion price is $50. The investor would like to convert, but will only do so when the stock value is trading above the bond value. "Parity" would occur when the bond and stock are equal. The first thing you must find out is the amount of shares the customer is entitled to. We get that by dividing the conversion price into the par value of the bond ($1000). $1000 divided by 50 equally 20.

The investor can convert out of the bond into 20 shares of stock - no more no less. The stock is currently trading at $54, so the the stock value is found by multiplying 20 (shares) by $54 (stock value), which equals $1080. $1080 is above the bond selling price of $1040, so converting at this time would meet the customer's objectives of converting only when the stock value was above bond value or "above parity".

Series 7 Full Study Prep!

Toshiba -

Monday, February 15, 2016

401K plans - Understanding Defined Contribution Plans, 401 K Company Retirement Accounts

The Series 7 and other securities, adviser and principal exams will ask questions on 401k plans and retirement accounts.

401k Accounts

401 k accounts are a type of defined contribution account.

A corporate retirement plan where the employee contributes a defined amount based on earnings or other factors. It is a tax qualified retirement plan. Eventual investment and retirement value of the account may be transferred or rolled over into another corporate plan.

These are different from defined benefit set ups where the amount put in by and for the employee is packaged with years of service, salary and other factors to calculate a monthly benefit. Contribution retirement accounts are taken out, transferred or people can do a rollover.

The years of service and amount of contributions will effect the account balance and asset allocations are a factor in the performance of the investments and rate of return. This is also true in defined benefit corporate retirement plans.

Contribution plans like 401k's and group IRA accounts are much more popular than benefit arrangements nowadays. With much of the workforce employed with small business or non union type companies, the need for providing a fixed monthly benefit at retirement and calculating that benefit over time is less appealing to a company when a 401k or other employee controlled plan is easier for the company.

Many people feel it is because of the growing aspects of defined contribution plans that less people are saving enough money in their retirement accounts.

Retirement Planning Help or Questions

401 k Rollovers

401k plans have some specific rollover and transfer rules and procedures. A rollover is when money is taken out of a 401k or other qualified retirement plan and "rolled over" into another type of qualified plan. These other plans include IRA's. Each time a rollover is done out of a 401k plan, it must be completed within 60 days and the money may not be cashed or placed in another account during that time. Rollovers can only take place once a year. An account transfer does not have to follow the 401k rules and guidelines. An account transfer is when a 401k plan is moved from one brokerage firm to another. Loans may be also taken on 401k balances. Cash withdrawals are subject to the pre 59 1/2 years old IRS standard penalty of 10% on the amount withdrawn and the total amount is taxed as ordinary income for tax purposes.


The vesting period in a 401k investment account is the time the employee must fulfill their years to ne 100% vested. This means all contributions made by the company under the plan are 100% available to the person should they leave their job. The vesting period under these accounts can vary. Usually this period runs 5 years.


The securities account or investments within the 401k are varied with each plan or company. Usually, the employee will have a wide array of mutual fund or other fund choices to dedicate investment money to. The investor can change the allocation and choices in the 401k as they see fit. Rates of return and retirement value will vary with the performance of the securities in the investment account.

For employees and employers in a company contribution plan, the vesting period is an important period of time. A retirement account, like a 401k that is provided by a company (employer) is largely done as an incentive or loyalty benefit.

Being vested or 100% vested is on the part of the employee. If the employee remains with the company for a set number of years - as stated when they signed onto the plan, then the contributions made by the employer are now 100% the employee's. This vesting period can be set up a number of ways but is usually 5 years.

When the employee makes a 401k contribution, that money in the account is always 100% for the employee and would be available to the person for any rollover or job switch - as long as it is permissible for tax reasons. The amounts matched by the employer in the retirement account may only be partially under the worker's benefit to rollover or move. This depends on the vesting schedule and how long the person has remained with the company.

This vested part of the account is no all or none. An employee can be 40% vested, 70% vested etc. They do not have to be 100% to gain some of the company contributions made into the retirement account.

The period is not a long time for most employees and it is only fair for a company to have a set period of stay before the money the business has contributed to you is 100% yours. Filling this period of time is a normal part of 401k retirement account planning.

Wednesday, February 10, 2016

Covered Call Writing, Examples and Call Option Strategy

Writing covered calls is the process of shorting a call option - usually to generate income, while owning the stock that is the same as the stock on the call option. The term "covered" means that if the Option is exercised, the investor engaged in this strategy has the stock to meet the obligation - which is the delivery of shares of stock that the short call requires.

That is a mouthful!  It is best - and easier to understand covered call strategies by using examples.

If we set up a position, we can examine the thought process behind it and thus be able to understand and figure the gain. loss and break-even figures.

First, there are terms that mean the same thing.  This will make it easier when you are reading or listening to covered call strategies or any option strategy.



An Investor (trader) has set up the following position. *These positions do not have to be set up simultaneously. The stock position can be established before or after the option contract.

LONG 100 Shares DFG @ 68
SHORT 1 DFG APR 75 Call @ 3.50

This is a covered call strategy. The investor bought 100 shares of the stock at $68. The purpose of the call option contract is to support the stock. The option is not the main focus or investment liability. "APR" means April and is the expiration month. This contract will expire worthless if it is not bought back or exercised before April.

Selling or shorting calls with stock is mainly done to generate income. The $350 received by the trader is immediate income. It also lowers total cost on this combined position. Before an option was established, the stock's cost and break-even (disregarding unknown commissions and ticket charges etc) was 68. However, the option lowers that cost and break-even to 64.50. This investor has a net outlay of $6,450 or a break-even of 64 1/2. 

The call allows for the stock to drop 3 1/2 points and the investor is still OK. Any drop below that and the position is losing money. Writing calls is not a strategy for protecting the stock. You cannot protect a stock by shorting options. That is not the purpose here. If the person bought a PUT - then it is protected, but it would not produce income. Only "selling" gives income and only "buying" protects. Never both.

Important to remember: If a call is exercised before the expiration it means the shorter must sell or deliver 100 shares of the stock (per contract) at the strike price to satisfy the obligation. In this case, the price that must be met is 75.

Since the stock can theoretically drop to 0, the entire value of the net position is at risk. So the maximum loss here is the full value of $6450. 

The maximum gain is "limited" while the option is hanging out there. An option can be exercised at any point, but it is most likely going to happen in a rising market. The Call holder is the boss and decision maker. Owning a call gives that person the right to own the stock at the strike price of 75. Obviously if the price falls to 65, 60 or any price that is well below the market vs. the strike price, the trader owning the option will not be interested in buying the stock at 75 as it says on the contract. Buy Low, Sell High always applies. Thus, ALL CALL OPTIONS are most likely to get exercised when the market rises. 

Given that fact, the maximum gain in the example above is "capped". Normally a person owning shares would have an unlimited gain potential, but since this option carries an obligation to sell it at 75, the gain starts with the difference between stock cost (68) and strike price (75), which is $700 PLUS the $350 premium received. The Maximum gain is $1050.

If the option expires, and the stock then rises substantially, the trader wins all around. He keeps the premium and the stock now has an unimpeded rise potential indefinitely for as long as he holds the stock.

Covered call writing is usually initiated when an investor feels the stock will hover within a trading range, or even drop some and writing a call gives him income during that period.

I hope that helps your understanding of Covered Calls.

Feel free to post questions, and visit American Investment Training for more resources including Broker Exam Training Courses

American Investment Training (AIT)

Pearson Education (myPEARSONstore)

Thursday, February 4, 2016

Understanding Mutual Funds - Open End Funds, Series 6, Series 7

Mutual Funds are also called Open End Funds. Open Ended funds trading hours are open once the trading exchange is but when shares are bought, the price you pay will be decided at the end of the trading day. Stock trades are completed at any time during the day.

This subject is tested on the Series 6 and Series 7 exam. For those taking these licensing tests, you need to study this section. Percentage wise, there are more questions on the Series 6 than the Series 7.

Mutual Funds trade like this because you are basically buying new shares. The exception would be Exchange Traded Funds or ETF's and closed end funds which do trade during the day.

Stock Market Hours and Funds

Once the stock market opens, shares are traded and the investor will pay a commission on the trade, whether it is a buy or a sell.

Mutual funds that have blue chip stocks, penny stocks, bonds or a mix in their portfolio is still considered an open end fund and the price will not be set until all the securities have settled their value at the end of the day. There are also other price consideration issues such as:

Sales Charge - what the fund charges to buy or perhaps when sold. There are also no-load funds where a sales fee is not charged.

Redemption Fee - Some open end mutual funds will charge a fee to redeem the shares of the fund. Many times this fee is in place when the buying sales charge is low or there is no sales charge going in.

Expenses and the fact that the prices are set at the end of the trading hour day make open ended funds poor choices for active or day trading. Exchange traded - ETF's or closed end funds trade as the day goes and completed with "at the market" prices at the time of buying and selling.  There are many choices of mutual funds in all sectors but they do not trade like a stock.

For the Series 6 exam and Series 7 Exam - those looking to become brokers and advisers

You will get a percentage of questions on mutual funds, Net Asset Value (the value per share), the Public Offering Price, Calculating sales charge and more. The Series 6 will have the greater percentage because you cannot sell stocks with a Series 6. You need a Series 7 License.

Other terms related to mutual funds:
Day Trader Fund
Mutual Funds Penny Stocks
When Do Funds Trade
Fractional Shares
Stock Market Funds


Wednesday, February 3, 2016

Series 66 Investment Adviser with your Series 7

For people who are already licensed Series 7 but need to get their Investment Adviser license and need the Series 63 (Uniformed State Law), should take the Series 66 vs. the Series 65 and 63 separately.

The reason is the combined license (66) is a simpler exam than the 65 and it dual-covers you. This option is only available to those who are already Series 7 Licensed.  The North American Securities Administrators Association (NASAA) is the governing body that overseas the 66. Though the test is taken at exam centers through FINRA.

IMPORTANT NOTE:  The SERIES 7 is NOT required to take the SERIES 66. So, you can begin studying and sit for the 66. But, the 7 is ultimately required to have your 66 active.

The combined Investment Adviser exam contains 100 questions and like all FINRA - NASAA exams, it is multiple choice delivered at hundreds of test centers throughout the world.

Once you begin studying, you can open a test window for 120 days. This means you have 120 days to take the exam under your registration. An exam fee is required. For the Series 66 it is $155 (as of January 2016). The "window" period is the same for all Series Exams, including the Series 7.


The Series 65 or 66 allows a person to charge clients for fees or assets under management. This is not the same as charging a client a commission or mark up on transactions. It is serious violation to charge a customer for fees and commission on transactions. However, a Series 7 broker who is also licensed as a registered investment adviser CAN have a book of clients that include FEE BASED management and COMMISSION BASED for other clients.

TO PASS THE SERIES 66 you should begin a consistent study program. American Investment Training recommends 2-4 weeks of study time - roughly 2 hours daily. Accurate practice exams are HUGELY important when preparing for this test. The Series 66 contains mostly rules, regulations and customer accounts. Since these areas do change periodically, you want to make sure the study material is current.

We have provided the best options to pass this exam FAST. All material is up to date and carry "exam tough" practice questions. We don't want you to be surprised or under-prepared.

TIME IS MONEY!   Learn your way to FEE based income. PASS the Series 66 now.

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