Exam Overview
The Series 7 (General Securities Representative Qualification Exam) is the flagship FINRA license. Passing it, combined with the SIE co-requisite, authorizes you to sell the full range of securities products — equities, bonds, options, mutual funds, variable annuities, DPPs, and more.
| Exam Detail | Series 7 |
|---|---|
| Questions (scored / total) | 125 scored + 5 unscored = 130 total |
| Time Limit | 225 minutes (3 hours 45 minutes) |
| Passing Score | 72% (90 out of 125 scored questions) |
| Exam Fee | $395 |
| Co-requisite | SIE exam (can take in either order) |
| Firm Sponsorship | Required (associated with FINRA member firm) |
| Retake Waiting Period | 30 days after 1st/2nd fail; 180 days after 3rd fail |
What You Must Know: The Non-Negotiables
These topics appear on every administration and require calculation fluency — not just conceptual familiarity.
Options — Every Strategy, From First Principles
| Position | Breakeven | Max Gain | Max Loss |
|---|---|---|---|
| Long call | Strike + premium | Unlimited | Premium paid |
| Short call | Strike + premium | Premium received | Unlimited |
| Long put | Strike − premium | Strike − premium | Premium paid |
| Short put | Strike − premium | Premium received | Strike − premium |
| Covered call | Stock cost − premium | Strike − effective basis | Effective basis |
| Protective put | Stock cost + premium | Unlimited | Strike − (stock cost + premium) |
| Long straddle | Strike ± total premium | Unlimited (up) | Total premium |
| Bull call spread | Lower strike + net debit | Width − net debit | Net debit |
| Bear put spread | Higher strike − net debit | Width − net debit | Net debit |
You must be able to calculate all of these from a scenario description, not just from a table. Practice until you can work through any options question in under 90 seconds.
Margin T-Accounts
Long account: Equity = CMV − Debit balance. Restricted when equity < 50% of CMV. Maintenance call when equity < 25% of CMV. Call amount = Required equity − Actual equity. Minimum CMV before call = Debit ÷ 0.75.
SMA: Excess equity above the 50% Reg T requirement. Buying power = SMA × 2. SMA can be withdrawn as cash.
Short account: Equity = Credit balance − SMV. Maintenance call when equity < 30% of SMV. Rising stock price hurts the short seller — SMV increases, equity decreases.
PDT: $25,000 minimum equity, 4:1 intraday buying power, 2:1 overnight.
Municipal Securities Key Formulas
Taxable Equivalent Yield (TEY): TEY = Muni yield ÷ (1 − tax rate). Example: 3.8% muni for a 37% bracket investor: 3.8% ÷ 0.63 = 6.03% TEY. Munis are suitable for high-bracket investors. Munis in IRAs are unsuitable — the tax exemption is redundant.
Flow of Funds (revenue bonds): O&M → Debt Service → Debt Service Reserve → Renewal & Replacement → Surplus. This order is directly tested.
MSRB enforcement: MSRB writes the rules but has no enforcement authority. FINRA enforces for broker-dealers; the SEC enforces for municipal advisors.
Tax Treatment
Wash sale: Loss disallowed if substantially identical securities purchased within 30 days before OR after the sale (61-day total window). Disallowed loss adds to the new shares’ cost basis — not permanently lost, just deferred.
Capital gains netting: Short-term gains and losses net against each other. Long-term gains and losses net against each other. If one side has a net gain and the other a net loss, they offset. Up to $3,000 net capital loss deductible against ordinary income per year; excess carried forward.
LTCG rates: 0% (10–12% bracket), 15% (most investors), 20% (highest earners). Holding period: must hold more than 12 months.
8-Week Study Plan
| Week | Focus | Goal |
|---|---|---|
| 1 | Equity securities, corporate bonds, debt fundamentals | Understand product types, yield hierarchy, convertible bond parity |
| 2 | Treasuries, agencies, municipal securities (GO bonds) | TIPS phantom income, GNMA vs. FNMA/FHLMC, GO bond analysis |
| 3 | Municipal securities (revenue bonds), CMOs, 529/ABLE | Flow of funds, TEY calculations, CMO tranche types |
| 4 | Packaged products, DPPs, REITs, hedge funds, retirement | NAV/POP, variable annuity mechanics, at-risk rules, REIT 90% distribution |
| 5 | Options — all positions, covered calls, protective puts | Calculate breakeven, max gain, max loss for every basic strategy |
| 6 | Options spreads and straddles, index options, margin | Complete spread P&L analysis; full long and short T-accounts |
| 7 | Suitability/Reg BI, order types, settlement, tax, F1 & F4 | Wash sale calculations, prohibited practices, SIPC, arbitration rules |
| 8 | Practice exams only | 3–4 full-length timed exams. Review every miss. Target 80%+. |
Five Rules That Separate Passing From Failing
1. Work through calculations, don’t just read about them. Options breakevens, margin T-accounts, and TEY formulas look simple when you read an explanation. They become tricky under exam conditions when the scenario is reversed or layered. Work through dozens of examples until the mechanics are automatic, not just familiar.
2. Take timed practice exams early and often. Don’t save practice exams for the end. Start full-length timed exams after Week 3 or 4. Early exams reveal gaps before they compound. Candidates who only study content and take practice exams the week before exam day are not prepared for the pacing challenge.
3. Review every missed question, not just the ones you almost got right. When you miss a question, you need to understand: (a) what concept was being tested, (b) why the right answer is right, and (c) why each wrong answer is wrong. This process takes more time than just noting the correct answer — but it’s the only process that actually closes knowledge gaps.
4. Master options and municipals before scheduling. These two topics decide most outcomes. If you can’t work through a bull call spread P&L table from first principles, or calculate TEY for an investor in a specific tax bracket, you are not ready to schedule the exam.
5. Aim for 80%+ on practice exams, not 72%. The 72% passing threshold sounds achievable. But exam-day conditions — unfamiliar question phrasing, time pressure, 225 minutes of sustained focus — typically reduce performance by 3–7 points versus practice. An 80%+ practice average gives you the buffer to absorb that drop and still pass.
Free Resources to Use Now
The free Series 7 course covers all 30 sub-topics across 4 FINRA functions, with concept checks, worked calculation examples, and Exam Essentials summaries on every chapter. Our Series 7 cheat sheet puts every formula, threshold, and time rule on one page. The Series 7 practice suite (11 exams + 5,800+ QuizBuilder questions) starts at $2 per exam — the full package is $45.
No account required for the course. No subscription for the exams. Start where you are and build from there.