An investor buys 1 ABC 40 call at 6 and sells 1 ABC 50 call at 2. What is the breakeven?

This is a debit call spread. Net debit is 4, so breakeven is the lower strike plus net debit: 40 + 4 = 44.

Using a 40/50 debit call spread established for a net debit of 4, what is the maximum gain?

Maximum gain on a debit spread equals the strike difference minus the net debit. The spread is 10 points wide, so 10 - 4 = 6 points, or $600.

A customer sells 1 XYZ 50 put at 5 and buys 1 XYZ 45 put at 2. What is the maximum gain?

This is a credit put spread. Maximum gain is the net credit received: 5 - 2 = 3 points, or $300.

A customer buys a call and a put on the same stock with the same strike and expiration. What market expectation best fits this long straddle?

A long straddle uses two purchased options and benefits from a large move either up or down. The risk is losing both premiums if the stock stays near the strike.

What is a major risk of a short straddle?

A short straddle receives premiums but is exposed if the stock makes a large move. The short call side can create unlimited upside risk.

A customer owns 100 shares and writes 1 call. If assigned, what must the customer generally do?

A short call writer has the obligation to sell stock at the strike price if assigned. The owned shares cover that delivery obligation.

A customer buys stock at 50 and buys a 50 put for 3. What is the breakeven?

For long stock plus a long put, breakeven is stock cost plus put premium. The protection costs 3, so breakeven is 53.

A customer owns stock, buys a protective put, and writes a covered call. What is this position commonly trying to do?

A collar combines long stock, a protective put, and a covered call. It can limit downside while also capping upside because of the short call.

A customer is short 1 XYZ 30 put. If assigned, what is the customer's obligation?

A short put writer has the obligation to buy stock at the strike price if assigned. Put assignment means stock can be put to the writer.

A conservative income investor with limited options experience asks to write uncovered calls. What is the primary issue?

Uncovered call writing can expose the customer to unlimited loss as the stock rises. Limited experience and conservative risk tolerance make suitability a major concern.

PassSeries7Series 7 exam prep

Free test Study guide Pricing

Public advanced options drill

Series 7 Advanced Options Practice Questions

Use these public sample questions after basic calls, puts, and breakevens are comfortable. The set emphasizes spreads, straddles, stock-plus-option hedges, assignment, and suitability. These are educational examples, not actual FINRA exam questions.

Start the topic drill Take mixed diagnostic

10 public questions

Explanations in HTML

No account required

Topic summary

Advanced options questions are still mechanical if you name each leg, net the premiums, identify debit or credit, and then check the customer's purpose. Do not let strategy names replace the math.

Every question, answer choice, correct answer, and explanation on this page is public sample content. The private PassSeries7 mapped bank remains protected inside the paid product.

Common traps

Calculating spread breakeven before identifying debit or credit.
Forgetting that short options create assignment obligations.
Confusing straddle volatility expectations with directional stock opinions.
Choosing an options strategy that fits the math but not the customer.

Public advanced options sample questions

0 of 10 answered

Select an answer for instant feedback.

Question 1 / 10
Advanced options
An investor buys 1 ABC 40 call at 6 and sells 1 ABC 50 call at 2. What is the breakeven?
Answer choices for question 1
Show answer and explanation
Correct answer: 44
Explanation: This is a debit call spread. Net debit is 4, so breakeven is the lower strike plus net debit: 40 + 4 = 44.
Related: Debit spread breakeven
Question 2 / 10
Advanced options
Using a 40/50 debit call spread established for a net debit of 4, what is the maximum gain?
Answer choices for question 2
Show answer and explanation
Correct answer: $600
Explanation: Maximum gain on a debit spread equals the strike difference minus the net debit. The spread is 10 points wide, so 10 - 4 = 6 points, or $600.
Related: Spread max gain
Question 3 / 10
Advanced options
A customer sells 1 XYZ 50 put at 5 and buys 1 XYZ 45 put at 2. What is the maximum gain?
Answer choices for question 3
Show answer and explanation
Correct answer: $300
Explanation: This is a credit put spread. Maximum gain is the net credit received: 5 - 2 = 3 points, or $300.
Related: Credit spreads
Question 4 / 10
Advanced options
A customer buys a call and a put on the same stock with the same strike and expiration. What market expectation best fits this long straddle?
Answer choices for question 4
Show answer and explanation
Correct answer: Large move in either direction
Explanation: A long straddle uses two purchased options and benefits from a large move either up or down. The risk is losing both premiums if the stock stays near the strike.
Related: Straddles
Question 5 / 10
Advanced options
What is a major risk of a short straddle?
Answer choices for question 5
Show answer and explanation
Correct answer: Large loss if the stock moves sharply
Explanation: A short straddle receives premiums but is exposed if the stock makes a large move. The short call side can create unlimited upside risk.
Related: Options risk
Question 6 / 10
Advanced options
A customer owns 100 shares and writes 1 call. If assigned, what must the customer generally do?
Answer choices for question 6
Show answer and explanation
Correct answer: Sell 100 shares at the strike price
Explanation: A short call writer has the obligation to sell stock at the strike price if assigned. The owned shares cover that delivery obligation.
Related: Options assignment
Question 7 / 10
Advanced options
A customer buys stock at 50 and buys a 50 put for 3. What is the breakeven?
Answer choices for question 7
Show answer and explanation
Correct answer: 53
Explanation: For long stock plus a long put, breakeven is stock cost plus put premium. The protection costs 3, so breakeven is 53.
Related: Protective put
Question 8 / 10
Advanced options
A customer owns stock, buys a protective put, and writes a covered call. What is this position commonly trying to do?
Answer choices for question 8
Show answer and explanation
Correct answer: Create a collar around the stock position
Explanation: A collar combines long stock, a protective put, and a covered call. It can limit downside while also capping upside because of the short call.
Related: Hedging stock
Question 9 / 10
Advanced options
A customer is short 1 XYZ 30 put. If assigned, what is the customer's obligation?
Answer choices for question 9
Show answer and explanation
Correct answer: Buy 100 shares at 30
Explanation: A short put writer has the obligation to buy stock at the strike price if assigned. Put assignment means stock can be put to the writer.
Related: Options assignment
Question 10 / 10
Advanced options
A conservative income investor with limited options experience asks to write uncovered calls. What is the primary issue?
Answer choices for question 10
Show answer and explanation
Correct answer: Unlimited loss potential and poor suitability fit
Explanation: Uncovered call writing can expose the customer to unlimited loss as the stock rises. Limited experience and conservative risk tolerance make suitability a major concern.
Related: Options suitability

Topic score

0/10

Answer every question for a topic score.

Use this topic drill as a warmup. For a mixed-topic routing signal, take the free diagnostic and request the missed-topic study plan after your score appears.

Take the free Series 7 diagnostic See pricing

Related Series 7 resources

Take the free Series 7 diagnostic
Get an instant score, missed topics, and an optional missed-topic study plan.
Review Series 7 options formulas
Rebuild max gain, max loss, and breakeven before advanced drills.
Drill basic Series 7 options questions
Review calls, puts, and simple strategy math first.
Options assignment glossary
Review short-option obligations before assignment questions.
Protective put glossary
Review stock-plus-put hedge logic.
Series 7 study guide 2026
Review the public chapter outline before you drill more questions.
Preview the options chapter
Use the public chapter preview for spreads, straddles, hedges, and taxation.
See PassSeries7 pricing
Unlock the full textbook, flashcards, mapped practice, and exam simulation.
Review the Series 7 study guide
Use the public chapter outline to decide what to read before the next topic drill.

Get a mixed-topic routing signal

Topic drills are useful, but the real exam switches topics constantly. Take the free Series 7 diagnostic when you want an instant mixed score and an optional missed-topic study plan sent through the existing diagnostic funnel.

Get your missed-topic study plan Unlock the full product