DEFINITION of 'Series 42'

An exam offered by the Financial Industry Regulatory Authority (FINRA) for financial professionals seeking to become licensed options representatives for a FINRA-member broker/dealer or principal.

The test consists of 50 questions taken over 1.5 hours, and a score of 70% or better is required for passing. Test questions cover the taker's knowledge of options terminology, trading strategies, handling of customer accounts, settlement practices, record-keeping, and overall broker conduct. The Series 42 has a corequisite of either the Series 62 or the Series 72 license.


Unlike some of the other exams that test broader sets of knowledge, the Series 42 is all about options, specifically listed options that trade on national exchanges like the Chicago Board Options Exchange (CBOE). Derivative contracts like stock options come with their own lexicon, which is completely different than that found in stock or bond trading. People seeking to become licensed options principals and supervise other registered representatives or a branch office must take and pass the Series 4, which has the Series 7 exam as a prerequisite.

  1. Series 7

    A general securities registered representative license administered ...
  2. Series 51

    An exam offered by the Financial Industry Regulatory Authority ...
  3. Series 24

    A securities license entitling the holder to supervise and manage ...
  4. Series 55

    The Series 55 is an exam and license that entitles the holder ...
  5. Series 23

    An exam offered by the Financial Industry Regulatory Authority ...
  6. Series 14

    An exam administered by the Financial Industry Regulatory Authority ...
Related Articles
  1. Financial Advisor

    Breaking Down Financial Securities Licenses

    Find out which exam you need to begin your career as an investment professional.
  2. Personal Finance

    The Series 79 Exam: What It Is And When You Need It

    If you're getting into the field of investment banking, you'll need to know all about the Series 79.
  3. Financial Advisor

    Introduction To The Series 65 Exam

    The Series 65 is required in many states in order to be a fee-based advisor. Find out what it is and whether you need it.
  4. Financial Advisor

    Sell-Side Analysts Need Series 86/87 Exams

    Though these tests are not particularly difficult or comprehensive, passing them is mandatory to work as a sell-side analyst.
  5. Financial Advisor

    Should You Add A Securities License To Your Qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.
  6. Insights

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  7. Financial Advisor

    How Hard are the CFA Exams?

    Learn about the difficulty of the CFA exams with a description of the tests, some statistics on pass rates and suggestions that can help you pass the exams.
  8. Financial Advisor

    Series 63 Exam Prep: The Broker-Dealer

    Before you take the series 63, you need to understand jurisdiction and how it affects broker-dealers.
  9. Personal Finance

    Prepare For Your CFA Exams

    Find out how to get yourself ready for these lengthy and often daunting exams.
  10. Personal Finance

    What To Do If You Failed Your CFA Exam

    Follow these steps to increase your odds of passing your next CFA exam.
  1. What are the differences between the Series 6 exam and the Series 7 exam?

    Learn about the regulatory exams needed to become a registered representative and the main differences between the Series ... Read Answer >>
  2. What certification series does one need to be a bond broker?

    One major requirement before one can become a bond broker is to pass the General Securities Representative Exam, commonly ... Read Answer >>
  3. Where do I take the Series 63 examination?

    Find out where to take the Series 63 examination for securities agents, and learn more details about the test's purpose and ... Read Answer >>
  4. Are series 63 exams given outside of the United States?

    Learn more about the series 63 exam, and find out about testing locations and citizenship requirements. Discover which materials ... Read Answer >>
  5. Do I need a class to take the Series 63 exam?

    Learn more about the educational requirements for the Series 63 and what candidates should study. Find out more about NASAA ... Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Liquidity

    Liquidity is the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's ...
  3. Federal Funds Rate

    The federal funds rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve ...
  4. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  5. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  6. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
Trading Center