Lessons are read aloud by your device's built-in voice. On iPhone and Mac, enhanced voices in Settings → Accessibility → Spoken Content sound the most natural.

Read the lessons

Prefer to read? Here is the full text of every lesson, chapter by chapter.

Chapter 1: The Series 7 Exam and How to Pass It

The Series 7 has 125 scored questions and five unscored pretest questions, and you have three hours and forty-five minutes. The passing score is seventy-two. You need a sponsoring firm, which enrolls you by filing Form U4, and you must also pass the SIE. Most states will also require the Series 63. Function three, products and recommendations, is ninety-one of the 125 questions, so give it most of your study time. On exam day, budget about a minute and forty-five seconds per question, mark anything that takes longer than two minutes, and come back to it. There is no penalty for guessing, so never leave a question blank. For EXCEPT and NOT questions, test each choice as true or false and pick the one that is false. For BEST and MOST questions, start with the customer's objective, time horizon and risk tolerance. Finally, aim for eighty percent on full, timed practice exams before you sit for the real one.

Chapter 2: Prospecting, Communications and New Issues

FINRA sorts communications into three groups. Correspondence goes to twenty-five or fewer retail investors in thirty days. Retail communications go to more than twenty-five, and they need a principal's approval before use. Institutional communications go only to institutions. Static social media, like a profile, is a retail communication; interactive posts are supervised like correspondence. Cold calls are allowed from eight in the morning to nine at night in the called person's time zone, and do-not-call requests last five years. For new issues, the cooling-off period lasts at least twenty days. During it you may hand out the preliminary prospectus and take indications of interest, but you may not sell or take money. In a firm commitment the underwriter bears the risk; in best efforts the issuer does. Under Rule 144, restricted stock of a reporting company is held six months, and affiliates are limited to the greater of one percent of outstanding shares or four weeks of average weekly volume in any ninety days. Rule 5130 keeps restricted persons, such as broker-dealer employees, out of equity IPOs, and Rule 5131 bans spinning.

Chapter 3: Opening and Managing Customer Accounts

Every account starts with a new account form and a principal's approval. Under the Customer Identification Program you verify identity and check the OFAC list. Make a reasonable effort to get a trusted contact person, someone the firm can call about exploitation or the customer's health. Regulation Best Interest has four parts: disclosure, care, conflict of interest and compliance, and Form CRS goes to retail customers at the start. In joint tenancy with right of survivorship, the survivor gets the account; in tenancy in common, the deceased's share goes to the estate. Custodial accounts have one custodian and one minor, gifts are irrevocable and margin is not allowed. Discretion over the asset, the action or the amount needs written authority and a principal's approval, but time and price alone does not. For anti-money laundering, remember the three stages: placement, layering and integration. Currency transactions over ten thousand dollars need a CTR, suspicious activity of five thousand or more needs a confidential SAR, and splitting deposits to dodge reporting is structuring, a crime of its own.

Chapter 4: Retirement and Education Accounts

For 2026, the IRA limit is seventy-five hundred dollars, plus an eleven-hundred-dollar catch-up at age fifty. The 401(k) limit is twenty-four thousand five hundred, plus eight thousand at fifty, or eleven thousand two hundred fifty at ages sixty through sixty-three. Withdrawals before fifty-nine and a half are taxed and usually carry a ten percent penalty. Required minimum distributions start at seventy-three. Roth IRAs are funded with after-tax dollars, have income limits, no lifetime distributions, and qualified withdrawals are tax-free after five years and age fifty-nine and a half. An indirect rollover must be finished in sixty days, and employer plans withhold twenty percent, which a direct rollover avoids. SEP-IRAs are employer-funded; SIMPLE IRAs carry a twenty-five percent penalty in the first two years. 403(b)s are for schools and nonprofits, and 457s are for state and local governments. For education, 529 plans have no federal annual limit, can pay up to twenty thousand a year for K through twelve tuition, and allow a five-year gift election. Coverdell accounts are limited to two thousand dollars a year.

Chapter 5: Equity Securities

Outstanding shares are issued shares minus treasury stock. Treasury stock has no vote and gets no dividends. Under statutory voting you cast one vote per share for each seat; under cumulative voting you multiply shares by seats and can put them all on one candidate, which helps small holders. The board sets the record date, and with T plus one settlement the ex-dividend date is the same day as the record date. Preferred stock pays a fixed dividend, a percentage of one hundred dollars par. Cumulative preferred makes up missed dividends before common holders get anything. To find a conversion ratio, divide par by the conversion price; parity means the convertible and the stock are worth the same. Rights are short-term and priced below the market; warrants are long-term and priced above it. ADRs let you own foreign companies in dollars, but they carry currency risk.

Chapter 6: Debt Securities: Prices, Yields and Risks

Bonds are quoted as a percentage of one thousand dollars par, so one point is ten dollars and one basis point is one hundredth of a percent. Current yield is annual interest divided by price. For a discount bond, the yields climb: nominal, then current, then yield to maturity, then yield to call. For a premium bond, they fall in the same order, and you quote the lower of yield to call and yield to maturity. When rates rise, bond prices fall, and the longest maturities and lowest coupons move the most. Duration measures that sensitivity: price change is about duration times the change in yield, with the sign reversed. Issuers call bonds when rates fall; puttable bonds protect holders when rates rise. Accrued interest runs from the last payment date up to, but not including, settlement, on a thirty-day month, three-hundred-sixty-day year for corporates and munis. BBB minus is the lowest investment grade, and a normal yield curve slopes upward.

Chapter 7: Corporate Debt and Money Market Instruments

Secured bonds are backed by collateral: mortgage bonds by real estate, equipment trust certificates by equipment, and collateral trust bonds by securities. Debentures are unsecured, and subordinated debentures rank behind them. In liquidation the order is secured creditors, unsecured creditors, subordinated debt, preferred stock, then common stock. The Trust Indenture Act requires an indenture and an independent trustee for public corporate debt. High-yield bonds pay more because default risk is higher. Convertible bonds pay lower coupons in exchange for the conversion feature, and their prices follow the stock when it is near parity. The money market holds high-quality debt maturing in a year or less: Treasury bills, commercial paper maturing in two hundred seventy days or less, negotiable CDs of a hundred thousand dollars or more, banker's acceptances used in trade, repurchase agreements and Eurodollars.

Chapter 8: U.S. Government, Agency and Mortgage-Backed Securities

Treasury bills mature in up to fifty-two weeks and are sold at a discount. Notes run two to ten years, and bonds twenty or thirty, and both are quoted in thirty-seconds. So ninety-nine dash sixteen means ninety-nine and a half percent of par. Treasury interest is taxed federally but not by states. STRIPS are zero-coupon Treasuries, and holders owe tax each year on interest they don't receive. TIPS adjust principal for inflation. Ginnie Mae securities carry the full faith and credit of the government; Fannie Mae and Freddie Mac do not. Mortgage pass-throughs pay monthly principal and interest. When rates fall, prepayments speed up; when rates rise, they slow, which is extension risk. In CMOs, planned amortization class tranches have the most predictable cash flows, companion tranches absorb the most risk, interest-only tranches gain when rates rise, and principal-only tranches gain when rates fall.

Chapter 9: Municipal Securities

General obligation bonds are backed by taxing power and usually need voter approval; analysts look at the tax base, debt per person and overlapping debt. Revenue bonds are backed by the facility they finance, so the feasibility study, the rate covenant and debt service coverage matter most. A mill is one dollar per thousand of assessed value. Municipal interest is free of federal tax, usually free of tax in the issuer's own state, and bonds from territories like Puerto Rico are exempt everywhere. Tax-equivalent yield is the municipal yield divided by one minus the tax rate. Premiums on munis are amortized with no deductible loss, and original issue discount is tax-exempt. Notes include TANs, RANs and BANs. Competitive deals go to the lowest true interest cost. Eastern syndicates are undivided, Western syndicates are divided, and orders are filled presale, group net, designated, then member. The MSRB writes the rules but doesn't enforce them, trades are reported within fifteen minutes, and documents live on EMMA.

Chapter 10: Investment Companies: Mutual Funds, ETFs and UITs

Open-end funds sell and redeem shares continuously at net asset value, and orders get the next price computed, which is called forward pricing. The public offering price is NAV divided by one minus the sales charge, and the sales charge can't exceed eight and a half percent. Breakpoints lower the charge on larger purchases; a letter of intent covers thirteen months and can be backdated ninety days, and rights of accumulation count your existing holdings. Recommending a purchase just below a breakpoint is a violation. Class A shares have a front-end load, Class B a declining back-end charge, and Class C a level load. Closed-end funds trade on exchanges at a premium or discount, ETFs trade all day and can be shorted, and ETNs are unsecured notes with the issuer's credit risk. Fund distributions are taxable even when reinvested, and capital gains distributions are always long-term.

Chapter 11: Variable Annuities and Insurance-Based Products

In a variable annuity, the owner bears the investment risk in the separate account, so the product is both a security and an insurance contract. During accumulation you own accumulation units; at annuitization they become a fixed number of annuity units whose value changes. Payments rise when returns beat the assumed interest rate and fall when they lag it. Life-only pays the most each month; joint and last survivor pays the least. Contributions to a non-qualified annuity are after-tax, earnings come out first and are taxed as ordinary income, and a ten percent penalty applies before fifty-nine and a half. A 1035 exchange moves one annuity into another tax-free. Under Rule 2330, a principal reviews deferred variable annuity sales within seven business days, with special attention to surrender charges, older customers and frequent exchanges. Variable life policies allow loans of at least seventy-five percent of cash value after three years.

Chapter 12: Direct Participation Programs, REITs and Alternative Investments

Limited partnerships pass income and losses straight to investors. The general partner manages and has unlimited liability; limited partners are passive and can lose only what they invest. Losses are passive and can offset only passive income. Real estate programs range from existing properties, the safest, to raw land, the most speculative. Oil and gas programs range from income programs to exploratory wildcat drilling, and they offer intangible drilling cost and depletion deductions. The biggest drawback of any partnership is that it's hard to sell. REITs must pay out at least ninety percent of taxable income; they pass through income but not losses, and non-traded REITs can be very illiquid. Hedge funds and private equity are sold privately to accredited investors and often lock up money for years. Structured products depend on the issuer's credit, even when they promise principal protection.

Chapter 13: Options I: Fundamentals and Basic Strategies

A call gives the buyer the right to buy, and a put gives the buyer the right to sell. Sellers take on the obligations. Call buyers and put sellers are bullish; put buyers and call sellers are bearish. Remember: calls up, puts down. A call's breakeven is the strike plus the premium; a put's is the strike minus the premium. A call is in the money when the stock is above the strike, and a put when it's below. Time value is the premium minus intrinsic value. Buyers can lose only the premium; a naked call writer has unlimited risk. To protect a stock you own, buy a put. To earn income on it, write a covered call. To protect a short sale, buy a call. Equity options are American-style, and exercises settle T plus one in shares. The OCC assigns exercise notices to firms at random.

Chapter 14: Options II: Spreads, Straddles, Index Options and Rules

A spread is buying one option and selling another of the same type. If you paid, it's a debit spread, and you want the premiums to widen. If you were paid, it's a credit spread, and you want the options to expire. For call spreads, breakeven is the lower strike plus the net premium; for put spreads, the higher strike minus it. A long straddle, a call and a put at the same strike, profits from a big move either way; a short straddle profits from no move but has unlimited risk. Index options settle in cash, and portfolio managers buy index puts to hedge market risk. The number of contracts is portfolio value times beta, divided by the index level times one hundred. The options disclosure document is delivered at or before approval, a principal approves the account, and the customer returns the signed agreement within fifteen days.

Chapter 15: Economics, Investment Analysis and Portfolio Management

The business cycle moves through expansion, peak, contraction and trough. Building permits and stock prices lead the economy, industrial production moves with it, and the duration of unemployment lags it. The Federal Reserve runs monetary policy: buying securities and lowering rates eases, and selling securities and raising rates tightens. Congress and the President run fiscal policy through taxes and spending. In fundamental analysis, the current ratio is current assets over current liabilities, the quick ratio leaves out inventory, and the price-earnings ratio is price over earnings per share. Technical analysts watch support, resistance and trends. Diversification removes company-specific risk but not market risk. Beta measures volatility against the market, alpha measures outperformance, and the Sharpe ratio measures return per unit of risk. Real return is the nominal return minus inflation.

Chapter 16: Taxation of Investments

Gains on assets held more than a year are long-term and taxed at zero, fifteen or twenty percent; shorter holdings are taxed as ordinary income. Net capital losses can offset three thousand dollars of ordinary income a year, with the rest carried forward. Your cost basis includes reinvested distributions. Inherited assets step up to their value at death. Gifts keep the donor's basis, unless the value is lower than the basis and you sell at a loss. If you don't identify shares, the IRS assumes first in, first out. A wash sale happens when you buy the same security within thirty days before or after a loss sale; the loss is disallowed and added to the new shares' basis. In 2026 you can give nineteen thousand dollars per person without filing a gift tax return, and the lifetime exemption is fifteen million. The net investment income tax adds three point eight percent for higher earners.

Chapter 17: Margin Accounts

Regulation T, set by the Federal Reserve, requires fifty percent down, and FINRA requires at least two thousand dollars of equity. In a long account, long market value minus the debit balance equals equity. In a short account, short market value plus equity equals the credit balance. Maintenance is twenty-five percent for long accounts and thirty percent for short stocks above five dollars. A long account gets a call when market value falls below the debit divided by point seven five; a short account, when market value rises above the credit divided by one point three. Excess equity above fifty percent creates SMA, a line of credit that doesn't shrink when prices fall. Buying power is twice the SMA. Selling stock adds half the proceeds to SMA. An account between twenty-five and fifty percent equity is restricted. Since June 4, 2026, FINRA's intraday margin standards have replaced the pattern day trader rule and its twenty-five-thousand-dollar minimum.

Chapter 18: Orders, Trading, Settlement and Confirmations

A firm acting as agent charges a commission; acting as principal, it charges a markup or markdown, based on the prevailing market price. The five percent markup policy is a guideline, not a hard limit. Buy limits and sell stops sit below the market, and sell limits and buy stops sit above it. Stops become market orders once triggered; stop-limit orders may never fill. Buy limits and sell stops are reduced by the dividend on the ex-date. Fill or kill means all now or nothing; immediate or cancel allows partial fills; all or none must fill completely but not immediately. Before a short sale, the firm must locate shares, and a ten percent drop triggers Rule 201's price test. Regular-way settlement is T plus one, Reg T payment is due two business days after that, and selling before paying, called freeriding, freezes a cash account for ninety days.

Chapter 19: Regulation, Prohibited Practices, Complaints and Records

The Securities Act of 1933 regulates new issues, and the Exchange Act of 1934 regulates trading and created the SEC. Prohibited practices include churning, unauthorized trading, guarantees, selling away and misrepresentations. Borrowing from or lending to customers is allowed only under specific exceptions, and sharing in an account requires written approval and a proportional share. Manipulation, like painting the tape, and insider trading are illegal, and insider trading can bring civil penalties of up to three times the profit. Outside business activities need prior written notice, and the regulatory element of continuing education is now annual. The gift limit is three hundred dollars a year. Written complaints, including emails and texts, are kept at least four years, and arbitration is final and binding. SIPC protects customers of failed firms up to five hundred thousand dollars, including two hundred fifty thousand in cash.

Series 7 Audio Lessons