Series 7: 5.5.1. Index Options

Taken from our Series 7 Online Guide

5.5.1. Index Options

Rather than base an option on a single underlying stock, investors may choose to invest in an option on an index of stocks or other securities. Index funds can be broad-based, for example, tracking the S&P 500, or narrow-based, reflecting the performance of a particular segment of the market, such as healthcare or energy.

Broad-based index options may be used to

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