Series 57 Practice Questions (2026) — Free Sample Questions with Answers

Answer: B

Nothing; at 80 shares the order is an odd lot: Incorrect. With a 40-share round lot for a stock priced between $250.01 and $1,000, 80 shares is two round lots, not an odd lot.

Raise its bid to $480.20 for 80 shares, immediately: Correct. Rule 604 requires the market maker to publish a bid reflecting the price and full size of a customer limit order that improves its bid, immediately (normally within 30 seconds).

Display it only if it improves the NBB by $0.05 or more: Incorrect. There is no minimum improvement threshold; any customer limit order that improves the market maker's bid must be displayed.

Hold the order until another bid joins at $480.20: Incorrect. Rule 604 requires display immediately (normally within 30 seconds); a market maker may not wait for other interest at the price before showing the customer's order.

Rule 604 requires specialists and OTC market makers to display customer limit orders that improve their quote, at full size, immediately; odd lots (now measured against tiered round lots), block-size, all-or-none and customer-requested exceptions apply.

Answer: A

1. 1. Split ratio 3-for-2: size × 3 ÷ 2 = 225 × 1.5 = 337.5; round down to 337 shares.
2. 2. Post-split value of the price = 65.15 × 2 ÷ 3 = 43.4333.
3. 3. Dollar value of the split = 65.15 − 43.4333 = 21.7167; round up to the next cent = 21.72.
4. 4. Adjusted price = 65.15 − 21.72 = $43.43. Adjusted order: 337 shares at $43.43.

337 shares at $43.43: Correct. Size: 225 × 3/2 = 337.5, rounded down to 337. Price: the split's dollar value (65.15 − 43.4333 = 21.7167) is rounded up to $21.72 and subtracted, giving $43.43.

338 shares at $43.44: Incorrect. This rounds both figures to the nearest unit; Rule 5330 rounds share size down and rounds the split's dollar value up, which lowers the price to $43.43.

450 shares at $32.57: Incorrect. This treats the split as 2-for-1; a 3-for-2 split multiplies size by 1.5, not 2.

675 shares at $21.71: Incorrect. This treats the split as 3-for-1 by using only the numerator; the ratio is 3 divided by 2.

For forward splits, Rule 5330 multiplies size by the split ratio (rounding down to whole shares) and reduces price by the split's dollar value rounded up to the next increment.

Answer: D

1. 1. Trade date Friday, Nov 20; T+1 settlement = Monday, Nov 23.
2. 2. Rule 204 for a long sale: close out by the beginning of regular trading on the 3rd consecutive settlement day after settlement date.
3. 3. Settlement days after Nov 23: Tue Nov 24 (1), Wed Nov 25 (2), Thu Nov 26 is a holiday, Fri Nov 27 (3).
4. 4. Close-out deadline: beginning of regular trading on Friday, November 27.

Tuesday, November 24: Incorrect. This is T+2, the close-out deadline for short sales; long-sale fails get until the third consecutive settlement day after settlement date.

Wednesday, November 25: Incorrect. This counts only two settlement days after the November 23 settlement date; long sales get three.

Thursday, November 26: Incorrect. This counts the Thanksgiving holiday as a settlement day; holidays are not settlement days.

Friday, November 27: Correct. Settlement is Monday, November 23 (T+1). Long-sale fails must be closed out by the start of regular trading on the third consecutive settlement day after settlement date: Nov 24, Nov 25 and, skipping the Nov 26 holiday, Nov 27.

Rule 204: short-sale fails close out by the start of trading on T+2; long-sale and bona fide market-making fails by T+4 (the third settlement day after settlement date), counting only settlement days.

Answer: A

1. 1. Settlement value for AM-settled options = special opening quotation = 4,812.25.
2. 2. Put intrinsic value = 4,850.00 − 4,812.25 = 37.75 points.
3. 3. Per contract: 37.75 × $100 = $3,775.
4. 4. Three contracts: $3,775 × 3 = $11,325.

$11,325: Correct. AM-settled options use the special opening quotation on expiration day: (4,850 − 4,812.25) = 37.75 × $100 × 3 = $11,325.

$14,025: Incorrect. This adds the 9.00 premium to the intrinsic value; the premium was received when the puts were sold and is not part of the exercise settlement amount.

$14,520: Incorrect. This uses Friday's closing value (48.40 points), the PM-settlement method; standard monthly index options are settled from Friday's opening prices.

$15,420: Incorrect. This uses Thursday's close (51.40 points); the last trading day's close is not the settlement value for AM-settled options.

AM-settled index options stop trading the day before expiration and settle in cash to a special opening quotation computed from component opening prices on expiration morning.

Answer: B

Send the risk disclosure document with the trade confirmation: Wrong. The document must be delivered before the transaction, not with the confirmation.

Send the risk disclosure document, then wait 2 business days: Correct. Rule 15g-2 requires delivering the Schedule 15G risk disclosure document before the first penny stock transaction and waiting at least 2 business days after sending it, with a signed acknowledgment of receipt.

Read the risk disclosure aloud and execute after a recorded call: Wrong. Oral delivery does not satisfy the written-document requirement.

Obtain the customer's written approval of the trade 30 days ahead: Wrong. No 30-day wait exists; the waiting period is 2 business days after sending the document.

Penny stock risk disclosure (15g-2): written Schedule 15G document before the first trade, signed acknowledgment, and a 2-business-day wait.

Answer: A

1. 1. Four-week volume = 1,850,000 + 2,150,000 + 1,700,000 + 2,300,000 = 8,000,000 shares.
2. 2. ADTV = 8,000,000 / 20 trading days = 400,000 shares.
3. 3. 10b-18 daily volume limit = 25% x 400,000 = 100,000 shares.

100,000 shares: Correct. ADTV = 8,000,000 / 20 = 400,000 shares, and Rule 10b-18 limits daily purchases to 25% of ADTV: 400,000 x 0.25 = 100,000 shares.

115,000 shares: Wrong. This uses only the latest week (2,300,000 / 5 = 460,000) instead of the full four-week ADTV.

120,000 shares: Wrong. This applies 30% (the Rule 103 passive market making figure) instead of 25%.

500,000 shares: Wrong. This divides by 4 weeks instead of 20 trading days, so it takes 25% of weekly volume, not daily volume.

Rule 10b-18 volume: no more than 25% of ADTV over the four calendar weeks before the purchase week, except one block per week in place of the daily limit.

Answer: D

1. 1. Reference price $2.50 is between $0.75 and $3.00: base band = 20%.
2. 2. 3:40 p.m. is in the last 25 minutes (3:35–4:00 p.m.); Tier 1 bands double: 20% x 2 = 40%.
3. 3. Band width = $2.50 x 0.40 = $1.00.
4. 4. Bands = $2.50 - $1.00 = $1.50 and $2.50 + $1.00 = $3.50.

$2.375 – $2.625: Wrong. This applies the 5% Tier 1 band, which is only for reference prices above $3.00.

$2.25 – $2.75: Wrong. This doubles the 5% band; the correct base for a $0.75–$3.00 stock is 20%.

$2.00 – $3.00: Wrong. 20% is the right base, but at 3:40 p.m. (within the last 25 minutes) the band is doubled.

$1.50 – $3.50: Correct. A reference price of $0.75–$3.00 uses 20% bands, and from 3:35 to 4:00 p.m. the band is doubled to 40%: $2.50 x 40% = $1.00, so $1.50 to $3.50.

Bands double only from 3:35 to 4:00 p.m., for all Tier 1 stocks and for Tier 2 stocks priced at $3.00 or less.

Answer: D

Bona fide quoting, because every bid could have been executed: Wrong. Orders that could trade are still disruptive when they are placed to move the market and then canceled after an opposite-side execution.

A wash trade, because the account traded with itself: Wrong. The account sold to other buyers; there was no self-trade.

Painting the tape, because the sale printed above the earlier bid: Wrong. Painting the tape is a series of reported trades (often wash or matched trades) that create a false appearance of activity; here a single sale went to genuine buyers, and the abuse lies in the non-bona fide bids.

Layering, a disruptive quoting pattern barred by Rule 5210: Correct. Rule 5210.03 (Type 1) prohibits placing multiple limit orders on one side at various prices, executing on the opposite side after prices move, and then canceling the displayed orders: the layering/spoofing pattern shown.

Layering/spoofing: non-bona fide orders on one side to move prices, a trade on the other side, then cancellation; FINRA Rule 5210.03 and Rule 2020 prohibit it.

Answer: D

1. 1. New order value = 15,000 x $40.00 = $600,000.
2. 2. Aggregate exposure = $3,600,000 executed + $900,000 open + $600,000 new = $5,100,000.
3. 3. $5,100,000 > $5,000,000 threshold, so Rule 15c3-5(c)(1)(i) requires the order to be blocked pre-trade.

$4,200,000; accept the order: Wrong. This ignores the $900,000 in open orders, which still count toward the client's aggregate exposure.

$4,500,000; accept the order: Wrong. This leaves out the new order itself ($600,000), which must be tested before it is accepted.

$5,000,000; accept it at the threshold: Wrong. $5,000,000 is the threshold, not the exposure the order creates.

$5,100,000; reject the order: Correct. Executed buys ($3,600,000) + open orders ($900,000) + the new order ($600,000) = $5,100,000, which exceeds the $5,000,000 threshold, so the pre-trade credit control must prevent the order from being entered.

Credit controls must stop, before entry, any order that would push a customer's aggregate exposure past its pre-set threshold.

Answer: B

1. 1. NBB = highest bid = $30.05 (Exchange 1); NBO = lowest ask = $30.10 (Exchanges 1 and 2).
2. 2. Midpoint = ($30.05 + $30.10) / 2 = $60.15 / 2 = $30.075.

$30.05: Wrong. $30.05 is the national best bid, where a primary (same-side) peg to buy would price.

$30.075: Correct. The NBBO is $30.05 x $30.10, so the midpoint is ($30.05 + $30.10) / 2 = $30.075. A midpoint peg tracks that price; the Sub-Penny Rule limits quoted prices, not a non-displayed midpoint execution.

$30.08: Wrong. Rounding to a penny assumes Rule 612 bars midpoint pricing; it restricts displayed and priced orders in sub-penny increments, not midpoint pegs.

$30.10: Wrong. $30.10 is the national best offer, where a market (contra-side) peg to buy would price.

Primary peg = same side of the NBBO, market peg = opposite side, midpoint peg = halfway between the NBB and NBO.

Answer: B

It executes at the opening price of $39.50 as a market order: Wrong. That describes a plain sell stop; a stop limit becomes a limit order once elected.

It is elected but cannot sell below $39.75, so it may go unfilled: Correct. The $39.50 opening trade is at or below the $40.00 stop, so the order is elected and becomes a limit order to sell at $39.75 or better; with the stock trading below the limit, it does not execute.

It is not elected, because the stock never traded at exactly $40.00: Wrong. A sell stop is elected by a trade at or below the stop price; gapping through it still triggers the order.

It executes at $40.00, because a stop limit guarantees the stop price: Wrong. No stop order guarantees an execution at the stop price; the limit only sets the worst acceptable price.

A stop limit order trades protection from a bad fill for the risk of no fill: once elected it becomes a limit order and will not execute through its limit.

Answer: C

1. 1. Record date: Monday, Dec 7, 2026.
2. 2. Settlement is T+1, so a buyer must trade by the business day before the record date to settle by it.
3. 3. Friday, Dec 4 trade settles Monday, Dec 7: buyer is the holder of record.
4. 4. Monday, Dec 7 trade settles Tuesday, after the record date: ex-date = Monday, December 7.

Thursday, December 3: Incorrect. Two business days before the record date was the ex-date under T+3 settlement.

Friday, December 4: Incorrect. One business day before the record date was the ex-date under T+2 settlement; under T+1 it is the record date itself.

Monday, December 7: Correct. With T+1 settlement, the ex-dividend date for a normal cash dividend is the same business day as the record date. A buyer on Friday, Dec 4 settles Monday and is the holder of record.

Tuesday, December 8: Incorrect. The day after the record date is too late; a buyer on Monday, Dec 7 settles on Tuesday, after the record date, so Monday is already the ex-date.

Under T+1, the ex-dividend date for ordinary cash dividends is the record date; the last day to buy with the dividend is the business day before.

Answer: D

Monday: Incorrect. 1.2 million shares and $12 million are both below the daily thresholds of 2 million shares or $20 million.

Tuesday: Incorrect. $19.8 million and 1.9 million shares are close to, but below, the daily thresholds.

Wednesday: Incorrect. Neither 1.95 million shares nor $19.9 million reaches 2 million shares or $20 million, and the week's cumulative total is far below the monthly thresholds.

Thursday: Correct. A large trader's daily activity equals or exceeds 2 million shares or $20 million. Thursday's 2,000,000 shares meets the share test even though the value is only $9.6 million.

The large trader level is met by NMS securities transactions of 2 million shares or $20 million in a day, or 20 million shares or $200 million in a month; either the share test or the value test is enough.

Answer: C

With no modifier, since the market opens two seconds later: Incorrect. The modifier depends on the execution time, not on how close it is to the open; 9:29:58 is outside normal market hours.

As an as/of trade with the late indicator: Incorrect. As/of reporting is for trades reported on a later day; this trade was reported within 10 seconds on the trade date.

With the .T modifier, as executed outside 9:30–4:00: Correct. Trades executed outside normal market hours (9:30:00 a.m. to 4:00:00 p.m. ET) carry the .T modifier; 9:29:58 a.m. is before the open.

Not until 9:30:00 a.m., when normal hours begin: Incorrect. Pre-market trades are reported within 10 seconds while the facility is open; delaying the report would make it late.

The .T modifier marks trades executed outside normal market hours (before 9:30:00 a.m. or after 4:00:00 p.m. ET), however close to the open or close.