Tips for acing the SIE exam the first time

SIE Exam Tips

Taking the Securities Industry Essentials (SIE) Exam can be a nerve-wracking experience. Since the SIE Exam is the first exam that new securities professionals take, they may not know what to expect. Successful test-taking relies on thorough preparation. Securities Training Corporation provides the classes and practice tests that will help you pass the SIE Exam and answer questions with the confidence of a trained securities professional.

What is the SIE Exam?

FINRA is an organization that regulates the securities industry and administers a variety of securities exams. In fact, over a person’s career in the securities industry she will likely be required to take multiple exams to demonstrate her understanding of industry products and regulations. The SIE Exam is a new test that was introduced in 2018. Before the creation of the SIE Exam, much of the general information pertaining to securities products and industry regulation was repeated across the exams. Now, the SIE consolidates those general questions into one exam. After passing the SIE Exam, securities professionals can then take their choice of series exams. These “top-off” exams (e.g., Series 6 or Series &) are shorter and cover only the content that’s specific to the specific series.

Before taking the SIE, you should carefully consider the following five tips for exam success.

1.     Know the Terminology

SIE Exam questions require an understanding of securities industry language. Communicating effectively and using the correct terminology is one of the key skills that new entrants into the securities industry need to master. To gain that mastery for the SIE Exam, you can study the glossary of the exam manual for clarification of the terms you may not fully comprehend. Practice tests are also very important because they show which terms you need to study further.

2.     Know Which Terms Have Multiple Meanings

It’s easy to get thrown off by terms that have multiple meanings. Terms like “principal” and “covered” can refer to different things. For example, “covered” may refer to a hedged position or an options trading strategy. Another issue that can easily confuse a person taking the SIE Exam is that the same concept may be referred to in different ways. For example, an option writer and an option seller are the same thing—it’s a person who is on the short side of an options trade. Knowing all of the terms that refer to essential securities concepts is vital to your success on the SIE Exam.

3.     Know the Essential Formulas

Working in the securities industry requires math, so it’s natural for some questions to require knowledge of industry-specific mathematical formulas. Although the SIE Exam is not a math test, it’s important to recognize the formulas that securities professionals routinely use. Examples include the formulas for calculating conversion ratio and the price of mutual fund shares.

4.     Be Ready to Apply Key Concepts

Many questions require more than pure memorization since they test a person’s conceptual understanding. These questions may require you to identify the correct response to a certain event. For example, what should bond investors expect if interest rates rise? This question is determining whether a person understands that if interest rates rise, existing bond prices fall. Remember, the point of the SIE Exam is to be certain that a person understands the basics of how the securities markets function and the role of the securities industry in the economy.

5.     Prepare, prepare, prepare

The SIE Exam is far from intuitive. In fact, it’s an exam that focuses on specific knowledge of the securities industry. The best way to pass is by thoroughly preparing so that you become comfortable with securities industry language and concepts. Effective preparation does more than just help you pass your exam; it will give you confidence in your career.

Securities Training Corporation prepares students so that they confidently pass the SIE Exam. Students who take Securities Training Corporation courses gain a thorough understanding of securities markets and the securities industry, which ensures that they enter the securities industry as well-trained professionals.