Question

John and Jane are a married couple. John is a medical doctor, while Jane is a business executive. They maintain their finances separately - John has his options account at BD "A." while Jane has her options account at BD "B." John and Jane were talking over dinner about the latest news coming from XYZZ Corp. and they decide that the stock will likely move up rapidly. The next day, John places an order with his broker to buy 140,000 XYZZ calls and Jane calls her broker and places an order to buy 160,000 XYZZ calls. The position limit for XYZZ is 250,000 contracts on each side of the market. Which statement is TRUE

Answer 1

The remaining part of the question is:

Which Statement is True:

A. This is not a violation of position limits because the positions were taken in accounts at different broker-dealers

B. This is not a violation of position limits because each individual acted independently when placing his or her order

C. This is not a violation of position limits because of the marriage exemption from position limit violations

D. This is a violation of position limits

Correct Answer:

D. This is a violation of position limits

Step-by-step explanation:

Since Jane and John are couple, it would be treated as a single entity despite the fact that, they operate different account in different banks. The position limit for XYZZ is 250,000 contracts whether as an individual or as a couple placed independently or jointly.