FINRA Issues Hammer Warnings

Chicago — FINRA, the Financial Industry Regulatory Authority, recently issued a newoptions are like hammers advisory on hammers. The Risk and Characteristics of Standardized Hammers was released today at the Chicago Building Operators and Equipment (CBOE). The 186-page document was created to advise consumers about the risks inherent in owning and using hammers.

Hardware stores will now be required to provide consumers with a statement of risk any time a hammer is sold. Copies of the full Hammer Disclosure Document must be available from any retailer of hammers. In addition, FINRA is requiring each hammer sold to have a label on it stating: “Hitting yourself in the head with this hammer may cause pain, injury, and even death.”

“Hammers are not suitable for some people. Infants, the elderly, and weak little girls should not use hammers. Hammer pounding should be left to professionals; it should not be attempted at home,” said Suzy A. Rod, Regulations Director for FINRA. “Anyone who wants to use a hammer should read the Hammer Disclosure Document in order to fully understand all of the risks.”

Home Depot (NYSE:HD) is on board with the new regulation. They have hired a hammer specialist at each of their 2300 retail stores including those in Canada and Mexico. Their job will be to provide the hammer education that consumers desperately need. “We want to be sure that this important information is available to everyone, including contingent workers preparing to come to the United States,” said a Home Depot spokesperson.

FINRA has long proclaimed that trading stock options is risky. They correctly point out that you can do stupid things with options and lose money. Today they are publicly pointing out that you can do stupid things with hammers.


 

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Although I poke fun at the good folks from FINRA, there are risks in trading stock options. There are also risks in stocks, bonds, Treasury bills, and FDIC insured savings accounts. All investors should fully understand the risks before they make any investment.