Optional track, unlocks after Seat Holder

The Broker's Desk: Series 3 Prep

Pass the full exam to earn the Broker rank.

Lessons

14 lessons. All ready to read.

1. 1Futures terminologyVerified

   The core vocabulary of futures: contracts, forwards, offset, clearing, margin, settlement, open interest, and market structure

2. 2Hedging: short and long hedgesVerified

   Why hedgers take a futures position opposite their cash position, and who uses short (selling) and long (buying) hedges

3. 3Basis: strengthening and weakeningVerified

   Basis as cash minus futures, what strengthening and weakening mean, and how basis changes the short and long hedger's final price

4. 4Spreads: intramarket, intermarket, intercommodity, bull vs. bearVerified

   What a futures spread is, the main spread types and their names, and how bull and bear spreads profit from narrowing or widening

5. 5Options on futures: calls, puts, premium, intrinsic and time valueVerified

   What calls and puts on futures are, who pays the premium, moneyness, and how premium splits into intrinsic value and time value

6. 6Options strategies: breakeven, max gain, max lossVerified

   Breakeven, maximum gain and maximum loss at expiration for long and short calls and puts, a bull call spread, and a long straddle

7. 7Financial futures: interest rate, currency, stock indexVerified

   The three families of financial futures, how each is quoted and settled, with CME specs for ZN, SR3, 6E, ES, NQ, MES and MNQ

8. 8Margin, settlement, delivery, price limitsVerified

   Margin as a performance bond, initial vs maintenance and margin calls, daily mark-to-market at the settlement price, delivery vs cash settlement, and daily price limits

9. 9Fundamental vs. technical analysisVerified

   The two broad ways traders form a view on price: supply and demand factors versus chart patterns, volume, and open interest

10. 10The regulators: CFTC, NFA, exchangesVerified

    Who regulates U.S. futures: the CFTC as the federal agency, NFA as the industry self-regulatory organization, and exchanges as self-regulators of their own markets

11. 11Registration categories: FCM, IB, CTA, CPO, AP, floor brokerVerified

    What each futures registration category does, which ones hold customer money, and how individuals register through a sponsor

12. 12Customer protection: segregated funds, risk disclosureVerified

    How an FCM must keep customer money apart from its own, and the risk disclosure a customer signs before an account opens

13. 13Accounts and conduct: discretionary accounts, promo rules, arbitrationVerified

    Who may decide a customer's trades, what a firm may say to win customers, and how a customer dispute gets resolved

14. 14Position limits and large-trader reportingVerified

    Why speculative position limits exist, how positions are counted against them, and how large positions are reported to the CFTC