Experience the Quality With Free Series 3 License Exam Questions That Helps Candidates Pass

Futures gain = 640 − 630 = +10¢. Cash sale = 625¢. Effective = 635¢. Hedge doesn’t fully lock in initial price because of basis risk, but it stabilizes income.

First notice day is when shorts may issue delivery notices and longs must be prepared to accept delivery. Most speculators exit before this date. Last trading day is later for many contracts. Understanding delivery rules is critical for Series 3.

Standard crush spread = long soybeans, short meal + oil. Reverse crush is the opposite. Here, oil vs. meal only = partial reverse crush. Series 3 expects recognition of these relationships.

The CFTC regulates futures, options on futures, and swaps under Dodd-Frank. SEC regulates securities, FINRA = securities SRO. NFA enforces futures rules but CFTC has statutory authority.

This is an intercommodity spread (corn vs. wheat). Intracommodity uses different months of the same commodity. Interexchange uses same commodity on two exchanges. Butterfly spreads use three months of one commodity. Series 3 requires quick recognition of spread categories.