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Section 1
NFA Series 3 official study outline — development and purpose of futures markets
Preview
Preview: Futures Trading Theory and Terminology
Preview includes- 4 of 5 lesson topics
- 1 overview segment
- 3 core concepts
- 2 exam tips
Lesson Topics
- A futures contract is a standardized exchange-traded agreement whose terms include quantity, quality/grade where applicable, delivery month, delivery location or cash-settlement method, and quotation convention
- Hedgers use futures to reduce an existing or anticipated commercial price exposure; speculators accept price risk in pursuit of profit
- Price discovery occurs as bids and offers incorporate information about expected supply, demand, financing, storage, policy, and other market factors
- The clearing system and margining process support performance of exchange-traded contracts; they do not guarantee that customers earn profits
Overview
Organized futures markets standardize contracts and provide price discovery, liquidity, and a mechanism for transferring price risk between hedgers and speculators.
Core Concepts
- A futures contract is a standardized exchange-traded agreement whose terms include quantity, quality/grade where applicable, delivery month, delivery location or cash-settlement method, and quotation convention.
- Hedgers use futures to reduce an existing or anticipated commercial price exposure; speculators accept price risk in pursuit of profit.
- Price discovery occurs as bids and offers incorporate information about expected supply, demand, financing, storage, policy, and other market factors.
Exam Tips
- When a stem says a commercial user wants to reduce uncertainty, think hedge/risk transfer before speculation.
- Separate market purpose from market outcome: price discovery is a function; profit is not guaranteed.
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Section 2
NFA Series 3 official study outline — futures versus securities and forward contracts
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Section 3
NFA Series 3 official study outline — clearinghouse functions
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Section 4
NFA Series 3 official study outline — delivery provisions
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Section 5
NFA Series 3 official study outline — normal and inverted markets
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Section 6
NFA Series 3 official study outline — hedging theory
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Section 7
NFA Series 3 official study outline — speculative theory
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Section 8
NFA Series 3 official study outline — general futures and options terminology
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Section 9
NFA Series 3 official study outline — initial and maintenance margin
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Section 10
NFA Series 3 official study outline — variation margin and margin calculations
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Section 11
NFA Series 3 official study outline — hedge and spread margin
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Section 12
NFA Series 3 official study outline — option intrinsic value, time value and delta
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Section 13
NFA Series 3 official study outline — price limits and lock-limit conditions
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Section 14
NFA Series 3 official study outline — offsetting contracts and settlement
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Section 15
NFA Series 3 official study outline — first notice day and delivery
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Section 16
NFA Series 3 official study outline — option exercise, assignment and settlement
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Section 17
NFA Series 3 official study outline — market, stop, stop-limit and MIT orders
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Section 18
NFA Series 3 official study outline — order qualifiers
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Section 19
NFA Series 3 official study outline — electronic order handling
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Section 20
NFA Series 3 official study outline — technical analysis
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Section 21
NFA Series 3 official study outline — technical indicators
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Section 22
NFA Series 3 official study outline — fundamental analysis
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Section 23
NFA Series 3 official study outline — yield curves and interest-rate analysis
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Section 24
NFA Series 3 official study outline — short and long hedges
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Section 25
NFA Series 3 official study outline — anticipatory hedges
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Section 26
NFA Series 3 official study outline — strengthening and weakening basis
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Section 27
NFA Series 3 official study outline — effective purchase and sale prices
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Section 28
NFA Series 3 official study outline — hedge outcomes across agricultural, energy, metals, rates, currencies and equity-index futures
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Section 29
NFA Series 3 official study outline — basis calculation
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Section 30
NFA Series 3 official study outline — intermarket and interdelivery spreads
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Section 31
NFA Series 3 official study outline — spread execution
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Section 32
NFA Series 3 official study outline — widening and narrowing expectations
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Section 33
NFA Series 3 official study outline — normal versus inverted market spread logic
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Section 34
NFA Series 3 official study outline — carrying-charge spreads
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Section 35
NFA Series 3 official study outline — bull and bear spreads
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Section 36
NFA Series 3 official study outline — futures profit/loss calculations
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Section 37
NFA Series 3 official study outline — commission effects
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Section 38
NFA Series 3 official study outline — return on margin equity
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Section 39
NFA Series 3 official study outline — select speculative positions from market expectations
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Section 40
NFA Series 3 official study outline — protect positions with appropriate orders
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Section 41
NFA Series 3 official study outline — long and short option risk/reward
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Section 42
NFA Series 3 official study outline — calls and puts as hedge substitutes
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Section 43
NFA Series 3 official study outline — breakeven and P/L calculations
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Section 44
NFA Series 3 official study outline — synthetic option/futures positions
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Section 45
NFA Series 3 official study outline — covered-call concepts
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Section 46
NFA Series 3 official study outline — bull/bear option spreads
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Section 47
NFA Series 3 official study outline — calendar and arbitrage spreads
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Section 48
NFA Series 3 official study outline — CFTC registrations and NFA membership
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Section 49
NFA Series 3 official study outline — intermediary roles
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Section 50
NFA Series 3 official study outline — NFA Compliance Rule 2-4
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Section 51
NFA Series 3 official study outline — account opening and risk disclosure
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Section 52
NFA Series 3 official study outline — discretionary-account requirements
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Section 53
NFA Series 3 official study outline — position reporting and speculative position limits
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Section 54
NFA Series 3 official study outline — FCM and IB responsibilities
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Section 55
NFA Series 3 official study outline — customer-fund protections
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Section 56
NFA Series 3 official study outline — communications with the public and promotional material
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Section 57
NFA Series 3 official study outline — supervision, books and records, disciplinary and arbitration concepts
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Section 58
NFA Series 3 official study outline — CPO/CTA registration, disclosure and reporting requirements
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