CPT Commodities & Futures Trading 3

Question 1

What is a 'calendar spread' in futures trading?

Accepted Answer

Simultaneously buying and selling futures contracts of the same commodity in different delivery months

Answer

Buying a futures contract and selling an options contract on the same underlying asset

Answer

A strategy that profits only when two commodity prices converge

Answer

Holding a futures position across a fiscal quarter-end

Question 2

The Commitment of Traders (COT) report is published by which organization?

Accepted Answer

Commodity Futures Trading Commission (CFTC)

Answer

Chicago Mercantile Exchange (CME Group)

Answer

National Futures Association (NFA)

Answer

Federal Reserve Bank of Chicago

Question 3

In commodity markets, what is 'physical delivery'?

Accepted Answer

The actual transfer of the underlying commodity from seller to buyer upon contract expiration

Answer

The exchange of cash between counterparties at contract expiration

Answer

The daily mark-to-market settlement process for futures accounts

Answer

A broker's electronic confirmation of a futures trade

Question 4

What is 'position limit' in futures trading?

Accepted Answer

The maximum number of futures contracts a single trader can hold in a given commodity

Answer

The maximum leverage ratio allowed by a futures broker

Answer

The minimum contract size required for institutional futures participation

Answer

The daily loss limit that triggers automatic account liquidation

Question 5

Which exchange is the primary venue for WTI crude oil futures contracts?

Accepted Answer

New York Mercantile Exchange (NYMEX)

Answer

Chicago Board of Trade (CBOT)

Answer

Intercontinental Exchange (ICE) Europe

Answer

Chicago Mercantile Exchange (CME)

Question 6

What is 'roll yield' in commodity futures investing?

Accepted Answer

The gain or loss from transitioning a futures position from an expiring contract to a new one

Answer

Dividends earned from holding commodity ETFs

Answer

Interest income generated by the collateral posted for futures margin

Answer

The annualized return on a long-only commodity index

Question 7

A trader uses commodity futures to benefit from price differences between two related commodities (e.g., heating oil vs. crude oil). This strategy is called:

Accepted Answer

Inter-commodity spread trading

Answer

Basis trading

Answer

Scalping

Answer

Carry trade