Innovation & Change Management Flashcards
7 cards from real Series 3 – The National Commodities Futures Test practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Innovation & Change Management flashcards as text
Bitcoin futures listed on CME Group are best described as what?
Answer: Cash-settled futures traded on a CFTC-regulated exchange
CME bitcoin futures are cash-settled and trade on a designated contract market under CFTC oversight.
What is a key characteristic of weekly options on futures compared with monthly options?
Answer: Time decay accelerates faster because of shorter life
Shorter-dated options lose time value more rapidly as expiration nears.
In a cash-settled futures contract, what happens at final settlement?
Answer: Positions are closed with a cash payment based on a reference price
Cash settlement transfers the gain or loss in cash based on a final settlement price.
What best describes a block trade in futures?
Answer: A privately negotiated large trade executed away from the central order book and reported to the exchange
Block trades meet minimum size thresholds and must be reported to the exchange promptly.
What is the main purpose of daily price limits on certain futures contracts?
Answer: To limit extreme single-day price moves and allow a cooling-off period
Limits curb disorderly moves and give participants time to assess information.
Which control is most commonly used to reduce risk from algorithmic trading errors?
Answer: Pre-trade risk limits such as maximum order size
Pre-trade limits stop erroneous or oversized orders before reaching the market.
Why is the margin on a calendar spread usually lower than on an outright futures position?
Answer: The offsetting legs reduce net price risk
Opposite positions in related contracts offset one another, lowering exposure.
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Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- finra.org — Score release, test dates, test delivery, fees, exam format, passing score · verified Oct 2026
- nfa.futures.org — Eligibility, score validity · verified Oct 2026