Trading Jobs Energy Trading For Dummies 5

Question 1

What is the main function of a clearinghouse in exchange-traded energy futures?

Accepted Answer

To act as counterparty to both sides and guarantee settlement

Answer

To set the weather forecast for traders

Answer

To refine crude oil into products

Answer

To issue government energy permits

Question 2

What does 'margin' refer to in futures trading?

Accepted Answer

The collateral deposited to cover potential losses

Answer

The profit on a completed trade

Answer

The commission paid to a broker

Answer

The difference between two benchmarks

Question 3

Which factor most directly distinguishes physical from financial energy trading?

Accepted Answer

Physical trading involves actual delivery of the commodity

Answer

Financial trading is always illegal

Answer

Physical trading uses no contracts

Answer

Financial trading requires pipelines

Question 4

What is 'volatility' a measure of in energy markets?

Accepted Answer

The degree of price fluctuation over time

Answer

The total volume traded

Answer

The number of refineries operating

Answer

The carbon content of a fuel

Question 5

Why are emissions allowances (carbon credits) traded as a commodity?

Accepted Answer

They let companies buy the right to emit and create a market price for carbon

Answer

They replace crude oil in refineries

Answer

They guarantee electricity delivery

Answer

They are required to open a trading account

Question 6

What is a likely consequence of a major pipeline outage for regional gas prices?

Accepted Answer

Local prices may spike due to constrained supply

Answer

Prices instantly fall to zero

Answer

Global benchmarks become irrelevant

Answer

Trading is permanently banned

Question 7

What role does a 'fundamental analyst' play on an energy trading team?

Accepted Answer

Assessing supply, demand, and inventory data to forecast prices

Answer

Cleaning the trading floor

Answer

Setting margin requirements for the exchange

Answer

Approving government subsidies