Futures Forex Trading

Short Sell Trading

2011-12-01T09:31:00.000-08:00

A trader or investor who sells a stock that he does not own, hoping the price falls later on is selling short. This is a risky form of trading, as the market on the shares could rise on the investor.
The person must buy back or cover the stock, so the investor needs to be careful with watching price movement and direction.

Most broker dealers will permit this practice when it is done in a margin account. The stock trader will put in money above the proceeds of the short sell to cover the brokerage firm, in case the stock rises.

Selling short should only be for experienced investors and day traders.

See more free trading examples

Short Sell Trading

Series 3 Online Course

2011-11-26T13:40:00.000-08:00

Begin training for the Series 3 license online. The course training is delivered in a virtual manner that will teach you all of the course topics to pass the Series 3 test online.

The course has 8 sections that guide you through each topic that is tested on the exam.

Full online web support is given to every student.

Learn futures and hedging, commodities and futures speculation and strategies. Practice exams are included with each section and answer rationale. The main advantage of the online course is closeness to the real test. The Series 3 is delivered on computer, so completing training by way of online class will give the student accurate practice exams and interactive learning.

The virtual training is flexible, so you can study any section you choose until you feel comfortable in that area. Your progress is tracked online and your grades on the Series 3 exams are stored. All material is updated for current test content. Our students are assured of having the most up to date information available for the licensing exam. The course does not require any prior knowledge of commodities and futures. Each section starts from a basic introductory function and gradually increases so our course students learn at a comfortable pace online

BUY Series 3 Virtual Training HERE
- full instructor and technical support included.

Forex Trading Platforms

Online trading in Foreign Exchanges (Forex)

2011-11-20T11:16:00.000-08:00

Online Forex trading is more popular now that most everyone has access to a computer and internet. Unlike the stock exchange, the Forex does not have a particular place for trading to take place. While trading takes place all over the world, online Forex trading makes this process more convenient than ever.

Transactions in the Forex are traded very rapidly. The Forex is open around the clock on every business day of the year. Trading begins every morning in Sydney, Australia and as the business day in each country begins, the Forex online trading opens around the world. Online Forex trading allows banks, financial institutions, brokers and speculators to trade their currency rapidly and with ease. Online Forex trading is also a popular way to change foreign currency because it happens in real time with no delay.

Because online Forex trading makes exchanging foreign currency so easy and accessible to millions of people, many are trying to learn the ins and outs of the Forex. Brokers and financial institutions can offer advice on investing in the Forex. Brokers will also do the actual trading for the consumer. However, many are willing to learn to trade on the Forex on their own. When learning about online Forex trading it is imperative to understand everything there is to know about the Forex. Many online websites can offer potential traders tutorials and demos on how to get started in online Forex trading. Practicing on the demos helps speculators learn the basics of online Forex trading.

Also, another tip to learning online Forex trading is to study the news, including international news and news relating to politics, economics and finances. Inflation, changes in government and taxes just to name a few all affect the Forex on a daily basis. It is crucial to understand how these changes affect trading and the value of currency.

Automatice Forex Trading Software

Trade online with the top automatice Forex trading software robot and see $5100 turn into $40,000If you back-test a robot and it shows 100% “demo” profit in one month, it should PRODUCE around 80-100% profit in LIVE trading.
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FX Trading

2011-10-18T10:04:00.000-07:00

Forex Killer - It is used by professionals & beginners alike with no experience whatsoever.
You can start with as little as $500 USD on a real forex account or learn the ropes on a demo account without risking any real money at all.

It works with all trading platforms because it is an independent program. You just have to feed it with market data and follow it's trading advice

Penny Stock Trading Course

2011-08-10T20:57:00.000-07:00

Professional trading system teaches beginners how to profit from Penny stock short term and long term trading.

Trading and Buying Penny Stocks

Stocks that do not trade on an exchange and are priced at $5 or less are known as penny stocks. Buying or investing in these stocks carries more risk than other securities, as they are normally new or emerging companies and the trading ability of them is usually limited to a fewer number of brokers who can fill penny stock trades.
These investments do not trade on the NYSE, AMEX or any other actual stock exchange. They also do not trade on NASDAQ. The trading, buying and investing of these shares is done through an Over The Counter market of firms acting as market makers. These market makers are brokerage firms that own or can readily provide the shares to investors and broker dealers.

A great course system. For serious people only who want to become millionaires in 24 months by following my exact strategy to make you a fortune in penny stocks.

Penny Stock Trading Course - Lots of testimonials

Series 31 License

2011-08-07T16:48:00.000-07:00

The futures and commodities industry has brokers and traders with various required licenses. The Series 3 - Series 30 and the Series 31. The 31 is the Futures Managed Fund License. It is a fairly short 45 question multiple choice test that is taken on computer and the results are given at time of completion. The Series 31 exam does not require company affiliation prior to taking the exam. Other Broker license exams do. The Series 31 can be taken by registering through American Investment Training and using the U-10 form. The form can be sent out with the training course by request.

When and where can the test be taken?

Once your registration has been received and completed, you can take the exam at Prometric test centers based on seat availability and the nearest test center to you. The Series 31 is available to be taken daily. Monday to Saturday are usually the open days.

The positives to getting this license include having a license "in hand" when you are seeking employment in the futures and commodities industry. Futures firms consider having licenses obtained prior to seeking a broker or trader position a big plus. This also holds true for the Series 3 and Series 30 exams. The Series 3 in the primary license to trade in the futures and commodities markets. It is also a more comprehensive exam than the 31. They are separate licenses with different functions, so it is best to get both. Having the 3 and 31 allows you to qualify for more positions at the firm.

Series 31 Topics

The 31 test includes all relevant topics including:

General market knowledge

1. Definition and significance of

• Margin
• Futures and forward contracts
• Price limits
• Open interest
• Offsetting contracts
• "Marking-to-market"
• Settlement
• Spread trades
• Basis
• Hedging
• Yield curve
• Cost of carry
• Leverage
• Price volatility

Regulations
CPO CTA Rules
Disclosure Statements
Customer Account Rules

If the exam is failed, the student must wait 30 days before re-taking the exam. If the test is failed 3 times, the student must wait 6 months.

Keys to Passing the Test

As with most broker exams, studying consistently and passing accurate practice exams will help you pass the test on the first attempt. Since the test is short and not as complex as the Series 3 or certainly the Series 7 (General Registered Representative License), 2-3 weeks of consistent study time and passing the practice tests can give you the edge to passing the Series 31.

Test centers are available nationwide with most state having a center within close distance to most test takers.

Consider the Series 31 before entering the futures and commodities industry. Online Series 31 Course is available.

Best of luck in your career!

American Investment Training

Stock Trading Course

2011-08-02T19:34:00.000-07:00

Stock Assault A professional Artificial Intelligence Stock Market Software. Artificial intelligence works almost like a human brain. Think: a brain put into a jar and customized just to process stock charts all day to make you money. Since this software actually thinks, each computer will produce different results. You can have two computers running side by side and each copy of Stock Assault 2.0 will give you a different pick and both picks will be dead on.

This is both amazing and deliberate. If every person using Stock Assault 2.0 got the same picks, they will start to affect each other, almost like the penny stock example above. However, this would still be rare even if Stock Assault 2.0 did behave like that. The stock market is just too large with billion dollar companies, the only effect might be a few cents. But with penny stocks, that is exactly what happens, hence the name "penny" stocks.

START HERE

FX Training

2011-07-30T12:56:00.000-07:00

FOREX (FOReign EXchange market) is an international foreign exchange market, where money is sold and bought freely. In its present condition FOREX was launched in the 1970s, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from supply and demand.

As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market. It is also the biggest liquid financial market. According to various assessments, money masses in the market constitute from 1 to 2 trillion US dollars a day.

(It is impossible to determine an absolutely exact number because trading is not centralized on an exchange.) Transactions are conducted all over the world via telecommunications 24 hours a day from 00:00 GMT on Monday to 10:00 pm GMT on Friday. Practically in every time zone (that is, in Frankfurt-on-Main, London, New York, Tokyo, Hong Kong, etc.) there are dealers who will quote currencies. What do you need to make money with Forex Automoney? First thing you need to trade Forex is a computer (PC or MAC) with Internet connection. You have a computer, right? It can even be a computer in an Internet cafe or library - it doesn't matter.

The second thing is money of course. You must sell or buy other currencies using your money. But all you need is $1! Yes - you can start trading with just ONE DOLLAR! You also need our membership but now we have a promotion now and it's dirty cheap!

The third, and the last needed is a knowledge when to sell or buy.

you'll also be given a detailed on-line manual with Forex basics

Your initial charge will be $4.95 for the three day trial period. After the trial period, the membership fee is $99.90/month until the subscription is cancelled.

FOREX EDUCATION FOR A LIFETIME - learn and be guided each month!

Visit: Forex Training

Forex Trading Course - FX Course

2011-07-12T07:38:00.000-07:00

Forex robot trading course for beginners and seasoned traders.

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Closed End Funds

2011-07-03T18:38:00.000-07:00

Management companies that trade on the secondary market are known as Closed End Funds. These investments are similar to mutual funds, except unlike mutual funds - they are not issuing new shares in the primary market ongoing.
The company does a one time initial public offering and then the shares of the closed end fund trade Over The Counter or on an exchange.

Trading

To buy shares in a closed end company, you will buy through a broker and pay a commission. These funds are trading in the market, so the buying and selling of closed end fund shares are the same as buying shares of stock.

The value or price of the traded funds are based on performance of the fund along with supply and demand - just like any other negotiable security.

NAV - Net Asset Value

The true value per share of a closed end fund can be found in it's NAV or Net Asset Value. This is calculated daily and is based on the total net income - operatating expenses such as costodian banks etc. divided by the number of outstanding shareholders.

Although the NAV is calculated daily and represents the true value of the fund per share, the share price is based on the trading in the market. The trading price of a closed end fund should trade fairly close to it's NAV.

Closed end funds have an investment advisor that trades the securities and manages the cash in the fund. The advisor has discretionary authority within the limits of the funds investment objectives. The securities can be composed of stocks, bonds or in the case of a REIT - real estate investments.

Dividends are paid to shareholders and taxable to the shareholders. This also applies to open end mutual funds.

2011-04-20T12:24:00.000-07:00

The Series 3 is a license to sell futures and commodities investments that is given by FINRA (NASD). American Investment Training offers course material to pass the Series 3 Exam. The course can be taken using our books and CD's or by taking the Online Course. Tests are included with the online class and the books.

Book and CD Study Material from American Investment Training

License

This license is primarily for working in the Forex and futures exchange. Series 3 brokers work in the secondary market of these securities. You do not need a sponsoring firm to sit for this test. The exam can be studied on your own time and you will receive your license after the exam is passed.
Visit:Series 3 Commodities Exam

FX Course

2011-03-15T07:59:00.000-07:00

Fully automatic Forex Course System where expert shows his methods for generating very high returns. Learn how each month can double your Forex investment Money. This is a course for people looking to make very serious and real money with a futures and forex system that can earn money 24 hours a day.
It is used by professionals & beginners alike with no experience whatsoever. You can start with as little as $500 USD on a real forex account or learn the ropes on a demo account without risking any real money at all. It works with all trading platforms because it is an independent program. You just have to feed it with market data and follow it's trading advice

Learn how to use this profit robot to show 100% or greater returns.

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Become a Stockbroker

2011-03-09T13:23:00.001-08:00

Learn how to become a Stockbroker, Trader, or Financial Planner and advisor. Get sponsored for the Series 7 exam or get set up as an independent broker - we show you how.

The Investment and financial job market is still wide open. Financial Jobs are out there. Know how and where to start. Stockbrokers and Financial Advisors are able to make an unlimited income.

People looking to build a career as a stockbroker or Financial Advisor will find this guide book to be the most informative career book available. Features such as: How to get sponsored for the Series 7 exam, finding the right stockbroker job, how much can you earn and more.

Go to:Become a Broker

CFA Online Course

2011-03-09T13:08:00.001-08:00

American Investment Training provides updated full prep courses for the CFA exam including classes live on DVD. Level 1 study prep for test taking.

FREE SHIPPING AND PASS GUARANTEE

Pass the CFA Level 1 Test the first time with a pass guarantee from American Investment Training. Our study material offers an online test software program of over 6000 questions, CFA Classes on DVD (over 46 hours!) and updated study notes and manuals. Our training comes with full support.

Pass Rate Guarantee. Pass the first time or WE pay YOU back for the exam cost. Applies to our complete course package and completion of our online test software. We are committed to you passing the Test!

Study notes and class DVD are the most powerful in the industry.

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Stock Market Quiz - Stock Market Game

2011-03-07T05:53:00.000-08:00

See how well you do taking this quick stock market trading list of questions.

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FX Trading Class - Online Trading Course

2010-10-27T06:41:00.000-07:00

Take an Online Course to learn how to make major profits trading the Forex. The FX Trading course class can really help traders, brokers or beginners.

American Investment Training has seen great success with this Forex Trading System and course Real Video DVD's given and it works 24 hours a day. It shows you how to have auto buys and sells put in on exchanges throughout the world!

Only A Few Copies Remain Of The Ground Breaking Forex Course Which Has Already Change The Lives Of Countless Ordinary People Globe Wide

Visit:
Forex Wealth Course

Covered Call Options - Free Options Tutorial

2010-09-29T11:22:00.000-07:00

Options and covered call strategies tutorial from American Investment Training.

Writing or selling covered calls generates premium income for the investor. The premium received lowers the break-even and creates a hedge on the stock position, should the stock go lower. If the option is exercised, the writer (seller) must deliver the stock at the strike price on the call. Since the options trader own the stock, the shares can be delivered out with no market risk on the option.
Learn More here: Covered Call Options - Courses also available.

Foreign Currency Trading Course

2009-11-11T05:12:00.000-08:00

Many of our students who took this very fast course and learned made over 1000% percent returns. It is an innovative 24/7 Forex auto system. Pretty incredible.

"You will not find a better and more profitable income opportunity in today's marketplace. Forex Trading Machine traders are generating incredible wealth day after day from the comfort of their home. Give me 5 minutes of your time and I will prove to you that this is an offer you cannot miss!"

FOREX Trading Machine - Price Driven Forex Trading (PDFT) is a method of trading the forex market without using any type of indicators, support or resistance levels, moving averages, pivots, oscillators, fibonacci, trend lines or ANY other trading tool you can think of. PDFT only uses the price of the currency pair and a time element. READ MORE OR BEGIN

Auto Robot Trading System

2009-10-18T11:24:00.000-07:00

$46,000 profit from $1000 in 10 days...and that is only one low end example. Learn to make incredible and automated profits on the Forex. Global 24 hour auto trading with proven profit techniques.

It's been over 10 years since Forex Automoney helps multiply assets of companies and individuals.

$400 million of trading profit in 2008 is a great summary of what we do. I'd like to congratulate all our current members and invite new individuals - with Forex Automoney giving you 3 great trading strategies and intraday signals you can make thousands of dollars each day just at the expense of a few clicks! No more thinking! Just trading and gaining profits!

FOREX (FOReign EXchange market) is an international foreign exchange market, where money is sold and bought freely. In its present condition FOREX was launched in the 1970s, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from supply and demand.

As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market. It is also the biggest liquid financial market. According to various assessments, money masses in the market constitute from 1 to 2 trillion US dollars a day.

(It is impossible to determine an absolutely exact number because trading is not centralized on an exchange.) Transactions are conducted all over the world via telecommunications 24 hours a day from 00:00 GMT on Monday to 10:00 pm GMT on Friday. Practically in every time zone (that is, in Frankfurt-on-Main, London, New York, Tokyo, Hong Kong, etc.) there are dealers who will quote currencies. What do you need to make money with Forex Automoney? First thing you need to trade Forex is a computer (PC or MAC) with Internet connection. You have a computer, right? It can even be a computer in an Internet cafe or library - it doesn't matter.

The second thing is money of course. You must sell or buy other currencies using your money. But all you need is $1! Yes - you can start trading with just ONE DOLLAR! You also need our membership but now we have a promotion now and it's dirty cheap!

The third, and the last needed is a knowledge when to sell or buy.

you'll also be given a detailed on-line manual with Forex basics

Your initial charge will be $4.95 for the three day trial period. After the trial period, the membership fee is $99.90/month until the subscription is cancelled.

FOREX EDUCATION FOR A LIFETIME - learn and be guided each month!

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Trading Solutions Software System

2009-05-31T10:44:00.000-07:00

If you are a day trader, you need a platform that will deliver live, streaming data as trades happen and real-time trading alerts for your intraday models. To gain an edge, you would like to utilize state-of-the-art artificial intelligence technologies that learn from historical intraday data to more accurately predict the future direction of securities. If this describes your needs, then TradingSolutions Real-Time is the product for you.

In addition to all of the capabilities that make TradingSolutions End-Of-Day so popular among swing traders, TradingSolutions Real-Time allows you to develop intraday models for day trading. These models can be based on 1-minute bars, 4-hour bars, or any periodicity in between. Once you have developed and backtested your intraday models, you can trade them in real-time using streaming data from eSignal, IQFeed, Prophet or Interactive Brokers data services. Whenever a new signal is generated by one of your models, a trading alert will immediately appear so that you can take advantage of the opportunity before it's gone!

TradingSolutions Real-Time is NOT just for hard-core day traders. It is for anyone who wants to obtain the following advantages associated with intraday trading:

Reduced Risk - Most people think of day trading as being more risky than swing trading. For those day traders that exit their positions at the end of the day, their risk is greatly reduced because they are not exposed to any losses due to overnight events. Also, potential losses due to events that occur during the trading day can usually be minimized with the use of stop loss orders. TradingSolutions enables you to simulate stop loss trades when backtesting your models.

More Accurate Models - When developing intraday models, the data does not need to go back as far into the past since there is much more data to work with. This allows you to model the current dynamics of the security you are trading, which tends to produce more accurate signals. The accuracy of intraday models is also helped by the fact that price changes that occur during the trading day tend to be mostly technical in nature and less due to external events such as earnings announcements.

Download TradingSolutions

Series 3 Study Course - Broker Training

2009-03-15T09:21:00.000-07:00

Become a licensed Series 3 broker by taking the American Investment Training Series 3commodities licensing course.

The Series 3 exam is the national commodity futures test. If you ever wanted to participate in the futures market trading contracts, options or engage in hedging strategies, this may be the certification and career for you. Adding licenses such as the Series 3 can add to your credentials in any investment career. If you do not have an impressive finance degree or other designations, this license will at least add to your credentials and give you some benefit when job hunting or going on interviews.

Preparing for the series 3 exam usually takes 6-8 weeks of 1-2 hours per day home study. The exam is a multiple choice test. The exam includes the following topics:

Definitions and introductions to cash contracts, forward contracts and futures contracts Understanding strategies and calculating gain and loss Options, Futures and Hedging Calculating initial margin deposits and additional margin Trading floor procedures and understanding functions of traders and brokers NFA (National Futures Association) rules and regulations Reporting rules and customer accounts

American Investment Training - #1 provider of Broker Training Courses

Series 3 Broker Commodity Courses

Your Stop Loss Is Critical When Day Trading Futures

2009-01-14T17:54:00.000-08:00

Stop loss orders are great insurance policies that cost you nothing and can save you a fortune. They are used to sell or buy at a specified price and greatly reduce the risk you take when you buy or sell a futures contract.

Stop loss orders will automatically execute when the price specified is hit, and can take the emotion out of a buy or sell decision by setting a cap on the amount you are willing to lose in a trade that has gone against you. Stop loss orders don't guarantee against losses but they drastically reduce risk by limiting potential losses.

With my system the only stop I use is what I call an emergency stop. My stop loss is automatically made when I make my initial trade at two points. It is only for emergencies, like news I wasn't expecting, or anything that will make the market gyrate drastically and I never enter a trade without it. However I never expect to use this stop loss to exit my trade. I simply will not let the market move against my trade entry more than a tick or two. If I find that I exited the trade too soon I just reenter the trade but if the trade continues to move against me I have saved the loss of one or two points per. contract. Usually I will only have to exit and reenter a trade one time if I have entered a trade to early. This means I only lose a small commission per contract instead of fifty dollars per point- per contract, when trading the e-mini, and taking what many consider a normal loss.

Trading the futures markets is a challenging but profitable opportunity for educated and experienced traders. However it is not easy, without a great trading system, and even traders with years of experience still incur losses. Finding a good trading system and trading in small increments with an emergency stop loss in place will allow those relatively new to futures trading to be successful. Once you have learned the skills you need to trade with consistent profits it will not be a problem but until that time it is absolutely critical that you do not take unnecessary losses. If you are new to trading futures you should never trade until you have a mentor with a trading system that gives you consistent profits.

A great way to protect profits if you have not established an exit strategy is the trailing stop. The trailing stop loss is an order that is entered once you enter your trade. Your stop price moves at a specified distance behind the market price. Trailing stops are raised when a price rises, in a long trade, but will remain stationary when it falls. Trailing will only occur when the market price moves in favor of the trade to which the order is attached. The trailing stop order is similar to the stop loss order, but you use it to protect a profit, as opposed to protect against losses. Trailing stops are designed to lock in profit levels and they literally trail along your increasing profit and adjust your stop loss levels accordingly. Often traders will find tailing stops confusing because they change them while in an open position. This is not a wise practice, and should be avoided. It is an indication that you are not sure of your trade and if one is not sure of a trade it would be wise to exit immediately. Trailing stops are ideal because they allow for further profit potential to enter due to momentum, while limiting risk. Trailing stops are an important component to a trader's risk management unless they have an exit strategy in their system that might serve them better.

The market order is the simplest and quickest way to get your order filled to enter a trade or to use as a stop loss. A market order is a trade executed at the current market price and they are often used to exit trades to ensure that the order has the best possible chance of execution. A market order to exit is simply an order used to exit the trade immediately. Be aware that in a fast-changing market sometimes there is a disparity between the price when the market order is given and the actual price when it is filled.

Stop loss orders are used to exit trades, and are always used to limit the amount of loss, but some day traders use them as their only exit, while other traders use them as a backup exit only. If one uses them as their exit they will risk more than is necessary and might want to find a better system to trade. Stop loss orders allow you to define your risks before you open a position and in my opinion that risk should be minimal. Stop loss orders are one of the easiest ways to increase your chances of survival when trading commodities and futures and they are a powerful risk-management tool.

Jim Canter is a day trader and developer of The Precise Day Trading System, reading charts without the use of indicators. For further
information go to....

www.futurecommodityonlinetradingsystem.com

Courses and Trading Platforms - Free Download:
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Forex Brokers - Be Careful Many of There Services Help You Lose!

2008-09-11T14:57:00.000-07:00

You have a choice of lots of good forex brokers but most traders don't really understand that many of the services they offer will see you destroy your account.
Let's make a couple of points clear about the majority of forex brokers:

They are market makers this means when you lose they win as they take your account on there book - there interest is in you losing to make money. Now is this a bad thing?

No not at all it's why they are able to offer you such a great service and the fact they win when you lose helps them provide a service.

Don't fall for the myth that brokers hunt stops and try and make you lose - brokers don't bother. They know that the trader will beat himself without any help from them, so they don't need to.

95% of trading accounts get wiped out and that ends up in the broker's pocket.

So they offer great services but most traders don't know what to expect from a broker and misuse them and fail and keep in mind the broker is playing the odds of most traders losing and if you cannot use the services they provide properly that's your fault.

Leverage

You can get up o 400:1 with most brokers today and that's great but high leverage in a novices hands soon leads to wipe out just because you get given bi leverage doesn't mean you have to use it all! 10 20:1 is enough for most traders especially novice ones.

Low Minimum

You can open an account with $50 online today and while this allows anyone to get involved trading $50.00 is pointless as you will get destroyed by random volatility and of course leverage if you use it. Sure anyone can trade but forex trading needs a capital base which can allow you to take a few losses so think in the 1 - 5,000 as a minimum and 10 - 20:1 leverage as the maximum you should use.

Forex trading is all about staying power you are going to lose at some point and have drawdown and you need to ride these periods out and you wont do that on 50 or 100 bucks. If that's all you have, forget forex trading.

Broker Trading Guides and Research

Most of the critical info provided in the guides is nothing of the sort its stuff you can get anywhere online. Do you really need to be told to cut losses and run profits or you must be disciplined? Research is normally news stories and obvious technical levels - if you want to lose follow there research!

Demo Account

A good idea on learning the basics of the trading platform waste of time in seeing if you can win at trading. Many traders are good in demo account and then blow their accounts up in real time. Real time trading involves pressure and without it you don't have an authentic trading experience.

When you get a broker keep in mind all you need to do is select them on the basis of pip spreads, ease and reliability of trading platform use and the security of your money and then all the services offered to you be careful of them as they are double edged sword.

Brokers don't make you lose, they provide you with the base to win and offer excellent services but make sure you understand them and use them correctly.

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Commodities Returns, Gains - Commodity Yields

2008-07-28T18:23:00.000-07:00

Hot To Yield Spectacular Gains From The Commodity Investment Boom

Whats your take on unfashionable investments? Investments and markets that are so hated that they are rarely talked about that have little or no mention in the financial media and near the bottom of their trend graphs?

I like them...sometimes. They are the ones with ten bagger potential gains of 1000% and more within a reasonable space of time. I say sometimes because all too often, investments are hated due to good reason theres a lot of wisdom in the price of any given market.

But the market does get it wrong sometimes. At any given time there are investments that should be far higher than their market price a correction will happen at some time and thats why I love looking at hated investments. Listing them. Waiting for the tide to turn. And getting in well before the crowd when the indicators are right.

Thats exactly why the commodities market has been on my radar for some time now heres a terrible performer that has performed sickly over the past two decades - adjusted for inflation the value of commodities investments during this period has declined significantly. And let me ask you something aside from small pockets (such as gold & oil) how much attention do you see general commodities getting? Do you see books about them when you peruse the investment section at your local bookshop? Do you hear your friends boasting about their most recent commodities investment? No because at the moment, despite the fact that prices are now moving north with some conviction, commodities are still unlovedand if as I believe they will continue to rise, this could be the start of a longer term commodities bull run and a very good time to invest.

Did you know that commodities prices have been heading upwards, almost un-noticed for some time now? Coffee, copper, wood and sugar are just a handful of the commodities that have enjoyed between 40% to 80% price growth per year in recent times. The exciting thing is that this could be just the start of a long commodities bull run and when you think that the majority of the investment world still avoids commodities like the plague, there could be exciting times when the world finally wakes up to smell the coffeequite literally.

The Case For Commodities Investment A simple Question Of Growing Demand & Falling Supply.

The sophisticated investor understands one thing whatever the current price of a product, its price will ultimately correct to reflect the basic demand versus supply equation. Yes, we get bubbles anyone that invested money in Useless Dot Com PLC around 2000 at a PE of about 967 will vouch for that. But ultimately, the market corrects itself overvalued markets and companies come crashing down with an almighty thud. And undervalued markets and companies get re-rated.

Why do they get re-rated? Because the market understands that there is an imbalance. In the case of Useless Dot Com PLC the market realized that the company (which by the way is fictitious) was just sitting on some cash with some far fetched business model with no underlying demand for its core business activity or product. The result is that the market valuation for Useless Dot Com PLC was trashed.

In the case of commodities, the market has no choice but to re-rate the market upwards because (as well see) there is a significant imbalance in the demand versus supply equation. Global demand is far higher than global supply and ultimately this will push prices up and up.

Why There Is Increasing Global Demand For Many Commodities, And Dwindling Supply.

The two rising super-powers China and India are developing rapidly at the moment and consequently are consuming more and more commodities to fuel this stunning growth. China (and its relatively youthful population) is already among the biggest global consumer for commodities including platinum, steel, copper, iron and several other metals. The country is experiencing a construction boom and this has resulted in an incredible thirst for raw and processed metals. India imports more gold and silver than any other nation, is investing heavily into its infrastructure and is the fourth largest global consumer of crude oil in the world.

Both India and China are developing into global super-powers and in order to do this, their level of consumption of commodities will be fierce and almost unsustainable over the next two decades.

Now is the right time to get involved with the commodities boom.

How You Could Be Looking At 1000% Gains Within Five Years With These SOARING Commodities. Free Report Worth $49: www.surefire-winners.com

The Nuts And Bolts Of Online Forex Trading

2008-07-28T18:17:00.000-07:00

The evolution of the foreign exchange trading in the 1970s brought about different strategies that cope up to fast evolving phase of the market. One of the latest innovations is currency Forex online trading.

One can earn as much money and make a fortune by trading online. Trading doesnt stop as long as monetary supplies are available. It is being dictated by several currencies that rise and fall against one another. There are 164 currencies and varies from Euro, Dinar, Ruble, Pound, Franc, Real, Yen, Peso, etc. A known fact is that the top currency in the Forex trading is US Dollar. Over $1.5 trillion US dollars are traded regularly. It is also notable that the currency trading leads all other kinds of trading.

There are several advantages and disadvantages to Forex online trading. To start with, here are some of the advantages:

1. Forex currency online trading eliminates the barriers that traditionally exist in other markets. Brokers ability to trade at the right time is not restricted.

2. Trading can be done 24 hours a day, 7 days a week.

3. The availability of the computers and internet allows for a real time transaction that is more rapid.

4. Lack of discipline by most traders can be eliminated by the use of systems in online trading. Losses which are the results of poor trading methods by certain traders are minimized.

5. Maximum profits are achieved by just following the technicalities of online trading. Once traders gained skills in online trading, they can be assured of stability and good market whether any currency falls or rises.

6. Online trading is accessible anytime and in any place. Traders can save a lot of money and time because middlemen are not required in any transactions; thus commission is omitted. All that is needed is an internet connection; traders can even work at home.

8. A wealth of information regarding Forex currency trading is available via the internet. A right timing for buying or selling a profitable currency can be done with just a click of the mouse. Traders can update themselves and monitor sudden changes in the exchange rate by a technical chart which contains information about the rise and fall of currencies.

As it seems, there are many advantages in trading online, however, there are also certain drawbacks such as:

1. There is an immense quantity of information about online trading that has to be analyzed and learn.

2. Complicated online systems are expensive and can eat all of the investments.

3. Some of the systems are highly technical. It will take time for traders to get used to certain systematic approach to trading.

4. Bad online trading system can prolong transactions thus can lead to unsatisfied or loss of good trading clients.

5. In the absence of middlemen, traders are doing transactions on their own; they may be carried away with the trend. No one will advise them whether buying a particular currency is profitable or not.

In engaging in Forex currency online trading, several important aspects should be taken into account. It is essential to understand the whole trading system. How will one follow and transact in trading if he doesnt know the discipline involved in it?

Another important factor is the online system one chooses to have good trading methods and faster access to target market. Choosing a fitted system can lead to a win-win situation to both the traders and their market.

Good management of money is also vital in Forex trading. Shortage in cash is one of the reasons why one trading company may incur losses and eventually goes bankrupt.

There are certain drawbacks in online Forex trading but one can get rid of these by choosing the best system. Changes are inevitable and adaptation to advance techniques is a sure means to survive in the trading industry.

Whether you're a beginner or a seasoned pro you'll discover the best Online Forex Trading tips, tricks, and techniques at www.tradingknowhow.com

Offsetting Futures - Offsetting Positions

2008-05-14T07:01:00.000-07:00

Offsetting is eliminating the obligation to make or take delivery of a commodity by liquidating a purchase or covering a sale of futures. This is affected by taking an equal and opposite position: either a sale to offset a previous purchase, or a purchase to offset a previous sale in the same commodity, with the same delivery date. If an investor bought an August gold contract on the COMEX, he would offset this obligation by selling an August gold contract on the COMEX. To offset an option, the same option must be bought or sold; i.e., a call or a put with the same strike price and expiration month.

Offsetting positions is taking an equal and opposite futures position to a position held in the cash market. The offsetting futures position constitutes a hedge; 2) Taking an equal and opposite futures position to another futures position, known as a spread or straddle; 3) Buying a futures contract previously sold, or selling a futures contract previously bought, to eliminate the obligation to make or take delivery of a commodity. When trading futures options, an identical option must be bought or sold to offset a position.

Become a FOREX Broker

Series 3 License

Long Hedge Trading Positions - Floor Trader

2008-02-01T12:38:00.000-08:00

More examples of long hedge and short hedge trading. Floor trading procedures and broker commodities formats, including CFTC.

The CFTC categories for reparations complaints include all of the following EXCEPT:

A) Summary decisional procedure
B) Forwarding decisional procedure
C) Formal decisional procedure
D) Voluntary decisional procedure

B: Forwarding decisional procedure is not a stated category by the CFTC regarding reparations.

An investor who is long corn and writes a corn futures contract has created a long hedge.

A) True
B) False

B: This is false. Long a commodity and short the future is a short hedge. The shorting of the contract is the hedge in this strategy. Buying a futures contract to go with a primary short position would be a long hedge.

A copy of the corporate resolution and corporate charter must be provided before a corporate account can begin trading.

A) True
B) False
A: All corporate new accounts must provide a copy of their corporate resolution and corporate charter.

Cash and futures prices on the same commodity will normally move in the same direction, based on changing economic indicators.

A) True
B) False

Correct answer is A: This is basically true. Negative or positive economic conditions will affect both in the same direction.

A person who is short a futures contract, and does not own the underlying commodity for the duration of the contract, could have an unlimited loss potential.

A) True
B) False

A: Since there is no offsetting position, this person could have an unlimited loss on the contract. The person does not have an established cost basis to make good on the contract.

Floor traders mainly trade for other trader customer accounts.

A) True
B) False

B: This is false. Floor traders normally trade for their own accounts. Floor brokers will trade for customers.

7. The cash market is also called the:

A) Futures market
B) Inverted market
C) Basis market
D) Spot market

D: The cash market is also referred to as the spot market. It can also be called the actual market as well.

premium basis occurs when futures prices are higher than cash prices.

A) True
B) False

B: This is false. A premium basis is when cash prices are higher than futures prices.

Position traders usually hold positions longer than one trading session or day.

A) True
B) False

A: This is true. Position traders will normally carry positions past one day. Day traders will normally close out positions in the same day or session.

Futures contracts do not have to trade only on futures exchanges.

A) True
B) False

B: This is false. Futures contracts must trade on designated futures exchanges.

Stockbroker Job

Contracts Futures Profits - Trading Commissions

2008-01-31T09:00:00.000-08:00

A trader assumes two long contracts in sugar at a price of 11.23 cents. The commission on each contract is $ 55. The trader liquidates his position when the price of sugar has advanced to $12.35 cents. The contract size is 112,000 lbs. The trader would have a net profit of:

Answer: The trader would make a profit of 1.12 cents per lb. The size of the contract is 112, 000 lbs. The profit per contract is $1254. The customer has two contracts. $1254 x two contracts = $2508. The commission is $55 per contract, for a total of $110. The net profit is $2508 - $110 = $2398.
Remember to take into consideration the number of contracts involved when determining your answer.

A customer buys 5 gold contracts on the Commodity Exchange (Comex) and sells them at a profit of $2.80 an ounce. The total commission on the 5 contracts is $250. The contract size is 100 troy ounces. The net profit on the trade is:
Answer: 5 contracts each of 100 troy ounces earn a total profit of => 500 x 2.80 = 1400
The net commission on 5 contracts is $250.
Hence the net profit is $1400 - $250 = $1150.

A trader buys four contracts of pork bellies at 35.40 cents. He sells them at 39.20 cents. The contract size is 40,000 lbs. His profit on transaction, disregarding commission, is:

Answer: The contract advanced by 39.20 – 35.40 = 3.8 cents. We would therefore multiply 40,000 by 0.038. This indicates a profit of $1520 on one contract. Since 4 contracts are involved, simply multiply this by four, which indicates a total profit of $6080.

A trader has $1800 invested in soybeans and soybean margin is 45 cents per bushel. Soybeans closed today at $5.25 per bushel. The soybean contract size is 5,000 bushels. What percentage of his position in soybeans does his margin money represent?

Answer: Margin = 0.45 = 8.57%
Market Price of Commodity 5.25
A customer is long three contracts of sugar at 9.45. He offsets the position when sugar is 11.45. Round-turn commissions are $45. The size of the contract is 112,000 lbs.
The net profit is:
Answer: The net profit is $6,585 calculated as follows:
Long 3 contracts @ 9.45
Offsets(sells) @11.45
Gross profit 2.00 c per pound
x112,000 pounds per contract
$ 2240 per contract
- 45 commission
Net profit $ 2195 per contract
x 3 contracts
$6,585

FUTURES TRADING COURSE

A trader takes a long position of three contracts of silver. He sells the contracts after the price advances by 221/2 cents. The size of the contract is 5,000 ounces. The total commission on the three contracts is $125. The trader’s profit is:
Answer: If the price advances 22 ½ cents, the total profit would be $ 3375 (15,000 ounces times 0.225). As the commission on the three contracts is $125, the net profit after deducting commission is $3,250.

A customer is long seven contracts of orange juice (OJ) at 1.2467. He liquidates the position at 1.5282. Round – term commissions are $37. The size of the contract is 15,000 lbs. What is the net profit or loss?
Answer: There is a net profit of $ 29,298.50 calculated as follows:
Buy 7 contracts @ 1.2467
Sell @ 1.5282
profit $ .2815 per pound
x15,000 pounds per contract
profit $4222.50 per contract
37.00 commission
net profit $4185.50 per contract
x 7 contracts
net profit $ 29,298.50

A trader has $1,300 invested in soybeans and soybean margin is 23 cents per bushel. Soybeans close today at $5.45 per bushel. The soybean contract is 5,000 bushels. What percentage of his position does margin money represent?

Answer: Margin is 23 cents. The price of soybeans is $5.45. As a percent, margin represents :
$0.23 ÷ $5.45 or 4.2%

Assume that the commission on a sugar transaction on the New York Coffee and Sugar Exchange is $47 per contract. The contract size is 112,000 lbs. If a trader has a long position of four contracts at 6.35 and he covers his position when the price has advanced to 7.35, what is the trader’s net profit:

Answer: Since each contract is 112,000 pounds and since the price advanced by one cent, simply multiply 112,000 by .01. This would indicate that the contract has advanced by a dollar amount of $1,120. The trader has four contracts, and thus we would multiply the profit received by one contract by four, indicating the gross profit of $4,480. The commission is stated to be $47 per contract. Therefore, the commission on four contracts would be $188. If we subtract $188 in commissions from the total profit of $4480, we are left with a net profit of $4,292.

FOREX COMMODITIES COURSE

Futures Spread, Hedge Traders - Call Put Position Spreads

2008-01-28T08:03:00.000-08:00

A buy stop order is usually used to protect an existing short position.

A) True
B) False

Correct answer is A: This is true. A short position is exposed if the market rises. Placing a buy stop order allows the customer to cover the position, should the market rise.

A trader buys one Treasury Bill call option for a premium of 1.75. The dollar amount paid for the call is:

A) $3,375
B) $10,750
C) $1,750
D) $4,375

Correct answer is D: A T-Bill premium of 1.75 equals 175 basis points, which is multiplied by 25. 175 times 25 = $4,375

Trades that take place in the cash market, are also called the spot market.

A) True
B) False

Correct answer is A: The cash market is also called the spot or actual market.

A trader buys 1 December 30 call and writes 1 December 20 call. This is a:

A) Call credit spread that is bullish
B) Call debit spread that is bullish
C) Call credit spread that is bearish
D) Call debit spread that is bearish

Correct answer is C: On calls, the lower strike price will have the higher premium. The value of the 20 call will have more intrinsic value throughout the life of both contacts, since the market will always be more above 20, than 30. Since the customer is shorting the 30 call, he received more in premium that the one he bought. This produces a credit and is bearish on the market.

Which of the following is a long silver straddle?

A) Long 1 October 300 call and long 1 October 310 put
B) Long 1 October 350 call and short 1 October 340 put
C) Long 1 October 300 call and short 1 October 310 call
D) Long 1 October 340 put and short 1 October 330 put

Correct answer is A: A long straddle is when someone is long a call and long a put. The investor is looking to “Straddle” both sides of the market by controlling a call and a put. This is a combination because the strike prices are different.

A premium basis occurs when futures prices are higher than cash prices.

A) True
B) False

Correct answer is B: This is false. Premium basis is when cash prices are higher than futures prices.

All of the following are true regarding speculators EXCEPT:

A) They add liquidity to the market
B) Their long positions are profitable when the market rises
C) They usually plan to own the commodity they are speculating on
D) They are also known as hedgers

Correct answer is C: Speculators do not usually look to own the commodity they are speculating on. Hedgers are not the same as speculators. Hedgers try to minimize risk, where Speculators take on risk.

A portfolio is valued at $3,500,000. The S&P 500 futures contract is trading 862.45. The value of the contract equals 250 times the index price. What is the number of contracts needed to hedge the portfolio?

A) 8
B) 16
C) 32
D) 14,000

The correct is B: Each contract provides a hedge of $215,612.50 (250 times 862.45). The portfolio value is $3,500,000 divided by $215,612.50 equals 16.2. 16 contracts rounded down would be needed.

Traders who normally keep their holdings over one trading session are known as
day traders.

A) True
B) False

Correct answer is B: Position trading is when traders hold their positions for more than one trading session. Day traders open and close positions during the same trading day.

A commodity pool with assets of $300,000 would need to send out customer statements:

A) Monthly
B) Quarterly
C) Semi Annually
D) Annually

Correct answer is B: Commodity pools with assets under $500,000 must send out statements quarterly. Pools with more than $500,000 in assets must send monthly statements.

A trader that is short wheat and buys a wheat futures contract has created a Long Hedge.

A) True
B) False

Correct answer is A: This is a long hedge. When someone is short a commodity, they will look to hedge the main position by going long on a futures contract. The contract is the hedge.

A person who creates a credit put spread is:

A) Bearish
B) Bullish
C) Neutral
D) None of the above

Correct answer is B: Credit put spreads are bullish. The trader earns the net credit premiums and hopes the options will expire. If the market moved up in a bullish direction, the options would expire and the investor would profit.

The NFA cannot issue a “cease doing business” to a firm without a pre-hearing.

A) True
B) False

Correct answer is B: This is false. The NFA does have authority to order a firm cease doing business, if they feel an infraction is serious enough. This can be done without a hearing.

Commodity pool management fees can be based on an incentive or performance basis.

A) True
B) False

Correct answer is A: As long as the compensation method is disclosed to the customer and the fees are fair, compensation can be performance based, fixed based or a flat dollar amount.

Which of the following is true regarding price limits?

A) They are set by the exchange
B) Contracts cannot trade above the price limit
C) Contracts cannot trade below the price limit
D) All of the above

Correct answer is D: All of the above are true. The board of directors of the futures exchange sets the Price limits. Contracts cannot trade at or below the limits.

Index Trading, Margin - Exchange Floor Broker

2008-01-28T07:59:00.000-08:00

Cocoa is quoted in terms of:

A) Bushels
B) Pounds
C) Metric tons
D) Barrels

Correct answer is C: Cocoa is quoted in metric tons.

Floor traders are not considered members of a future exchange.

A) True
B) False

Correct answer is B: This is false. Floor traders and floor brokers are considered exchange members.

A trader buys 3 stock index futures contracts with a component of 250 at 403.60. The margin deposited is $10,000 per contract. The market then closes at 400.75. What is the equity in the account?

A) $2,137.50
B) $12,137.50
C) $27,862.50
D) $32,137.50

Correct answer is C: The full initial deposit was $30,000 (10,000 times 3 contracts). The decline in market value resulted in a loss of 2.85 per contract (403.60-400.75). The component of the index is 250, so 2.85 multiplied by 250 equals $712.50 times 3 contracts = $27,862.50

A short hedge protects against rising prices.

A) True
B) False

B: This is false. A short hedge is used to protect against falling prices. A person who is long a commodity and shorts a futures contract is creating a short hedge against falling prices on the person’s long position.

Prices of futures contracts are determined by:

A) Agreements between members of the exchange
B) The CFTC
C) Bids and offers on the floor of the exchange
D) All of the above

Correct answer is C: Prices of futures are based on supply and demand determined by bids and offers on the floor.

Which of the following is a bear call spread?

A) Long one Sep 85 call and short one Sep 80 call
B) Long one Oct 90 call and short one Oct 95 call
C) Long one Jul 50 call and short one Jul 50 put
D) Long one Sep 60 call and long one Sep 60 put

A: A bearish call spread is created when 2 call options are bought and sold, and where the customer expects the market to decline, thus making his profit. If a person is long and 85 call and short an 80 call and the options expire, the net premium gain will be the profit. The options were exercised; the investor would lose money on the spread. The trader wants the market to go down and is bearish.

Which of the following does NOT have to register with the National Futures Association?

A) Commodity trading advisors
B) Commodity floor brokers
C) Commodity pool operators
D) Commodity Banks

Correct answer is D: Banks can register with the National Futures Association (NFA), but are not required to.

A trader buys one November 88 Treasury Bond calls at 1-28. The options are exercised when the November futures price is 92-16. What is the profit or loss on this trade?

A) $4,500 gain
B) $1,437.50 loss
C) $5,937.50 loss
D) $3,062.50 gain

Correct answer is D: 4-16/32 is the profit. $4,000 plus $500 (16 times $31.25), for $4500. The option premium which must be subtracted is 1-28/64 or $1437.50. The gain after subtracting the premium is $3,062.50.

A long hedger is looking to protect against falling prices.

A) True
B) False

Correct answer is B: This is false. A person with a long hedge is protecting against rising prices. A long hedge (buying a futures contract) is used with an existing short position. The short position will be profitable if the market declines. The long hedge is in place in case prices rise.

Additional margin that is required, as prices change is known as:

A) Initial margin
B) Original margin
C) Leverage margin
D) Variation margin

Correct answer is D: Variation margin is required during price fluctuation. Initial or original margin is deposited when a new contract is bought or sold.

Commodity Trading

Long Currency Strategies, Open Interest Futures Contracts

2008-01-27T06:34:00.000-08:00

Position limits are placed to prevent price manipulation of a commodity.

A) True
B) False

Correct answer is A: This is true. Position limits or speculative position limits assist in preventing price manipulation.

A normal market occurs when cash prices are higher than futures prices.

A) True
B) False

B: This is false. A normal market is when futures prices are higher than cash prices.

A new long position has been established. Open interest would:

A) Increase
B) Decrease
C) Stay the same
D) Cannot determine

A: Open interest increases when a new long or short position is established.

CFTC rules require that all customer funds in a commodity trading pool must be kept segregated.

A) True
B) False

A: This is true. The CFTC requires all customer money be kept separate.

Fees and commissions are NOT included on the confirmation mailed to customers.

A) True
B) False

B: This is false. All fees and commissions are disclosed to cusstomers and will appear on the confirmation.

Discretionary accounts require written power of attorney.

A) True
B) False

A: This is true. Customers must provide written power of attorney for discretionary accounts.

A trader is long corn and writes a corn futures contract. The trader has created a:

A) Long hedge
B) Buying hedge
C) Selling hedge
D) Short straddle

C: This is a selling or short hedge. The trader or hedger is long the commodity. As a hedge, he is shorting or selling the contract.

Floor brokers are also known as floor traders.

A) True
B) False

B: This is false. Floor traders trade for their own account. Floor brokers trade for customers.

Full audits of Futures Commission merchants are done at least once every:

A) 6 months
B) 12 months
C) 24 months
D) 36 months

C: Audits are conducted at least once every 2 years (24 months).

A forward contract holder can sell to another party on an exchange floor.

A) True
B) False

B: This is false. A forward contract is not transferable. A futures contract can be sold on an exchange.

Every futures contract will have a delivery month on it.

A) True
B) False

A: This is true. Each futures contract will be assigned a delivery month.

Being “Long wheat” is the same as being “Long a wheat contract”.

A) True
B) False

B: This is false. Being “Long” a commodity means the person owns the commodity. “Long” the contract does not mean long the commodity itself.

The initial margin is also called the:

A) Variation margin
B) Maintenance margin
C) Original margin
D) Restricted margin

C: The initial margin is also referred to as the original margin.

Promotional material must be pre-approved by an officer or supervisor prior to use.

A) True
B) False

A: This is true. All promotional material must be reviewed and approved by an officer, partner or supervisor.

Series 3 Commodities Broker

Futures Exchange - Currency Commodity Pool Trading

2008-01-27T06:27:00.000-08:00

Floor traders mainly execute orders for customers.

A) True
B) False

B: This is false. Floor traders trade for themselves out of their own trading account. They trade at their own risk and do not trade for customers.

All of the following are true regarding Position Limits EXCEPT:

A) Sets a limit on an amount of contracts that can be held by an individual or group
B) The Commodity Futures Trading Commission (CFTC) can set position limits
C) The exchange where the contract trades can set position limits
D) Position limits only apply to long positions

D: Position limits apply to “same side” control of contracts, long or short. The exchange or the CFTC can set the limits.

Futures contracts only trade on futures exchanges.

A) True
B) False

Correct answer is A: This is true. Futures law states that futures contracts only trade on designated futures exchanges.

Floor brokers usually trade for their own accounts.

A) True
B) False

Correct answer is B: This is false. Floor brokers trade for customer accounts. Floor traders normally trade for their own account.

Which of the following account types require prior approval of the exchange before a firm can trade for them?

A) Corporate accounts
B) Partnership accounts
C) Trust accounts
D) Investment Company accounts

D: Investment Company accounts must have approval from the exchange before a firm can trade for them. Investment companies are responsible for pools of money from investors. A check of the company’s finances and evaluation of the advisors is done.

All of the following can be ordered by the Regional Committee after a case has been concluded EXCEPT:

A) Censure
B) Fine up to $500,000
C) Cease and desist order
D) NFA suspension

B: The maximum fine that can be imposed is $250,000 per violation. All of the other orders can be imposed.

CFTC rules state that customer reparations must start no later than 2 years from the initial event.

A) True
B) False

A: This is true. The CFTC’s forum for customer complaints is for customers alleging violations against a firm or registered individual. The latest date that reparations can start is 2 years from the infraction date.

Commodities trading on an exchange must be delivered from exchange approved warehouses.

A) True
B) False

A: This is true. All warehouses must be approved by the exchange. This is the “point of delivery” that must be stated on each futures contract.

Open interest only applies to short sales.

A) True
B) False

B: This is false. Open interest refers to the total number of contracts that are open and have not been closed out or liquidated.

31. A commodity pool operator must maintain books and records for:

A) 1 year
B) 2 years
C) 3 years
D) 5 years

D: A commodity pool operator must maintain it’s books and records for 5 years.

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www.americastruth.com

Commodity Pool contracts, wheat futures hedge

2008-01-26T10:30:00.000-08:00

Commodity pools, position limits and hedging are shown on many of the following trading examples.

Position limits exist to limit price manipulation.

A) True
B) False

A: This is true. Position limits set the maximum number of contracts that can be held by individuals or groups.

Approving new futures contracts is done by futures exchanges.

A) True
B) False

This is false. The Commodity Futures Trading Commission (CFTC) approves all new futures contracts. It is a Government agency.

20 wheat futures contracts were bought and then 20 wheat futures contracts were sold during the last trading session. The volume on these contracts would be:

A) 10
B) 20
C) 30
D) 40

B: Volume is the total number of contracts bought or sold.

A person who is short corn and is long one corn futures contract has created a:

A) Selling hedge
B) Short hedge
C) Long spread
D) Buying hedge

D: This is a buying or long hedge. The purpose is to limit the loss exposure on a short position. The long contract allows the person to buy the commodity at a set price.

All facilities or warehouses that deliver actual commodity goods must be approved by the exchange.

A) True
B) False

Correct answer is A: This is true. This facility would be designated “regular for delivery”

All Futures Commission Merchants must be members of the National Futures Association (NFA).

A) True
B) False

A: This is true. Membership in the NFA is required for Futures Commission Merchants (FCM).

A commodity pool that has been in business for 8 years would need to disclose the performance history of the pool for the last:

A) 3 years
B) 5 years
C) 7 years
D) 8 years

B: Commodity pools that have been in business for 5 years or more, must disclose the performance history for the last 5 years. If a pool has been in operation for 8 years, they still would only be required to report the last 5 years.

The Commodity Futures Trading Commission (CFTC) CANNOT suspend or revoke a license based on a past violation.

A) True
B) False

B: This is false. The CFTC does have authority to suspend or revoke a license or registration based on a past infraction or violation.

Copies of promotional material must be kept on file for 1 year.

A) True
B) False

B: This is false. Promotional material copies must be kept for 3 years from last use.

20. How many consecutive years of experience must an associated registered person (non CTA) have to manage a discretionary account for a customer?

A) 5 years
B) 3 years
C) 2 years
D) 1 year

Correct answer is C: An associated person, who is not a Commodity Trading Adviser can exercise discretion over an account, only if they have 2 consecutive years of experience as a registered associate.

Customer money sent to Commodity Pool Operators must be in the name of the pool that the customer is getting involved in.

A) True
B) False

A: This is true. Money can be accepted by Commodity Pool Operators (CPO’s) for the purpose of investing in Commodity Trading Pools. The check must be in the name of the specific pool being invested in.

Commission Merchants, CTA, Futures Contracts

2008-01-26T10:13:00.000-08:00

Trade examples for spot, forward and futures commission traders and merchants. Each transaction is based on conrolling long positions on a commodity and creating long or short hedging positions on the contracts and strategies. Futures commission merchants and trading activities on the FOREX.

The Chicago Board of Trade has set a price limit on a wheat futures contract at 10 cents. The closing price the previous day was $1.00 per bushel. The price for this contract today could NOT trade at:

A) .88 per bushel
B) .91 per bushel
C) 1.10 per bushel
D) 1.05 per bushel

A: Price limits determine the limit on how high and how low a contract price can trade. Since the price limit was set at 10 cents, the contract cannot trade above $1.10 or below 90 cents.

A Futures Commission Merchant (FCM) acts as a brokerage firm for futures contracts.

A) True
B) False

A: This is true. Futures Commission Merchants are normally brokerage firms. They will solicit and receive money from customers for trade placing.

Cash and futures prices on a commodity normally do not move in the same price direction.

A) True
B) False

B: This is false. The price difference is not always the same and they may not move by an equal amount. The direction of price normally is the same.

Forex Broker Trading Course

The amount that is deposited for a buying or selling of a futures contract can be referred to as the original margin.

A) True
B) False

A: The original margin is the margin deposit required when buying and shorting contracts. This can also be called the initial margin.

All of the following are true regarding a Forward Contract EXCEPT:

A) It is an agreement between a buyer and a seller
B) It can be for any amount, if mutually agreed
C) It is transferable
D) A price and time of delivery is determined

Correct answer is C: A forward contract is an agreement between a buyer and seller. This agreement sets a price and time of delivery and can be for any amount that both parties agree to. It is not transferable (cannot be sold to a third party).

Which of the following customer accounts are allowed in the futures industry?

A) Individual
B) Corporate
C) Joint
D) All of the above

D: All of these account types are permitted. The documentation required will vary with each type. A corporation for instance, must provide a corporate resolution and corporate charter.

Third party discretion over an account is allowed, if the customer authorizes this discretion in writing.

A) True
B) False

A: This is true. Third party discretion is permitted if the customer submits the request in writing.

An arbitration case has been decided. The decision can be appealed.

A) True
B) False

B: This is false. Arbitration is a means of settlement between two parties in dispute. Both parties waive their right to appeal beforehand.

The cash price of a commodity is trading below the futures price. Which of the following is true?

A) This is an inverted market
B) This commodity is trading at a premium basis
C) This is a normal market
D) None of the above

C: This is a normal market. When futures prices are above cash prices, it also describes a discount basis. An inverted or premium basis would be when the cash price is above the futures price.

A new long position that has been opened would not increase the open interest.

A) True
B) False

B: This is false. Open interest will increase when a new long or short position is opened.

Cash Contracts Futures - Hedge Contracts, Trades

2008-01-25T14:20:00.000-08:00

A commodity exchange clearinghouse must update its records weekly:

A) True
B) False

Correct answer is B: This is false. A commodity exchange must update its records daily.

All of the following are true regarding Associated Persons EXCEPT:

A) They may be registered with more than one firm
B) They solicit customer orders
C) They are also known as Commodity Trading Advisors
D) A firm is responsible for their business conduct and activities

Correct answer is C: Associated Persons are not considered Commodity Trading Advisors.

Floor brokers can trade for their own account.

A) True
B) False

Correct answer is A: This is true. However, if a customer order has not been executed on the same item, a floor broker must “work” the customer order first.

A delivery of a commodity on a contract can only be made on the stated delivery month.

A) True
B) False

Correct answer is A: This is true. Each futures contract has a delivery month on it. Corn, for instance, will have delivery months of March, May, July, September and December.

Which of the following is NOT considered a commodity?

A) Gold
B) Wheat
C) Yen
D) Copper

Correct answer is C: Yen is a currency. Yen, along with other financial instruments have contracts on them and are traded. Those are called Financial Futures, not Commodities Futures.

Open interest only applies to short positions.

A) True
B) False

Correct answer is B: This is false. Open interest is the total number of contracts that are “open” (not been closed out yet). This applies to the long and short positions.

Cash contracts result in the immediate delivery of a commodity.

A) True
B) False

Correct answer is A: This is true. Cash contracts require the delivery of an underlying commodity.

A person is long wheat and shorts one wheat futures contract. This person has established a:

A) Short spread
B) Long spread
C) Buying hedge
D) Selling hedge

Correct answer is D: Long a commodity and shorting a contract on the same commodity, has established a selling hedge or short hedge.

Price limits can set the limit where contract prices can not go above or go below during each session.

A) True
B) False

Correct answer is A: This is true. A price limit set by the board of directors of the exchange. It applies to the “high” or “low” on a contract.

A futures exchange is NOT considered an auction market.

A) True
B) False

Correct answer is B: This is false. Futures exchanges are auction markets.

Which of the following is true regarding the Commodity Futures Trading Commission (CFTC)?

A) They approve new futures contracts
B) They oversee exchanges
C) They enforce futures price manipulation
D) All of the above

Correct answer is D: The Commodity Futures Trading Commission performs all of these functions.

Foreign futures exchanges are regulated by the CFTC.

A) True
B) False

Correct answer is B: This is false. The Commodity Futures Trading Commission (CFTC) only regulates U.S. exchanges.

A commodity pool disclosure statement will include the business background of the commodity trading adviser for the last:

A) 1 year
B) 2 years
C) 3 years
D) 5 years

Correct answer is D: The disclosure document in a commodity pool will show the past 5 years of the trading advisors business background. It will also show the background for all principals and the commodity pool operator.

Additional margin is also known as the variation margin.

A) True
B) False

Correct answer is A: This is true. If the market changes adversely, additional margin would be required. This is also known as the variation margin.

An offsetting trade must be done on the same exchange as the first trade.

A) True
B) False

Correct answer is A: This is true. A person who is short a contract can offset with a long position. This must be done on the same exchange. They also must be done for the same delivery month.

Series 3 Online Training - Become a futures forex broker and trader.

Position Trade - CTO Commodity Trading Positions

2008-01-25T14:17:00.000-08:00

Position traders normally open and close out a position during the same trading day.

A) True
B) False

Correct answer is B: This is a false statement. Position traders usually hold positions for more than one trading day or session. Day traders will open and close positions within a trading day.

Committing acts against the Commodity Exchange Act can result in fines up to:

A) $25,000
B) $50,000
C) $100,000
D) $250,000

Correct answer is C: Commodity Exchange Act violations carry monetary penalties up to $100,000.

A customer’s occupation does not appear on the new account form.

A) True
B) False

Correct answer is B: This is not a true statement. The occupation of the customer is considered relevant, and does appear on the new account form.

24. The deliverable grade of a commodity is also known as the basis grade.

A) True
B) False

Correct answer is A: This is a true statement. The deliverable grade is also referred to as the basis grade.

If the market goes in the opposite direction of a speculators position, the margin requirement will:

A) Go up
B) Go down
C) Fluctuate
D) Stay the same

Correct answer is A: Additional margin would be required if the market goes against the position taken. This is also known as variation margin.

Which of the following is true regarding promotional material?

I Material must be approved by a supervisor, partner or officer
II Records of promotion material must be kept for at least 3 years from last use
III They must not be misleading
IV Simulated performance is allowed if a specific warning is shown

A) I and III
B) II, III and IV
C) I, II and III
D) I, II, III and IV

Correct answer is D: Promotional material is allowed if the proper rules for using them are followed. This includes all of the choices above.

Full discretionary authority over a customers account can only be approved after a customer has granted the authority in writing.

A) True
B) False

Correct answer is A: Customers must grant discretionary authority in writing. However, timing discretion can be given verbally if the customer has specified the amount and position he wished to take.

All of the following appear on the CPO disclosure statement EXCEPT:

A) Limitations on trading
B) Where non-invested funds are placed
C) Description of fees
D) Profit potential

Correct answer is D: The profit potential is not on the disclosure statement.

Member firms must report all purchases and sales to the clearinghouse daily.

A) True
B) False

Correct answer is A: This is true. All clearing member firms report to the clearinghouse each trading session, reporting all purchases and sales of the day.

Commodity Trading Advisors or CTA’s must keep all of the following at their main office EXCEPT:

A) Copies of each confirmation
B) Name and address of each customer
C) Written customer authorization letters
D) Record of all verbal recommendations

Correct answer is D: Keeping a record of all verbal recommendations is not required. All of the others are required.

Contracts, Exchanges, Corporate FOREX

2008-01-25T11:54:00.000-08:00

When opening a new account, Corporations must provide the firm with a copy of the corporate charter and the corporate resolution.

A) True
B) False

Correct answer is A: This is a true statement. The corporate charter will show the company guidelines, including whether they can trade commodities. The corporate resolution authorizes the person to make decisions for the company.

Futures contracts can only be traded on futures exchanges.

A) True
B) False

Correct answer is A: This is a true statement. All futures contracts must be traded on a futures exchange.

A “normal market” is also called a (an):

A) Inverted market
B) Carrying charge market
C) Premium market
D) Both B and C

Correct answer is D: A normal market can also be referred to as a carrying charge market or a premium market. An inverted market is the opposite of a normal market.

Position limits only apply to long positions, not short positions.

A) True
B) False

Correct answer is B: This is a false statement. Position limits apply to long and short positions.

No hearing is required for NFA arbitration claims, if the amount is less than:

A) $1,000
B) $2,000
C) $3,000
D) $5,000

Correct answer is D: If a claim is less than $5,000, NFA arbitration is handled through written means. No hearing

Price limits are set by the board of directors of the exchange.

A) True
B) False

Correct answer is A: This is a true statement. The exchange, through its board of directors set all price limits (the price that contracts cannot trade above)

Customer account records of NFA members must be kept for:

A) 2 years
B) 3 years
C) 5 years
D) 7 years

Correct answer is C: NFA rules state that members must keep all customer records for 5 years.

Commodity pool operators do not segregate customer funds.

A) True
B) False

Correct answer is B: This is false. All commodity pool operators must segregate all customer funds.

A person who is short a commodity and long the contract, has created a:

A) Long hedge
B) Short hedge
C) Long spread
D) Short spread

Correct answer is A: Short the commodity and long the contract creates a long hedge or buying hedge. This is done to protect the short position in the event the market goes against (rises) the person.

People who participate in the futures market and willing to accept risk are known as speculators.

A) True
B) False

Correct answer is A: This is a true statement.

Forex Broker Career

Forex Strategies - Futures Trades

2008-01-25T11:45:00.000-08:00

The following are examples of futures and forex buying and selling with questions and answers.

Each strategy will produce profits or losses with commissions calculated on many of the trading examples. Long Hedging, shorting and options.

Margin requirements are usually higher for long positions versus short positions.

A) True
B) False

Correct answer is B: Margin requirements are equal for long and short transactions.

When opening a new account, which of the following customer information is required to be on the new account form?

I Address
II Occupation
III Educational history
IV Estimated annual income

A) I and II
B) I, III and IV
C) II, III and IV
D) I, II and IV

Correct answer is D: The NFA requires the new account form to include the address, occupation, and estimated annual income of the customer.

A risk disclosure statement must be sent to customers prior to trading.

A) True
B) False

Correct answer is A: This is true. All new customers, prior to trading, must be sent the risk disclosure statement.

A discount basis occurs when cash prices are above futures prices.

A) True
B) False

Correct answer is B: A discount basis is when cash prices are below futures prices. A premium basis occurs when cash prices are above futures prices.

An investor is short 1 wheat futures contract for June. Which of the following positions would offset or cover this position?

A) Long 1 wheat futures contract for May
B) Short 1 wheat futures contract for June
C) Long 1 wheat futures contract for June
D) Short 2 wheat futures contracts for June

Correct answer is C: To offset this short futures contract in June, one must be long this contract or the commodity. Long the contract in June would offset the short position. The hope is for a profit on the difference.

Forex Trading Course

The total number of buys and sells is known as the volume.

A) True
B) False

Correct answer is B: False. The volume describes the total number of contracts bought and sold.

Which of the following would be considered a short hedge?

A) Long the commodity and short the futures
B) Short the commodity and long the futures
C) Long the commodity and long the futures
D) Short the commodity and short the futures

Correct answer is A: A short hedge or selling hedge is when you are long the commodity (cash commodity) and short the futures contract on that commodity. A buying or long hedge would be shorting the commodity and buying the futures.

An introducing Broker cannot receive customer funds and securities.

A) True
B) False

Correct answer is A: This is a true statement. Introducing firms can take orders and process them, but they cannot accept funds or securities. This would need to be done through another clearing firm.

All of the following are prohibited regarding content of promotional material EXCEPT:

A) Promoting profit potential well above the risk of loss
B) Showing the past price performance of a commodity over the last 10 years
C) Failing to state material facts
D) Showing hypothetical results without a warning statement

Correct answer is B: Showing the price performance of a particular commodity over 10 years is allowed. The other items are a violation of the NFA and the CFTC.

The NFA will examine a firms business at least once every:

A) 3 months
B) 6 months
C) 1 year
D) 2 years

Correct answer is D: The National Futures Association will do a “full scope” audit of a firms business activities at least once every 2 years.