Series 3 — National Commodity Futures Exam — Study Guide
Free, topic-by-topic study notes for the Series 3 — National Commodity Futures Exam exam. Read a chapter, then practice it.
Futures Fundamentals
A futures contract is a standardized, exchange-traded agreement to buy or sell a set quantity and grade of an underlying commodity at a price agreed today, for delivery on a future date. This chapter covers the vocabulary, margin mechanics, order types, and account rules that every futures professional must know cold.
Hedging, Basis, and Spreads
Hedgers use futures to transfer price risk that arises from their cash-market business. This chapter explains long and short hedges, how basis links cash and futures prices, and how spread positions profit from changes in price relationships rather than outright direction.
Options on Futures
An option on a futures contract gives its buyer the right, but not the obligation, to establish a futures position at a set strike price. This chapter covers calls and puts, premiums, and the risk profiles that make options a flexible tool for speculators and hedgers alike.
Fundamental and Technical Analysis
Traders forecast futures prices using two broad approaches. Fundamental analysis studies the real economic forces of supply and demand, while technical analysis studies past price and volume behavior. This chapter contrasts the two.
Regulations (CEA, CFTC, NFA, AML)
The futures industry is governed by federal law and self-regulation. This chapter covers the Commodity Exchange Act, the CFTC as the federal regulator, the NFA as the industry self-regulatory organization, registration categories, position limits, required disclosures, and anti-money-laundering duties.
Practice by topic
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