Futures Test

1. Why should futures traders understand contract specifications?

Because each contract has different tick size, tick value, and expiration Because all futures are the same Because specs guarantee profit Because brokers hide all prices

2. What does CL represent in futures?

Corn lots only Crypto leverage Call option Crude oil futures

3. What is a limit order?

A futures expiration An order to buy or sell at a specific price or better An order to avoid all losses A broker login

4. Which futures month code represents September?

Z U M G

5. What is a margin call?

A guaranteed profit alert A demand for more funds when account equity falls too low A broker advertisement A stock dividend

6. Which of these is a stock index futures contract?

USD Checking ES AAPL BTC Wallet

7. Why do most retail futures traders close before expiration?

To avoid market hours To avoid settlement or delivery issues To guarantee profit To receive free contracts

8. What is contract expiration?

The date a stock pays dividends The date a broker closes forever The date when a futures contract ends or must be settled or rolled The date taxes are due

9. What is physical delivery?

Delivery of the actual underlying commodity Receiving a dividend Buying an ETF Getting a broker email

10. What is a market order?

A dividend request A tax order An order that guarantees profit An order to buy or sell immediately at the best available price

11. What is a futures contract?

A bank savings account A crypto wallet An agreement to buy or sell an asset at a set price on a future date A company share

12. What are futures month codes used for?

To identify contract expiration months To identify tax refunds To identify dividend payments To identify broker passwords

13. Which futures month code represents June?

H Z M F

14. What does it mean to roll a futures contract?

Convert futures into stocks Cancel all losses Double the trade size Move from an expiring contract to a later contract month

15. Why is leverage risky in futures?

It can amplify both profits and losses It removes losses It eliminates volatility It guarantees income

16. What is the underlying asset in a futures contract?

A tax document A broker password A stock dividend The asset the contract is based on

17. Why were futures originally created?

To eliminate markets To replace stocks To avoid all losses To help producers and buyers hedge price risk

18. Which category includes S&P 500 and Nasdaq futures?

Energy futures Stock index futures Agricultural futures Currency futures

19. Which category includes corn, wheat, and soybeans?

Metals Currencies Agriculture Stock indexes

20. What is mark-to-market in futures?

A crypto transfer Daily adjustment of gains and losses A fixed contract price A stock dividend payment

21. What is cash settlement?

Getting a tax refund Paying with physical gold Settling the contract with money instead of delivering the physical asset Receiving company shares

22. What is volume in futures?

The company’s revenue The number of contracts traded during a period The broker’s account size The dividend amount

23. What is the main danger of futures trading?

There is no price movement Margins are always free Large losses can happen quickly because of leverage Contracts never expire

24. What is tick size?

The smallest price movement a futures contract can make A company dividend A chart color The broker’s monthly fee

25. Why do companies use futures for hedging?

To eliminate taxes To guarantee unlimited profit To avoid all business costs To protect against unfavorable price changes