A speculator buys and sells rapidly for small profits or losses and holds positions only a short time within a trading session. This trader is a:CFTC Glossary, Scalper. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (scalper, position trader).
A trader has bought two December wheat futures. Which trade offsets the position?CFTC Glossary, Offset. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (offset provisions).
An inverted futures market, with the nearer months priced above the more distant months, is characteristic of markets with:CFTC Glossary, Inverted Market. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (inverted markets, supply shortages).
Cash corn is $4.10 a bushel and the nearest futures contract is $4.35. Calculated the usual way, as cash minus futures, what is the basis?CFTC Glossary, Basis. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (basis).
Show all 51 questions (47 more)
Futures theory and terminology, continued
How does a forward contract differ from a futures contract?CFTC Glossary, Forward Contract. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (futures and forward contracts compared).
Prices in succeeding delivery months are progressively higher than in the nearest delivery month. What is this market situation called?CFTC Glossary, Contango. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (the structure of futures markets).
What does open interest count?CFTC Glossary, Open Interest. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (general futures terminology).
What is first notice day?CFTC Glossary, First Notice Day. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (first notice day).
Which body clears and settles futures trades and is charged with assuring the proper conduct of each contract's delivery procedures?CFTC Glossary, Clearing Organization. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (the clearinghouse function).
Which costs make up the carrying charges on a stored physical commodity?CFTC Glossary, Carrying Charges. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Part 1, Futures Trading Theory and Basic Functions Terminology (carrying charges).
Margins, limits, delivery and exercise 6
The buyer of a cash commodity transfers to the seller a matching amount of long futures contracts at an agreed price difference. What is this transaction called?CFTC Glossary, Exchange for Physicals (EFP). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (delivery: EFPs).
From which price is a futures contract's daily price limit measured?CFTC Glossary, Limit (Up or Down). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (price limits).
Gold futures trade at $1,150. A call with a strike price of $1,100 costs $70. How much of the premium is time value?CFTC Glossary, Intrinsic Value; Time Value. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (options premiums: intrinsic value, time value).
The holder of a call option on futures exercises it. What must the option writer who is assigned do?CFTC Glossary, Assignment. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (options exercise, assignment).
Initial margin on a contract is $3,000 and maintenance margin is $2,200. Equity in a one-contract account falls to $2,000. How much does the margin call ask for?CFTC Glossary, Margin Call. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (margin calculations).
What is margin on a futures position?CFTC Glossary, Margin. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Futures Margins, Options Premiums, Price Limits, Futures Settlements, Delivery, Exercise, and Assignment (the nature of futures margin).
Orders and price analysis 5
A customer enters a limit order without marking it good till canceled, and it is not filled. When does it expire?CFTC Glossary, Good Till Canceled Order (GTC). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Types of Orders, Customer Accounts, Price Analysis (good till canceled).
A stop limit order goes into force when there is a trade at the specified price. At what price can it then be filled?CFTC Glossary, Stop Limit Order. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Types of Orders, Customer Accounts, Price Analysis (stop-limit orders).
In technical analysis, what is a price area where new selling is expected to emerge and dampen a continued rise?CFTC Glossary, Resistance; Support. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Types of Orders, Customer Accounts, Price Analysis (technical price analysis: support and resistance).
Where is a sell stop order placed in relation to the current market price?CFTC Glossary, Stop Order. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Types of Orders, Customer Accounts, Price Analysis (stop orders).
Which order becomes a market order when a particular price is reached, with the sell order placed above the market?CFTC Glossary, Market-if-Touched (MIT) Order. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Types of Orders, Customer Accounts, Price Analysis (market-if-touched orders).
Hedging and the basis 5
A farmer sells November soybean futures at $12.00. At harvest he sells the crop in the cash market at $11.20 and buys back the futures at $11.50. Before costs, what net price per bushel did he receive?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Basic Hedging, Basis Calculations, Hedging Futures (hedging calculations: net price received).
A grain elevator holds unsold wheat and fears lower prices. Which futures position is the hedge?CFTC Glossary, Selling Hedge (or Short Hedge). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Basic Hedging, Basis Calculations, Hedging Futures (short hedging).
A manufacturer buys copper futures at $4.00 a pound. Three months later it buys copper in the cash market at $4.30 and sells the futures at $4.25. Before costs, what net price per pound did it pay?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Basic Hedging, Basis Calculations, Hedging Futures (hedging calculations: net price paid).
A short hedger sold futures at $12.00 when the cash price was $11.60. Later the cash price is $11.20 and futures are $11.50. How did the basis change?CFTC Glossary, Basis. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Basic Hedging, Basis Calculations, Hedging Futures (the basis: effect of a basis change on the short hedger).
An airline hedges its jet fuel purchases with heating oil futures, a different but price-related commodity. What is this called?CFTC Glossary, Cross-Hedge. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Basic Hedging, Basis Calculations, Hedging Futures (hedging futures).
Spreads and speculation 5
A speculator buys two crude oil futures at $70.00 a barrel and sells them at $72.50. Each contract is 1,000 barrels. What is the gross profit?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Speculating in Futures (gross profit on speculative trades).
A speculator makes a gross profit of $5,000 on two contracts. The round-turn commission is $25 a contract and the initial margin was $5,000 a contract. What is the net return on the margin deposited?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Speculating in Futures (effect of commissions; return on margin).
A trader buys July corn futures and sells December corn futures. What kind of spread is this?CFTC Glossary, Interdelivery Spread. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Spreading (common types of spreads).
A trader buys one July corn contract at $4.50 and sells one December contract at $4.70. Later July is $4.65 and December is $4.75. Each contract is 5,000 bushels. What is the result before commissions?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Spreading (profit and loss on a spread).
What does a trader buy and sell to put on a crush spread?CFTC Glossary, Crush Spread. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Spreading (intermarket spreads).
Options on futures 6
A speculator buys a crude oil call with a strike price of $80 and pays a premium of $3 a barrel. Before commissions, at what futures price at expiration does the position break even?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (long call: breakeven point).
A trader buys a 50 call for 4.00 and sells a 55 call for 1.50, same expiration. Before commissions, what is the most the spread can make?Arithmetic on the figures in the question. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (call bull spreads: maximum profit and loss).
A trader buys a put and a call with the same expiration date and the same strike price. What is the position called?CFTC Glossary, Straddle; Strangle. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (general options terminology).
An option has a delta of 0.4. The underlying futures price rises by $2.00. By about how much is the option's price expected to change?CFTC Glossary, Delta. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (the delta).
What does a call option on a futures contract give its buyer?CFTC Glossary, Call. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (option theory).
Which pair of options, with the same expiration date and strike price, creates a synthetic long futures position?CFTC Glossary, Synthetic Futures. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Option Hedging, Speculating, Spreading (synthetic options and futures).
Regulations 14
A commodity pool had net assets of $2 million at the start of its fiscal year. How often must its operator distribute an Account Statement to participants?CFTC regulations, 17 CFR Part 4 (commodity pool operators and commodity trading advisors), 17 CFR 4.22(b). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (CPO/CTA regulations: records and reports).
A commodity pool operator may not use a Disclosure Document dated more than how long before the date of its use?CFTC regulations, 17 CFR Part 4 (commodity pool operators and commodity trading advisors), 17 CFR 4.26(a)(2). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (CPO/CTA regulations: disclosure documents).
A CTA's brochure shows hypothetical results of a trading system. What does NFA Compliance Rule 2-29 require the brochure to include?NFA Compliance Rule 2-29, Communications with the Public and Promotional Material, section (c). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (promotional material, NFA Compliance Rule 2-29).
A customer hands an introducing broker a check for margin. When may the IB accept it?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (FCM/IB regulations: rules for acceptance of customer funds).
An FCM signs a guarantee agreement with an introducing broker. What follows for the FCM?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs, Requirements for a Guarantee Agreement. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (guaranteed and independent IBs: responsibilities of guarantor FCM).
By when must a Member provide risk disclosure to a new futures customer under NFA Compliance Rule 2-30?NFA Compliance Rule 2-30, Customer Information and Risk Disclosure, section (b). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (customer information and risk disclosure, NFA Compliance Rule 2-30).
For how long a period must a CTA's Disclosure Document show the annual rate of return of the offered trading program?CFTC regulations, 17 CFR Part 4 (commodity pool operators and commodity trading advisors), 17 CFR 4.35(a)(1)(vii). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (CPO/CTA regulations: performance records).
For how long must an Associate have been continuously registered before a Member FCM or IB may let the Associate exercise discretion over a customer's futures account?NFA Compliance Rule 2-8, Discretionary Accounts, section (c). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (discretionary accounts: AP minimum experience requirement).
For how long must an FCM or IB keep its required books and records?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs, Basic Records. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (FCM/IB regulations: records).
Under NFA Compliance Rule 2-30, which information must a Member obtain from a customer who is an individual?NFA Compliance Rule 2-30, Customer Information and Risk Disclosure, section (c). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (customer information and risk disclosure, NFA Compliance Rule 2-30).
What does NFA Bylaw 1101 prohibit?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (NFA membership).
What must a Member have before it uses discretion in the commodity futures account of a customer?NFA Compliance Rule 2-8, Discretionary Accounts, section (a). Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (discretionary accounts: written authorization).
When may NFA bring a Member Responsibility Action?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (NFA disciplinary procedures: member responsibility actions).
When must an FCM time-stamp a customer's futures order?NFA Regulatory Requirements for FCMs, IBs, CPOs and CTAs, Customer Orders. Outline: NFA Study Outline for Futures Industry Exams, Series 3, Regulations (time-stamping requirements).
How this list was compiled: Our own questions, written to the major subject areas of the Series 3 examination that National Futures Association publishes in its Study Outline for Futures Industry Exams (https://www.nfa.futures.org/registration-membership/study-outlines/index.html#series3, read 2026-10-09). The examination has two parts, market knowledge and regulations, and the outline prints no weights for the subject areas. The bank holds 37 market knowledge questions (theory and terminology 10, margins, limits, delivery and exercise 6, orders and price analysis 5, hedging and the basis 5, spreads and speculation 5, options 6) and 14 on regulations. Every fact was read on 2026-10-09 in the public text the question names: the CFTC Glossary (https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/CFTCGlossary/index.htm), NFA's Regulatory Requirements guide (https://www.nfa.futures.org/members/member-resources/files/regulatory-requirements-guide.pdf), NFA Compliance Rules 2-8, 2-29 and 2-30 in the NFA Rulebook, and CFTC regulations on ecfr.gov (17 CFR Part 4). Twelve questions are arithmetic, worked a second time from the numbers in the question. Licence: Questions, choices and explanations are original work of this site.
How it works
These Series 3 practice test questions were written for this site from NFA's published study outline: 51 on futures, hedging, spreads, options and the rules. Unofficial, and not affiliated with National Futures Association or FINRA, which gives the exam.
Read the full guide
Two parts, and each must be passed
The real exam has 120 scored questions in two and a half hours, in two parts: market knowledge and regulations. NFA requires 70 percent on each part, so a strong score on one cannot carry the other.
What the bank covers
Market knowledge follows the outline's headings: theory and terminology, margins and delivery, orders and price analysis, hedging and the basis, spreads and speculation, and options. Fourteen questions cover regulations, from NFA Compliance Rules 2-8, 2-29 and 2-30 to the CFTC's Part 4.
A timed run
Exam mode draws 40 questions with 50 minutes on the clock, the real pace, and marks the result against 70 percent overall.
On a hedge question, work out the futures gain or loss first, then add it to the cash price.
Basis is cash minus futures. Write both prices down before deciding whether it strengthened or weakened.
Questions and answers
Is there an NFA Series 3 study guide?
NFA publishes a free study outline, not a study guide. It lists every subject area of both parts and is on NFA's Study Outlines page. Each answer here names the outline heading it belongs to and a public source to read.
Is this Series 3 practice test free?
Yes, with no sign-up. Every question was written for this page from public texts such as the CFTC Glossary and the NFA rulebook. None comes from the real exam or from a review course.
How many questions are on the Series 3 exam?
120 scored questions, true or false and multiple choice, in two hours and 30 minutes. NFA adds five experimental questions that are left out of the grade.
What is a passing score on the Series 3?
70 percent on each of the two parts, market knowledge and regulations. A candidate who reaches 70 percent overall but misses it on one part has not passed.
Do I need a sponsor to take the Series 3?
No. NFA says no futures industry exam requires a sponsor. Enrollment and the $140 fee go through FINRA, which administers the exam, and fees are not refundable.