Getting Started - Requirements

Preliminary Requirements
If you have a mailing address, two forms of ID and $115, you can take the Series 3 exam. You do not need a brokerage firm to sponsor you, like you might if you decided to take a test to qualify for some other financial services job. You don't even need a high school diploma.

The standards for taking the exam, then, are almost non-existent. Don't assume for a moment, though, that this is an exam for people who couldn't qualify for some other, more prestigious exam.

The Series 3 may be narrower in scope and shorter in testing time than the more widely recognized Series 7 exam – the one that stockbrokers and bond traders take – but that doesn't make it any easier.

You are about to commit a significant amount of time, energy and brain power. You should know what you're about to undertake before proceeding any further

Exam Contents
The exam is broken down into eight topics:

  1. Futures theory and terminology;
  2. Market operations;
  3. Orders and price analysis;
  4. Hedging;
  5. Spreading;
  6. Speculating in futures;
  7. Option hedging, speculating and spreading; and
  8. Regulation.

Of these, regulation is the most important. Not only does it account for 35 of the 120 exam questions, it is graded as a stand-alone test. You have to score 70% correct on the regulation questions in addition to 70% on the others – collectively called "market knowledge" – in order to pass the exam. You could score 100% on the market knowledge but, if you don't get at least 25 correct answers out of the 35 questions devoted to regulation, you fail the entire exam.

The test preparers further break down hedging into two sub-topics:

  1. Basic hedging, basis calculation and hedging commodity futures; and
  2. Hedging financial and monetary futures.

Speculating is similarly divided into:

  1. Speculating in commodity futures and
  2. Speculating in financial and monetary futures.
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