Series 3 - National Commodities Futures

AAA

Orders And Price Analysis - Summary And Review

Summary
There are five basic types of trading orders, and five timing arrangements for them that are accepted on futures exchanges. There are three methods to analyze the anticipated direction futures prices: technical analysis, which examines prior trends and price patterns to determine future activity; fundamental analysis, which examines the factors affecting the underlying assets; and interest rate analysis, which examines governmental – fiscal and monetary - influences on the market.

Review

  1. Which is not a basic order recognized by futures exchanges?
    1. stop
    2. limit
    3. stop-limit
    4. market-if-touched
    5. None of the above.


  1. Which is closest in essence to a market order?
    1. GTC
    2. Fill-or-kill
    3. On-close
    4. OCO


  1. Which describes a series of trading days in which no significant change in price occurs?
    1. Congestion
    2. Gap
    3. Ascending triangle
    4. Descending triangle


  1. U.S. agricultural policies have a profound effect on all futures markets

True

False

  1. The Fed does not control:
    1. The discount rate
    2. Open-market operations
    3. Reserve requirements
    4. Tax policy

  2. Tariffs encourage competition.
    1. True
    2. False


  1. None of the following are examples of fundamental analysis except
    1. Point and Figure charts
    2. Substitution
    3. Bar charts
    4. Head and shoulder formations


  1. When traders exit the market
    1. Shorts Sell and longs buy.
    2. Open interest increases
    3. Shorts buy and longs sell
    4. Traders' hedging activity increases.


  1. A rising dollar affects domestic supplies of commodities
    1. False
    2. True


  1. Inelasticity of demand leads the search for fungible commodities
    1. True
    2. False
Answers
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