Chapter 2 Crunch time Flashcards
regulations
responsible for ensuring that the risk disclosure document is signed and dated at or prior to an account being opened
Associated person
For some customers, the best disclosure statement is
that trading futures is too risky.
Spread positions should not be described as….
having little risk.
Must include the components that make up the option premium (TV + IV), but not the actual premium
Option Disclosure Document
The customers account can still be opened should he/she….
refuse to disclose certain personal information
A margin agreement must be signed by ________ and there is no cash account for ____________.
all clients; commodities
allows an FCM to transfer funds to/from a client’s securities account
transfer agreement; supplementary agreement
FCMs must maintain a net capital equal to or in excess of
$1,000,000
IBs must maintain a net capital equal to or in excess of
$45,000
How long must NFA members keep books and records?
5 years
these limits only apply to speculators
speculative position limits
these limits apply to both speculators and hedgers
position reporting limits
What is the process that should take place if no transfer agreement is signed?
an FCM must obtain the client’s specific, written approval for each transfer
How many years of experience must an AP have in order to handle a discretionary account?
2 years
unless the AP is a CTA
excessive trading in an account in an effort to generate commissions
churning
