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Derivatives > Market Structure > Flashcards

Market Structure Flashcards

1
Q

Which of the following best describes what happens if there is an error in the trade-matching process?

A

There will be a delay in the settlement

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2
Q

Clearing house clearing members who wish to act for themselves and their direct clients only are classified as:

A

Individual clearing members

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3
Q

Who is only able to clear trades on behalf of themselves and their clients?

A

Individual clearing member

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4
Q

Individual clearing member

A

The orders of both buyers and sellers of securities will be placed displaying the price at which they are willing to buy or sell

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5
Q

A cross trade occurs when:

A

A member conducts offsetting trades in the same security for two different clients

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6
Q

Which of the following is the best definition of exchange traded?

A

On any exchange

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7
Q

Which of the following commodities is traded on ICE futures Europe?

A

Energy

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8
Q

Which of the following is TRUE concerning block trades on ICE Futures Europe?

A

The trade does not have to be executed at the prevailing market price

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9
Q

Universal Trading Platform is used on which of the following exchanges?

A

Euronext Derivatives

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10
Q

Profit / loss = ticks moved x tick value x no. of contracts:

A

Profit / loss = ticks moved x tick value x no. of contracts:

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11
Q

When acting as an agent on behalf of a principal, an agent may:

A

Enter into contracts on behalf of their principal
Settle contracts using their own funds
Charge the principal commission
Allocate a proportion of trades to their own account

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12
Q

A trade published with a code K would be?

A

Block trade

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13
Q

Which of the following is TRUE of a block trade on ICE Futures Europe?

A

The counterparties are required to ensure the price represents fair value

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14
Q

The counterparties are required to ensure the price represents fair value

A

UCP

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15
Q

Which of the following is a characteristic of an Exchange for Physicals (EFP) contract?

A

It allows firms to trade in a physical market place

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16
Q

What actions are a non-clearing dealer member of an exchange permitted to do?

A

Trade for themselves only

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17
Q

Trade for themselves only

A

Price and time

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18
Q

Which of the following is a feature of Euronext’s Universal Trading Platform system?

A

Order driven

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19
Q

Which of the following are NOT functions of Universal Clearing Platform?

A

Risk management

Margining

20
Q

What is a cross trade?

A

A security purchased by one client from another client who both use the same broker

21
Q

In a trade registration system, when is a trade considered to be registered?

A

When it is ready for clearing

22
Q

What is the main source of information for an exchange price feed?

A

Exchange trading systems

23
Q

What is the best definition of kerb trading?

A

A trade carried out at the end of normal trading

24
Q

A broker opens a position in the Nikkei 225 futures market on the CME and closes it on SGX. How is this described?

A

Mutual offset

25
Q

Which of the following is a benefit of a block trade?

A

Prices can be agreed away from the order book

26
Q

In an open outcry trade, who starts the process?

A

Customer

27
Q

What is shown in the touch strip on electronic/screen-based trading systems?

A

Best bid/offer price

28
Q

Execution of trades on an exchange for a non-member can be achieved via:

A

A broker dealer

29
Q

EFP arrangements occur:

A

Ex pit

30
Q

On which of the following systems do Euronext’s commodity products, such as white sugar, trade?

A

UTP

31
Q

Which of the following is known as the trading system for ICE Futures Europe?

A

Connect

32
Q

A floor dealer working on an open outcry exchange carries out trades on behalf of another brokerage house. Once the trade is done, the floor broker passes the trade back to the originating firm. This is called:

A

A give-up

33
Q

In a traditional open outcry market who starts the order process?

A

The client

34
Q

A floor broker working on an open outcry exchange carries out trades on behalf of another brokerage house. Once the trade is done, the floor broker passes the trade back to the originating firm. This is called:

A

Give-up

35
Q

A firm who is a member of an exchange which can only trade on behalf of its clients is called:

A

broker

36
Q

Which of the following systems allows a firm to allocate trades to the correct account?

A

UCP

37
Q

The price at which an exchange of futures for physical (EFP) is agreed is:

A

The price agreed by the counterparties

38
Q

Which of the following is the best definition of dual trading on exchange?

A

A member firm trades for its own account and that of a client irrespective of time

39
Q

Exchange clearing members who wish to clear for themselves and their direct clients only are classified as:

A

Individual clearing members

40
Q

On which of the following US exchanges would you find oil derivatives?

A

NYMEX

41
Q

An exchange’s trade registration system has all of the following functions, except:

A

Trade settlement

42
Q

What needs to be reported on an execution of a block trade?

A

Time
Price
Volume

43
Q

Which of the following contracts is physically delivered?

A

Euro future

44
Q

Who is only able to clear trades on behalf of themselves and their clients?

A

Individual clearing member

45
Q

Individual clearing member

A
  • Individual
46
Q

All of the following are taken into account when prioritising orders on an exchange order book system, except:

A

Underlying asset

47
Q

The minimum price movement on a futures contract is:

A

A tick

Derivatives (15 decks)

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