STC EXAM 2025 WITH 100%
CORRECT ANSWERS
switch order - CORRECT ANSWER✔✔order whereby the trader offsets his original position
through an opposite trade on the same exchange in the dame delivery month and at the same
time re-establishes his original position in a later delivery month
Commodity Futures Contract - CORRECT ANSWER✔✔agreement entered into between a buyer
and seller on the floor of an exchange
standardized contract set by a particular exchange that will include the size, the point for which
delivery will be made, which is a warehouse or depository approved by the exchange, the grade
of the commodity that is to be delivered, and the price of the transaction
Commodity Futures Buyer - CORRECT ANSWER✔✔to take delivery of the cash commodity and
pay the seller the contract price
Commodity Futures Seller - CORRECT ANSWER✔✔deliver the cash commodity for which he will
receive the contract price
Offsetting definition - CORRECT ANSWER✔✔both the buyer and the seller may remove the
obligation of making and taking delivery of the cash commodity
Cash Forward Transaction - CORRECT ANSWER✔✔an agreement between buyer and seller for
the delivery of a specified amount of the cash commodity to be delivered at a specified time
and price at a specified delivery point
,Cash Forward Contract - CORRECT ANSWER✔✔could be for any amount of the cash commodity
and for any quality as agreed by the buyer and seller
non-transferable agreement between the buyer and the seller
Futures Contract - CORRECT ANSWER✔✔are always for specific amounts of the commodity and
for a specific grade of the commodity
both the buyer and the seller may transfer their obligation to a third party without permission
is negotiated on an exchange, with is a central marker where all purchases and sale orders are
channeled to a single location
if the price moves in an adverse direction, causing a decrease in equity, the member firm would
be required to deposit additional margin
Transaction in Futures - CORRECT ANSWER✔✔is made on the floor of the exchange between
brokers who are members of the exchange
Cash Forward Contract vs. Futures Contract - CORRECT ANSWER✔✔futures contract is not
personally negotiated between the buyer and the seller it is always for a specified grade and
amount of the commodity and it is delivered from locations and times specified in exchange
rules
corner exists "squeeze" - CORRECT ANSWER✔✔an individual or group of individuals acting in
concert accumulates all or substantially all of the available supply of a commodity. By controlling
the cash commodity, they are able to dictate the pride that a seller must pay for the cash
commodity in order to make-delievery on his short position
long - CORRECT ANSWER✔✔is used to describe an individual who has an actual cash position
,if he has purchased a futures contract that is still open
short - CORRECT ANSWER✔✔is used to describe an individual who has an obligation to deliver
the cash commodity but does not own it
sold a futures contract that is still open
hedge - CORRECT ANSWER✔✔is the establishment of a futures position that is opposite to a
cash position
purpose is to establish a temporary substitute for a cash market transaction that will be made at
a future date
to shift his risk of loss on the cash commodity due to adverse price change
making a futures purchase or sale to serve as a temporary substitute for a cash market
transaction that he will make at a later date
Speculator - CORRECT ANSWER✔✔individual who buys a commodity if he anticipates a price
rise or sells a commodity if he anticipates the price decrease
buy and sell futures for the purpose of making a profit
long (buys futures) position when he anticipates that the price will rise
short position (sells futures) when he anticipates that the price will fall
, futures exchange - CORRECT ANSWER✔✔producer or user of the cash commodity will be able
to obtain credit from banks and other lenders at a more favorable rate if his position is hedged
CFTC Commodity Futures Trading Commission - CORRECT ANSWER✔✔responsible for
supervising trading
exchange - CORRECT ANSWER✔✔provide facilities for members to conduct trading in
commodity futures and to ensure that members conduct business in a manner that is just as
equitable
the grades that are believable, the delivery months, how and where delivery will be made and
the size of the contract.
establishes the amount of margin that a customer must deposit initially and that he must
maintain in his account subsequently
establishes rules for the prevention of price manipulation
designates which warehouse are "regulatory for delivery," which means those that may be used
as depositories from which deliveries are made
for inspection of the cash commodity by inspectors who are licensed by the exchange
Arbitration exchange Committee - CORRECT ANSWER✔✔settles disputes arising between
members, member firms, and the public
Business conduct exchange committee - CORRECT ANSWER✔✔investigates complaints against
members, acts to prevent price manipulation, and supervises the conduct of members,
members firms and their employees to ensure compliance with the appropriate rules
CORRECT ANSWERS
switch order - CORRECT ANSWER✔✔order whereby the trader offsets his original position
through an opposite trade on the same exchange in the dame delivery month and at the same
time re-establishes his original position in a later delivery month
Commodity Futures Contract - CORRECT ANSWER✔✔agreement entered into between a buyer
and seller on the floor of an exchange
standardized contract set by a particular exchange that will include the size, the point for which
delivery will be made, which is a warehouse or depository approved by the exchange, the grade
of the commodity that is to be delivered, and the price of the transaction
Commodity Futures Buyer - CORRECT ANSWER✔✔to take delivery of the cash commodity and
pay the seller the contract price
Commodity Futures Seller - CORRECT ANSWER✔✔deliver the cash commodity for which he will
receive the contract price
Offsetting definition - CORRECT ANSWER✔✔both the buyer and the seller may remove the
obligation of making and taking delivery of the cash commodity
Cash Forward Transaction - CORRECT ANSWER✔✔an agreement between buyer and seller for
the delivery of a specified amount of the cash commodity to be delivered at a specified time
and price at a specified delivery point
,Cash Forward Contract - CORRECT ANSWER✔✔could be for any amount of the cash commodity
and for any quality as agreed by the buyer and seller
non-transferable agreement between the buyer and the seller
Futures Contract - CORRECT ANSWER✔✔are always for specific amounts of the commodity and
for a specific grade of the commodity
both the buyer and the seller may transfer their obligation to a third party without permission
is negotiated on an exchange, with is a central marker where all purchases and sale orders are
channeled to a single location
if the price moves in an adverse direction, causing a decrease in equity, the member firm would
be required to deposit additional margin
Transaction in Futures - CORRECT ANSWER✔✔is made on the floor of the exchange between
brokers who are members of the exchange
Cash Forward Contract vs. Futures Contract - CORRECT ANSWER✔✔futures contract is not
personally negotiated between the buyer and the seller it is always for a specified grade and
amount of the commodity and it is delivered from locations and times specified in exchange
rules
corner exists "squeeze" - CORRECT ANSWER✔✔an individual or group of individuals acting in
concert accumulates all or substantially all of the available supply of a commodity. By controlling
the cash commodity, they are able to dictate the pride that a seller must pay for the cash
commodity in order to make-delievery on his short position
long - CORRECT ANSWER✔✔is used to describe an individual who has an actual cash position
,if he has purchased a futures contract that is still open
short - CORRECT ANSWER✔✔is used to describe an individual who has an obligation to deliver
the cash commodity but does not own it
sold a futures contract that is still open
hedge - CORRECT ANSWER✔✔is the establishment of a futures position that is opposite to a
cash position
purpose is to establish a temporary substitute for a cash market transaction that will be made at
a future date
to shift his risk of loss on the cash commodity due to adverse price change
making a futures purchase or sale to serve as a temporary substitute for a cash market
transaction that he will make at a later date
Speculator - CORRECT ANSWER✔✔individual who buys a commodity if he anticipates a price
rise or sells a commodity if he anticipates the price decrease
buy and sell futures for the purpose of making a profit
long (buys futures) position when he anticipates that the price will rise
short position (sells futures) when he anticipates that the price will fall
, futures exchange - CORRECT ANSWER✔✔producer or user of the cash commodity will be able
to obtain credit from banks and other lenders at a more favorable rate if his position is hedged
CFTC Commodity Futures Trading Commission - CORRECT ANSWER✔✔responsible for
supervising trading
exchange - CORRECT ANSWER✔✔provide facilities for members to conduct trading in
commodity futures and to ensure that members conduct business in a manner that is just as
equitable
the grades that are believable, the delivery months, how and where delivery will be made and
the size of the contract.
establishes the amount of margin that a customer must deposit initially and that he must
maintain in his account subsequently
establishes rules for the prevention of price manipulation
designates which warehouse are "regulatory for delivery," which means those that may be used
as depositories from which deliveries are made
for inspection of the cash commodity by inspectors who are licensed by the exchange
Arbitration exchange Committee - CORRECT ANSWER✔✔settles disputes arising between
members, member firms, and the public
Business conduct exchange committee - CORRECT ANSWER✔✔investigates complaints against
members, acts to prevent price manipulation, and supervises the conduct of members,
members firms and their employees to ensure compliance with the appropriate rules
