To be able to undertake futures transactions,an investor must establish an account.To establish that account and to trade certain obligations are needed first,they are:

A) establish an account, undergo an interview, maintain a margin facility
B) form a relationship with an exchange broker
C) be fully aware of the unique characteristics of futures markets
D) all of the above

Question

To be able to undertake futures transactions,an investor must establish an account.To establish that account and to trade certain obligations are needed first,they are:

A) establish an account, undergo an interview, maintain a margin facility
B) form a relationship with an exchange broker
C) be fully aware of the unique characteristics of futures markets
D) all of the above

Quizplus · Accepted Answer

Firstly investors must establish an account and a relationship with an exchange-recognised broker (i.e.exchange member).Normally this involves completing various forms that formalise both broker and client's rights and duties.Clients may be required by brokers to undergo an interview to ensure that the client is fully aware of the market and its unique characteristics.Once this relationship is established the investor can then instruct the broker to trade on their behalf.The futures exchange will require the investor to establish an initial margin depending on the futures contracts.

To Be Able to Undertake Futures Transactions,an Investor Must Establish