All securities representatives and brokers must pass exams and be registered before they can sell products or place trades for their customers. Different markets require different exams: for example, a stock broker must pass the Series 7 exam. The Series 3 exam is for futures and commodities brokers.

Identification

Individuals who want to work for a brokerage firm and sell commodities or futures contracts must pass the Series 3 exam, officially known as the National Commodity Futures Exam.

Registration

Commodities and futures brokers must be registered with the National Futures Association. One registration requirement is a passing score on the Series 3 exam.

Knowledge

To pass the Series 3 exam a commodities broker must have extensive knowledge about futures trading theory, futures terminology, futures features such as margin requirements, settlement, delivery and exercise. The test also covers the use of futures and futures options for hedging, speculating and spreading. Finally, the test covers all applicable regulations.

Function

A Series 3 commodities broker participates in commodities trading for his customers' accounts. The work is a combination of sales skills to acquire new accounts and account management to offer trading advice and place trades for the broker's customers.

Income Potential

The primary source of income for a commodities broker is commissions earned on trades placed for customers. According to the U.S. Bureau of Labor Statistics, the median income for a person employed in security and commodity brokerage was $85,580 as of May 2008. The middle 50 percent all of financial, commodity and securities sales agents earned between $40,480 and $122,270.

Source:

NFA: Series 3 subject areas

NFA: Registration Information

BLS: Securities, Commodities and Financial Services Sales Agents