Series 3 Exam Prep

Series 3 Exam Prep Products

Sitting for the Series 3 Exam is a substantial undertaking. It takes many hours of dedicated study time and a commitment to mastering the material. This is why you need the best possible materials to help you prepare.

Our materials have proven to be key in helping thousands of students pass the series 3 exam. And we have the highest success rate. In fact, candidates who study using our Series 3 Exam prep materials report the highest pass rates in the industry. Plus, as the authors of these materials you are buying straight from the source. No middle man means you have direct access during your exam prep and can reach out with questions or even just for guidance. Need to talk? Then contact us today. We are happy to help however we can.

Series 3 Exam Textbook

Our Series 3 Exam textbook sets the standard for exam prep. This key study guide is literally packed with every detail and fact that you need to successfully pass your Series 3 exam. Much more than just another book, we have designed this text to be your go-to tool during your preparation and study time. We want this textbook to be your guide as you learn the data and master the material it includes

As with all of our Series 3 materials, this textbook was written in partnership with John Wiley & Sons, the top name in financial instruction products. This guarantees the quality of the product and shows the level of commitment we give to our exam preparation materials.

Series 3 Exam Software

For many individuals having the opportunity to practice the exam and study the type of questions they will be asked is an invaluable study tool. We understand this fact and have created the Series 3 Exam Software to fill this need

This software is designed to mimic the testing environment in that no two practice tests will be the same. Instead of offering you the same format over and over again, questions are selected at random from a large bank of test proven questions . This helps you to effectively prepare for your Series 3 exam as you never know what question will be offered next. Plus, you have the ability to direct the testing to focus on specific testing areas. By defining the types of questions you are asked you can increase your mastery of specific topics and ensure that your efforts have covered every possible aspect of the exam

With the Series 3 Exam Software you have the ability to prepare for your exam anytime day or night. This package gives you full access to the software for a full 6 months and is available on all major browsers and mobile devices. You may select the topics, how and when answers are revealed to you and even set the software up so you may click a button while looking at the question to review the explanation before you move on. Randomized simulated finals are just a click or tap away and are created automatically for you by the software program

Combination Packages

Many candidates find that effectively preparing for their Series 3 Exam requires a mix of our available preparation options. To fill this need we have created a series of pre-designed packages that represent our most frequent combinations. This allows you to get everything you need to prepare for your exam in one spot and at a significantly reduced price

Series 3 Textbook & Exam Prep Software

Easily our most popular Series 3 Exam preparation package, this combo offers you both the Series 3 Textbook and Exam prep software at a greatly reduced price. Plus, order our package deal and receive free shipping on your purchase!

The Series 3 Textbook and Exam Prep Software Package Includes:

• Series 3 Textbook
• Series 3 Practice Exam Software
• Free Shipping

Series 3 – Exam Information

Passing the Series 3 Exam opens up a variety of career options. First, successful completion of this exam allows the individual to register as an associated person with an NFA member firm. Also, this exam allows the individual to trade in futures contracts as well as options on futures contracts.

Successful completion of the Series 3 Exam allows for application for NFA Membership in the following areas:

• CTA
• IB
• FCM
• CPO
• RFED
• Sole Proprietor

Enrollment Fee:

Registering for the Series 3 Exam costs $110. Please keep in mind this price represents the enrollment fee only and it is highly likely that other fees will apply throughout the testing process.

Prerequisites:

At this time there are no prerequisites for sitting for the Series 3 Exam.

Exam Format:

The Series 3 Exam is comprised of both True/False and Multiple Choice questions. There are a total of 120 questions on the exam.

The questions are formatted as follows:

Part One

Future Trading Theory and Basic Functions Terminology

• 19 Questions

Futures Margins, Options Premiums, Price Limits, Settlements, Delivery, Exercise and Assignment

• 15 Questions

Type of Orders, Customer Accounts, Price Analysis

• 11 Questions

Basic Hedging and Hedging Calculations

• 9 Questions

Financial Hedging

• 10 Questions

Spreading

• 3 Questions

Speculation in Futures

• 3 Questions

Part Two

CFTC/NFA Rules and Regulations

• 35 Questions

How to Pass the Series 3 Exam and become an Associated Person

What is the best way to prepare for the Series 3 exam?

This is easily one of the top questions we get asked here at the Securities Institute. Yet the answer isn’t as simple as you might think. First, everyone learns differently and we have long discovered that there simply isn’t an effective one size fits all approach when it comes to effective preparation for the Series 3 Exam. Every student is different and has to find the right mix of materials to meet their needs. However there are a few steps everyone can take to improve their odds and ensure they are doing everything they can to prepare for their exam.

First, always start with the textbook. Our Series 3 textbook is quite literally the foundation of our learning system. This book has everything you need to successfully pass the exam all laid out in a comprehensive, easy to follow format. Because of this we recommend that every client read the book completely and take notes of key points. This will ensure you know more than the basics, it will ensure you know the facts.

From there move to the practice tests. Take as many as you can and keep track of your results. The more you practice the more prepared you will be come test day and the higher your chances of successfully sitting for the Series 3 Exam.

Passing the Series 3 Exam

Have you ever run into someone who claims that they “just test well”? These are the people that never seem to crack a book yet somehow end up passing their tests with flying colors. It’s frustrating. But here’s the thing about those people….they aren’t doing anything you can’t! They simply use a set of logic based skills to help themselves approach an exam with logic rather than chance.

The best part?

These are skills you can replicate. More so, these are skills I can teach you. Take a few minutes to read through these tips and then practice their application. Doing so will not only help you improve you test scores, but also lower your testing anxiety and help make the entire exam process less intimidating.

So the idea here is to apply logic to the testing process. See, everyone knows what to do when they know the answer. They fill in the correct bubble and move on. But what happen when you get to that one question where you read through the answers and have no idea where to start? Well, that is where you use this system!

The first step is easy, I want you to slow down and read the whole question each and every time. Here’s the thing. When people read, they skim. They skip over the words looking for those key terms that jump out and tell them what the question is asking. Most of the time this approach works fairly well. The problem is that the exam environment isn’t your typical reading assignment and it is a situation where every word counts. So we need to make sure we are reading them all. Especially in the Series 3 Exam. Taking your time and reading the full question can help you ensure you are answering what is being asked and can be the difference between passing and failing the exam.

Next, instead of looking for the right answer, I want you to read through the choices and find those options you know are wrong. Yep, I want you to find the wrong answers and eliminate them. By applying process of elimination you can narrow your choices and improve your statistical odds of answering the question correctly.

Now, let’s look at a few common “answers.” As you read through your multiple choice options you will see three phrases pop up again and again.

• All of the above
• None of the above
• Not enough information to determine

Guess what? Seeing these possible answers is a very good thing because it gives you your next step. If you see one of these choices, here is what I want you to do.

All of the Above

• If, after using process of elimination, you see this choice, pick it! This is one of the best tips I have in terms of using logic against the Series 3 Exam. Statistics have shown this to be the right choice.

None of the Above

• Mark it off! If this choice is left after process of elimination then mark it off your list. The writers of the Series 3 prefer to include the right answer and this is not likely to be the correct choice.

Not Enough Information

• Here’s the thing, this is never going to be the right choice. It’s almost a freebie. The writers will always give you enough info and this is never the option to choose.

Now, if you have made it this far in your exam then you have likely come across more than one question where you have used this system. The temptation will be to go back and change your answers. Resist temptation! Changing your answers removes logic from the equation and leaves your score up to chance. So fight the urge and go with logic. It will work out better in the end!

Let’s take a moment to talk about test day. When you sit down for the exam the odds are good that you will know the answer to most of the questions. This is a good thing. However, at some point you will find a question where you just aren’t sure. That is where you use this system, just not right away.

I don’t want you to get bogged down trying to work through the answers you aren’t sure of right in the middle of your test. Instead, we are going to mark those questions as “record and review.” This will move them to the end of the test and give you a second chance to answer. So if you don’t know the answer, select any choice and then mark it for review. Answer everything you know and then work through the rest at the end. Don’t worry, you’ll still have plenty of time!

Sitting for the Series 3 Exam is stressful even for the most seasoned tester. But you can make it easier if you just follow this process and apply a logical system. This will increase you odds of selecting the correct answer and improve your scores.

Passing the Series 3 Exam licenses an individual to supervise a member firm’s option business.

Exam Details:

• 120 multiple choice and true/false questions.
• Time limit of 2 hours and 30 minutes.
• Passing score is 70% or greater.

Taking the Series 3 Exam

The Series 3 Exam is delivered via the PROCTOR system. This easy to use computer based testing system is very user friendly and is often compared to a standard ATM.

Each test is comprised of 120 random questions pulled from an extensive test bank. This ensures that each exam is completely unique and that no two individuals will sit for exactly the same exam.

The questions are formatted as follows:

Part One

Future Trading Theory and Basic Functions Terminology

• 19 Questions

Margins, Options Premiums, Price Limits, Settlements, Delivery, Exercise and Assignment

• 15 Questions

Type of Orders, Customer Accounts, Price Analysis

• 11 Questions

Basic Hedging and Hedging Calculations

• 9 Questions

Financial Hedging

• 10 Questions

Spreading

• 3 Questions

Speculation in Futures

• 3 Questions

Part Two

CFTC/NFA Rules and Regulations

• 35 Questions

How to Prepare for the Series 3 Exam

Preparing for the Series 3 Exam takes both dedication and planning. Successful candidates realize they will need to spend a significant amount of time preparing for the exam and also take as many practice exams as the possibly can.

How much time? Well we recommend you spend at least 60 to 70 hours preparing. This should offer a good foundation and help you as you move towards mastering the material.

Once you have finished preparing try to schedule your exam as soon as possible. We recommend waiting no longer than a week to improve your chances of successfully passing.

What type of business may be conducted by a Series 3 Registered Person?

Passing the Series 3 Exam opens up a variety of career options. First, successful completion of this exam allows the individual to register as an associated person with an NFA member firm. Also, this exam allows the individual to trade in futures contracts as well as options on futures contracts.

Successful completion of the Series 3 Exam allows for application for NFA Membership in the following areas:

• CTA
• IB
• FCM
• CPO
• RFED
• Sole Proprietor

What score is needed to pass the Series 3 exam?

Passing the Series 3 Exam requires a minimum score of 70% on each of the two sections.

Are there any prerequisites for the Series 3 exam?

At this point there are no prerequisites for the Series 3 Exam.

How do I schedule my Series 3 exam?

When you are ready to sit for the Series 3 Exam contact your firm’s principal to schedule a time. Testing centers are available in most geographies and the test is offered any time the center is open.

Please note: Candidates for the Series 3 Exam are NOT required to be sponsored by a FINRA member firm.

What must I bring to the exam center?

Make sure you bring a current photo ID to the testing center. Everything else, including scratch paper, calculators and writing utensils, will be provided.

How long will it take to get the results of my Series 3 exam?

This is one of the best parts of the Series 3 Exam. You receive your score as soon as you finish the test. Then, the testing center will provide you with a printed copy for your records. Zero waiting!

Series 3 test-taking tips!

• Always read the entire question
• Look for important terms and key phrases
• Utilize process of elimination
• Don’t change your answers!

IMPORTANT SERIES 3 EXAM NOTES!

One thing to remember about the Series 3 Exam is that it is one of the only exams that contains both multiple choice and true/false questions. Also, candidates must score a minimum of 70% on EACH SECTION to pass the exam rather than an overall score of 70%.

Series 3 Tutoring

Many people find that despite their best efforts they still need some direct help when it comes to passing the Series 3 Exam. Whether it comes down to a lack of time or simply the amount of information that needs to be covered, working with a skilled tutor can make all the difference when it comes to passing this highly difficult exam.

Here are a few situations where working with a tutor may be helpful:

• You are an experienced professional who cannot take time from your career to prepare for the exam.
• You have taken the exam and did not pass.
• You have been diligent in your preparation yet are still uncomfortable with the material.

It Makes a Difference

Working with a professional tutor can be the difference between passing and failing your Series 3 Exam. Our tutors are industry experts who have mastered this material and are effective at training others to do the same. Their goal is to walk with you through the preparation process as they create a tailored plan designed to meet your unique needs.

Here are a few examples of how tutoring has helped our clients pass their Series 3 Exam.

Series 3 Case Study #1

A client came to us after spending a full four weeks studying and learning the material. She had been highly diligent in her preparation but was still struggling with several key concepts. In this case she was having trouble understanding pricing and quantity contract specifications. An industry veteran, she was highly experienced in commodities but was completely out of her comfort zone when it came to futures.

After several practice tests she realized she wasn’t able to pull her score up from the mid 60’s no matter what she did. She knew she wasn’t ready to take the exam, but her career couldn’t wait. It was time to call in some expert help.

Solution

With just under 2 weeks until her scheduled testing date, our tutor knew that time was of the essence. After looking closely at her practice tests the problem become readily apparent. The client was missing option questions across the board. It seemed that the contract specifics, like multipliers, along with contract settlements and number of units were all jumbled together in her mind and she simply wasn’t able to make sense of what she needed to do.

Armed with this key information the tutor developed a targeted plan. They would meet daily for one hour to work on this specific material. After each session the client would sit for a new practice test and share her results with her tutor. The sessions lasted a total of 4 days and in that time she was able to increase her average score by over 12 points. A week later she breezed through her Series 3 Exam, passing with flying colors!

Series 3 Case Study #2

A new client approached us with a very specific problem. After newly entering the financial industry they quickly sat for, and passed, both the Series 7 and the Series 66 Exams with ease. Now they were attempting the Series 3 Exam and were finding it to be a completely different story.

Well versed in self-study methods, this client had dedicated himself to his preparation and was frustrated to be coming up short. Even after all of his hard work he failed the Series 3 Exam by just 5 points.

Unhappy with these results he reached out for help in preparing for his re-test. He knew he was struggling with the concepts of open trade equity and margins. Further he couldn’t see how margins related to a margin account established for equities. So, rather than struggle through on his own for a second time, he opted to employ one of our professional tutors.

Solution

Our tutor did an initial evaluation and asked the client to log onto our site for a practice exam. The results of this exam highlighted areas of weakness and helped the tutor create an effective game plan. The first step was to utilize the mobile textbook during the client’s long daily commute. These reading assignments complemented the tutoring sessions and ensured the client had a firm grasp on the foundational concepts.

The two decided on 4, 2-hour sessions to help cement the material. They focused on the topics of margin, open trade equity and variation margin as well as reviewing the commodities business as a whole and how clearinghouses work. Very targeted. Very effective.

The plan worked. Four days after his last tutoring session the client sat for the exam a second time and passed with a score of 82%.

Series 3 Case Study #3

An industry veteran came to us after he decided to expand his service list. His clients were becoming more high profile and he wanted to remain competitive in terms of what he could offer them. However, he knew right from the beginning that he did not have the time to embark on a long term self-study approach. He needed to master the material as soon as possible and without interrupting the daily flow of his professional life. The candidate was dedicated, but time was limited.

Solution

After overnighting the necessary materials our tutor scheduled one-hour daily sessions for the next two weeks. Each night the client would take a practice test and each day the tutor would use those results to help them plan the next session.

Then, right before the exam, they stepped things up. The tutor actually met with the client in person from 8am to 10am for the week before their exam. This time was highly structured and extremely effective. Our client was able to sit for the exam the following Monday and pass with a score of 85%.

Here at the Securities Institute we understand that effective tutoring is based on individual need. That is why we treat each case as the individual it is. We work with our clients to create the right plan for their needs and to help them achieve the success they are looking for.

If you have any questions on our tutoring program, please don’t hesitate to ask. We are happy to help however we can!

Series 3 License Frequently asked questions / FAQs

1) Why should I get a series 3 license ?

There are a variety of reason why candidates seek to become a series 3 licensed. Some are entering the futures industry and are just starting out in a new career. Others are coming from established financial services firms and are seeking to expand their product offerings to their clients. A series 3 license will also be required if a candidate wants to recommend certain managed account platforms to clients. Many managed accounts use futures to gain exposure to the markets and as such agents will need to obtain a series 3 license. If you are joining an NFA member organization your employer as a condition of employment or promotion, will require you to obtain the series 3 license to function in your new job. Your firm’s compliance department, home office or HR will notify individuals directly or through your manager as to the time frame for taking the exam

2) What will I be able to do with a series 3 license?

A series 3 license will allow you to register as an associated person of an NFA member firm. As a series 3 licensed professional you will be able to transact business in a large number of futures contracts as well as in options on futures contracts. After passing the series 3 exam you may trade commodity futures contracts on commodities such as oil and gas, agricultural products such as wheat and corn, financial futures on the S & P 500, currencies and Treasury securities. These are just some of the contracts you will be licensed to trade and recommend to clients. Being licensed as an associate person of an NFA member firm will allow you to earn commissions for executing orders for clients in a wide variety of commodity contracts.

3) How hard is it to get a series 3 license ?

The series 3 exam is a challenging exam. The information tested covers complex topics relating to market and product knowledge. In order to pass the exam you must demonstrate that you have a comprehensive understanding of how futures markets work and the relationships between the contracts and the underlying physical commodities. Mastering this information will go a long way to help you pass the series 3 exam. However, this alone will not be enough as the series 3 also requires you to have detailed knowledge relating to industry rules and regulations. You will need to have a good grasp of all of the regulatory matters, down to the smallest detail. The series 3 exam is one of the only exams that requires you to pass both portions of the exam. Acing one section alone will not get you passed the exam if you bomb the other section. You must pass both the general knowledge and regulatory sections. Passing the series 3 exam is a significant challenge and obtaining a series 3 license takes focus and dedication to the exam preparation process. Students should not take this test lightly. You must thoroughly prepare to take the exam and should make it a top priority. The series 3 exam covers areas many people are never exposed to in their careers. Many people who take the series 3 exam are not actively involved in the commodities markets. As such, many have never had any experience dealing with the mechanics of futures and complex spreads . These two areas are heavily tested on the exam. You should prepare for the exam by reading a textbook completely with a highlighter. You must read the book, there are no shortcuts and students need to understand this. You must clear your schedule, shut off your phone and focus. In addition to obtaining the knowledge required by the exam, you must master the application of the information by taking as many practice questions as you can. We recommend at least 60 – 70 hours of preparation to ensure you pass your series 3 exam and become licensed as an associated person of an NFA member.

4) Is my series 3 license transferable ?

The answer is, that while it feels like your series 3 license is indeed transferable, in actuality it is not. If you want to change firms, your series 3 registration / license along with all of your other registrations must be terminated by your current FINRA and or NFA member firm. Your former employer / the firm that you are leaving will fill out and submit a Form U5 to FINRA, if you are working for a FINRA member firm. This will terminate your employment and your registration with that firm. When you arrive at your new firm you must fill out and submit a new Form U4. This will begin your registration with your new firm and your series 3 license will become active at your new firm upon receiving notice from FINRA and the states where you conduct business. If you are associated exclusively with an NFA or CFTC member firm, your firm will initiate and terminate individual registrations through the online registration system or ORS

5) How much does it cost to get a series 3 license ?

Obtaining a series 3 license will require many people to make an investment in their professional development. Your series 3 license will qualify you as an associated person of an NFA member firm and allow you to transact business in commodities futures contracts and options. Many people who obtain a series 3 license enjoy lucrative and successful careers in the futures and financial services industry. The good news is, for those who absorb the costs, they are relatively low when compared to other types of training, certification and college expenses. Some employers pick up or reimburse the costs of training and the testing and registration fees. Even for these people many obtain additional resources such as additional test questions, books or videos to ensure they pass their exam and become licensed. For those who have to pay all of the expenses out of pocket, it usually only costs a few hundred dollars for the testing fees and quality training materials. . You will find that obtaining a series 3 license opens many doors for you throughout your career.

6) What are the continuing education requirements once I have a series 3 license ?

Once you have obtained your series 3 license you will be required to meet certain continuing educational requirements. Your firm will be required to provide you with periodic ethics training courses. NFA Rule 2-9 places a significant focus on the firm’s ongoing requirement to ensure that its employees receive continued and sufficient training covering ethical practices in the futures industry. Your employer must have written procedures detailing how it will meet its ethics training requirement. Your firm may have you attend a seminar, webinar or take an online course to satisfy the firm’s ethics training requirement

7) Will I need to obtain any other license to be fully registered ?

Your series 3 license is most likely the only license you will need if you plan on conducting business exclusively in futures. If you wish to transact business in securities you will be required to obtain a series 7 and 63 or series 7 and 66 if you have not already done so. We hope that this answers many of your frequently asked questions about the series 3 license. If you have any additional questions please call or email us.

Good luck on your exam.

The Securities Institute of America, Inc