Futures Managed Funds Exam (Series 31) Study Guide
- Questions
- 45
- Time limit
- 1h
- Passing score
- 70%
- Exam fee
- $90
- Governing body
- NFA
What the Series 31 Is
The Futures Managed Funds Exam (Series 31) is a FINRA qualification exam. Passing it qualifies an individual to supervise or engage in the sale of managed futures funds and commodity pool interests, typically alongside registration with the National Futures Association (NFA).
Format at a Glance
- Questions: 45 scored questions.
- Time limit: 60 minutes (one hour).
- Passing score: 70%.
- Fee: $90.
Because you have 45 questions to answer in 60 minutes, you have roughly 80 seconds per question on average — a comfortable pace that leaves room to flag and revisit tougher items. To pass at 70%, you must answer at least 32 of the 45 scored questions correctly, meaning you can miss no more than 13.
The Math of Passing
The passing threshold is 70% of 45 scored questions. Seventy percent of 45 is 31.5, so you must clear 32 correct answers — there is no partial credit, and rounding works against you at the boundary.
Pacing Yourself
With 60 minutes for 45 questions, budgeting about 60–80 seconds per question keeps you on track while reserving a few minutes at the end for review. Since there is no penalty framework described for the passing threshold beyond percentage correct, never leave a question blank — an educated guess can only help your 70% target.
Cost of Retaking
Each attempt costs $90, so the financial incentive to pass on the first try is real. Treat practice exams as the primary tool for confirming you are consistently scoring above 70% before you register.
Build a Study Plan Around the Format
Because the exam is short — 45 questions in 60 minutes — accuracy and recall speed matter more than endurance. Structure your studying around timed practice sets of 45 questions so your pacing and your knowledge are tested together.
Set Your Passing Benchmark Above the Line
The official passing score is 70%. Aim to score consistently in the 80%+ range on practice exams so that exam-day nerves or a few unfamiliar items still leave you safely above 70%.
Budget for the Attempt
The registration fee is $90. Confirm you are hitting your practice benchmarks before scheduling, since every attempt carries that same $90 cost.
Exam-Day Checklist
- Plan for a 60-minute testing session.
- Know that you need 32 of 45 correct to reach the 70% passing mark.
- Arrive prepared to answer every question — with only 45 items, each one is worth roughly 2.2% of your score.
Series 31 flashcards
34 cards on the highest-yield terms and rules. Grading uses spaced repetition and saves in this browser.
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How many scored questions are on the Series 31 (Futures Managed Funds) exam?
45 scored questions.
How much time are you given to complete the Series 31 exam?
60 minutes (one hour).
What is the passing score for the Series 31 exam?
70%.
What is the registration fee for the Series 31 exam?
$90.
On average, how many minutes do you have per question on the Series 31?
About 1.3 minutes per question — roughly 80 seconds each.
How many questions can you miss on the Series 31 and still pass?
With a 70% passing score on 45 questions, you must answer at least 32 correctly, so you can miss up to 13.
Roughly how many questions must you answer correctly to pass the Series 31?
At least 32 of the 45 scored questions (70%).
How is the Series 31 passing threshold expressed — as a raw count or a percentage?
As a percentage: 70%.
If you budget your time evenly, how many questions should you aim to finish every 10 minutes on the Series 31?
About 7-8 questions per 10 minutes to finish 45 in 60 minutes.
What total exam length (in questions) should you prepare for on the Series 31?
45 scored questions — plan your review around that count.
How long is the Series 31 exam session, stated in hours?
One hour.
Is a score of 68% a passing result on the Series 31?
No — the passing score is 70%, so 68% fails.
What is the combined cost and passing bar you should know before scheduling the Series 31?
A $90 fee and a 70% passing score.
How many correct answers per minute, on average, must you sustain to complete the Series 31 on time?
About 0.75 questions per minute (45 questions ÷ 60 minutes).
Quick-recall summary: what are the four key logistics of the Series 31 exam?
45 scored questions, 60 minutes, 70% to pass, and a $90 fee.
What is a futures contract and how does it differ from a forward contract?
A futures contract is a standardized agreement to buy or sell an asset at a fixed price on a future date, traded on organized exchanges with daily settlement (mark-to-market). A forward contract is customized, traded over-the-counter, and settled only at maturity.
What are the key roles of a commodity exchange in futures markets?
Exchanges provide standardized contracts, set margin requirements, ensure price transparency, facilitate trading through clearinghouses, and establish and enforce trading rules and position limits.
What is the clearinghouse and why is it critical in futures trading?
The clearinghouse is the counterparty to every trade, ensuring contract performance. It eliminates counterparty risk, manages daily settlement of gains and losses (mark-to-market), and maintains margin requirements to protect the integrity of the market.
How do initial margin and maintenance margin function in futures accounts?
Initial margin is the minimum deposit required to open a position; maintenance margin is the minimum balance required to keep the position open. When equity falls below maintenance, a margin call is issued to restore the account to initial margin.
What is mark-to-market accounting and how does it affect a trader's cash position?
Mark-to-market is daily settlement where contract values are adjusted to current market prices. Gains and losses are immediately realized in cash — a trader's account is credited or debited daily based on price movements, not just at contract expiration.
What is a managed fund in the context of commodity and futures trading?
A managed fund is a professionally managed investment vehicle that pools capital from multiple investors and trades commodity futures, options, and related derivatives to generate returns, usually with a stated strategy and risk profile.
What does it mean for a managed fund to be registered with the CFTC?
Registration indicates the fund is subject to CFTC oversight, must meet disclosure, reporting, and operational standards, and must file registration statements and periodic reports to protect investor interests.
How do leverage and margin in a managed fund amplify both gains and losses?
Leverage allows a fund to control a large notional position with a smaller capital base. While potential profits increase, losses can exceed the original investment, and margin calls or forced liquidations may occur if positions move adversely.
What is the role of a pool operator (CPO) in managing a commodity pool?
A CPO oversees a commodity pool's operations, develops trading strategy, manages investor relationships, handles reporting and compliance, and is responsible for following CFTC and NFA rules for disclosure and operational integrity.
What is a commodity trading advisor (CTA) and how does it differ from a pool operator?
A CTA provides trading advice and account management services to clients. Unlike a CPO managing pooled funds, a CTA may manage individual accounts. Both are CFTC-regulated, but CTAs focus on advisory and discretionary trading services.
What must be disclosed to prospective investors in a commodity pool offering document?
Key disclosures include trading strategy, risk factors, fees and expenses, past performance (if any), operator background, conflicts of interest, margin and leverage policies, and redemption or withdrawal terms.
What is basis in futures markets and why is it important for hedging?
Basis is the difference between the spot (current) price of an asset and the futures price. Basis risk — the risk that basis changes unexpectedly — is a key consideration when using futures to hedge physical commodity positions.
How does a producer use futures contracts to hedge price risk?
A producer locks in a sale price by selling futures contracts equal to the expected output. If prices fall, gains on the futures offset lower spot prices; if prices rise, losses on futures are offset by higher revenues from selling the physical commodity.
What is the difference between a long hedge and a short hedge?
A long hedge (buying futures) protects against rising prices and is used by buyers or processors anticipating a future purchase. A short hedge (selling futures) protects against falling prices and is used by sellers or producers with inventory or future output.
What are position limits in futures markets and what purpose do they serve?
Position limits cap the maximum number of contracts a single trader or fund may hold in a given commodity to prevent market manipulation, ensure fair pricing, and reduce systemic risk from excessive concentration.
What is the significance of open interest in futures markets?
Open interest is the total number of outstanding contracts (long and short positions). High open interest indicates liquidity and active participation; low open interest may signal low liquidity or declining trader interest in that contract.
How do managed funds report performance to investors and regulators?
Funds provide periodic statements showing gains and losses, fees charged, and account values. Regulatory filings (CFTC Form 3-X) include detailed performance, trading activity, and risk metrics; funds must be truthful and avoid performance misrepresentation.
What restrictions apply to commodity pool redemptions and withdrawals?
Redemption terms are set in the offering document and typically limited to specified periods (monthly, quarterly). The pool operator may suspend redemptions if deemed necessary to protect remaining investors or comply with regulations during market stress.
What is a lock-limit move and how does it affect trading in futures contracts?
A lock-limit occurs when a futures contract's price moves by the daily limit amount (set by the exchange) and no trades occur outside that range. This halts trading and can trap positions; traders cannot exit or enter at any price until the market reopens for normal trading.
Series 31 glossary
The Futures Managed Funds Exam (Series 31) is a FINRA-administered qualification exam that assesses a candidate's competency to solicit or supervise the solicitation of managed futures accounts and commodity pool participations. It consists of 45 scored questions administered over 60 minutes, requires a 70% passing score, and costs $90.
29 terms the Series 31 tests, defined in plain English.
- Accredited Investor
- An individual or entity meeting specific income or net-worth thresholds established by the SEC, allowing investment in private offerings exempt from certain registration requirements. Many commodity pools and managed futures offerings are restricted to accredited investors due to their complexity and risk.
- Basis Risk
- The risk that the price difference (basis) between a futures contract and the underlying cash commodity or related asset changes unexpectedly. Traders using futures to hedge or speculate on spot prices face basis risk when the hedge does not move in perfect correlation with the underlying exposure.
- Commodity Derivatives
- Financial instruments like futures and options contracts based on underlying commodity prices (oil, grains, metals, currencies). Series 31 registrants advise on or manage accounts trading these derivatives to achieve client objectives such as risk management or portfolio diversification.
- Commodity Futures Trading Commission (CFTC)
- The independent U.S. federal agency that regulates the futures, options, and swaps markets. It oversees registration requirements and enforces rules against fraud and manipulation in commodity trading.
- Commodity Pool
- A pooled investment vehicle that combines funds from multiple investors to trade commodity futures and options contracts. Investors share in the pool's gains and losses in proportion to their contributions.
- Commodity Pool Operator (CPO)
- An individual or firm that organizes and operates a commodity pool, solicits investor funds, and is generally required to register with the CFTC and be an NFA member. The CPO is responsible for the pool's overall management and disclosures.
- Commodity Trading Advisor (CTA)
- A person or firm that, for compensation, advises others on the value of or advisability of trading commodity futures, options, or certain other derivatives. CTAs typically must register with the CFTC and belong to the NFA.
- Counterparty Risk
- The risk that a trading counterparty (FCM, clearing firm, or other intermediary) becomes insolvent or fails to meet its obligations. Managed futures investors face counterparty risk when their funds are held by or traded through intermediaries, requiring careful monitoring of intermediary creditworthiness.
- Disclosure Document
- The document a CPO or CTA must provide to prospective participants before accepting funds, detailing trading strategy, fees, risks, conflicts of interest, and past performance. It is the primary investor-protection disclosure in managed futures.
- Diversification (Across Strategies)
- The practice of spreading investment across different trading strategies, timeframes, and commodity sectors to reduce the impact of any single strategy or market failure. Managed futures portfolios typically diversify across trend-following, mean-reversion, and other uncorrelated approaches.
- Futures Commission Merchant (FCM)
- A firm that solicits or accepts orders for futures or options contracts and holds customer funds or margin to support those trades. FCMs act as the intermediary between customers and the exchange clearinghouse.
- Hard Commodities
- Natural resources including metals (gold, silver, copper) and energy products (crude oil, natural gas) traded as futures contracts. These markets are driven by supply shocks, geopolitics, and global industrial demand, making them distinct from soft commodity trading.
- Hedging
- A risk-management strategy that uses futures or options positions to offset the price risk of an existing or anticipated cash-market position. It aims to reduce exposure to adverse price movements rather than to generate speculative profit.
- Leverage
- The use of borrowed capital or margin to amplify the potential returns (or losses) on an investment position. Futures markets allow substantial leverage because positions require only a small margin deposit, making leverage both a powerful profit tool and a significant risk factor that Series 31 candidates must understand.
- Managed Futures Account
- An investment account in which a professional manager trades futures and options on the client's behalf, typically pooled with other investors' capital. It is the core product that Series 31 registrants are authorized to solicit and service.
- Margin
- The good-faith deposit a customer must post to open and maintain a futures position, serving as performance collateral rather than a partial payment. It includes initial margin to enter a position and maintenance margin to keep it open.
- Mark-to-Market
- The daily cash settlement process in futures where gains and losses are calculated at the end of each trading day using the settlement price. Funds and trading accounts are credited or debited daily, affecting the investor's equity balance and margin requirements without waiting for position closure.
- Maximum Drawdown
- The largest peak-to-trough decline in an investment or trading account's value over a specified period. It measures downside risk and is a critical metric that Series 31 candidates present to prospective investors when documenting historical performance and risk characteristics.
- National Futures Association (NFA)
- The industry-wide, self-regulatory organization for the U.S. derivatives industry, overseeing registration and conduct of CPOs, CTAs, FCMs, and other futures professionals. Membership is mandatory for most firms dealing in futures.
- Passing Score
- The Series 31 exam is scored on 45 questions within a 60-minute time limit, and a candidate must correctly answer 70% to pass. The exam registration fee is $90.
- Performance Fee
- A fee structure in which the fund manager earns a percentage of the profits generated (e.g., 20% of gains), in addition to a base management fee. Series 31 registrants must disclose performance-fee arrangements in the offering document and explain how they align incentives between manager and investors.
- Rollovers (Futures Contracts)
- The process of closing an expiring futures contract and opening a new one with a later expiration date to maintain an ongoing position. Managed futures managers execute rollovers to avoid physical delivery and manage liquidity; rollovers can incur transaction costs and basis risk.
- Series 3 (National Commodity Futures Examination)
- The FINRA exam required for individuals seeking to trade futures and options contracts for customers or provide solicitation for commodity trading. Series 31 registrants may hold Series 3 credentials to offer a broader range of futures-related services beyond managed funds.
- Series 31 (Futures Managed Funds Examination)
- A FINRA qualification exam that assesses the competency of an entry-level associated person seeking to solicit funds for managed futures accounts or participate in managed commodity accounts. Passing it qualifies an individual to supervise or engage in limited futures activities without a full commodities license.
- Series 65 (Uniform Investment Adviser Law Examination)
- The exam an investment adviser representative or adviser must pass to provide general investment advice and manage clients' portfolios. While Series 31 focuses on managed futures and commodity pools, some registrants may also hold Series 65 to offer broader investment services.
- Soft Commodities
- Agricultural commodities such as grains, sugar, cocoa, cotton, and coffee traded on futures exchanges. They differ from hard commodities (metals and energy) in their production cycles, storage characteristics, and price drivers—factors Series 31 candidates should understand when evaluating fund strategies.
- Suitability
- The regulatory requirement that a registrant recommend or service an investment only if it is appropriate for the client's financial situation, investment objectives, risk tolerance, and time horizon. Series 31 registrants must ensure managed futures accounts are suitable before soliciting investor participation.
- Systematic Trading Strategy
- A mechanical, rule-based approach to making trading decisions—typically governed by quantitative models, technical indicators, or fundamental analysis frameworks rather than discretionary judgment. Many managed futures funds employ systematic strategies to reduce emotional decision-making and improve consistency.
- Verification and Compliance
- The ongoing process of monitoring managed futures accounts and fund performance against client agreements, regulatory rules, and documented strategies to ensure compliance with CFTC, NFA, and FINRA rules. Series 31 registrants must verify that trading activity aligns with disclosed objectives and limitations.
Frequently asked questions
How many questions are on the Series 31 exam and how long do I have?
The Series 31 (Futures Managed Funds Exam) has 45 scored questions, and you're given 60 minutes to complete it. That works out to roughly 80 seconds per question, so the pace is brisk but manageable if you know the material — you generally won't have time to agonize over each item, so aim to move steadily and flag tough questions for review at the end.
What score do I need to pass the Series 31?
You need to score 70% to pass the Series 31. With 45 scored questions, that means answering about 32 questions correctly (since 70% of 45 is 31.5, you'll need at least 32 right). There's no penalty for guessing on FINRA qualification exams, so answer every question even if you're unsure.
How much does the Series 31 exam cost?
The exam fee for the Series 31 is $90. This is the cost charged for the exam enrollment itself; if a sponsoring firm registers you, they may cover this fee on your behalf. Budget for it as a fixed cost of qualifying.
How should I pace myself during the 60-minute Series 31 exam?
With 45 questions in 60 minutes, you have about 80 seconds per question on average. A good strategy is to do a first pass answering everything you know quickly — many questions take far less than 80 seconds — which banks time for the harder items and a final review. Keep an eye on the clock roughly every 10–15 questions to make sure you're on track to reach a passing 70%.
Official sources
Primary documents used to verify the exam details shown on this page.
- Series 31 Exam OverviewNFAfinra.org
- Schedule an ExamFINRAfinra.org
- FINRA Qualification Exams Overview (SIE)FINRAfinra.org
- Associated Person (AP) RegistrationNational Futures Associationnfa.futures.org
- Proficiency RequirementsNational Futures Associationnfa.futures.org
- Series 31 – Futures Managed Funds ExamFINRAfinra.org
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