Qn. 1 / 10

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What is the primary reason for charging margins in trading?

To generate revenue for brokerage firms

To cover administrative costs of trading

To manage and mitigate potential risks

To discourage excessive trading activity

Qn. 2 / 10

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Which system is responsible for evaluating margin requirements and approving trades?

Order Management System (OMS)

Risk Management System (RMS)

Trade Execution System (TES)

Central Depository System (CDS)

Qn. 3 / 10

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What key information is NOT typically provided to the RMS when placing a trade?

Contract type and quantity

Desired buy or sell price

Intended trade duration

Stop-loss order level

Qn. 4 / 10

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What is the risk associated with holding a futures position overnight?

Liquidity risk

Market impact risk

Overnight risk

Operational risk

Qn. 5 / 10

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How does providing more information about your risk appetite affect margin requirements?

It has no impact on margin requirements

It leads to higher margin requirements

It leads to lower margin requirements

It may lead to higher or lower margin requirements depending on the specific information provided

Qn. 6 / 10

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Which product type is suitable for holding a futures trade for multiple days?

NRML

MIS

CO

BO

Qn. 7 / 10

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What is a key characteristic of the MIS product type?

It allows holding positions overnight

It requires specifying a stop-loss order

It is specifically designed for intraday trading

It offers the lowest margin requirements among all product types

Qn. 8 / 10

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Which product type requires specifying both a stop-loss order and an intraday trading timeframe?

NRML

MIS

CO

BO

Qn. 9 / 10

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How does a Bracket Order (BO) differ from a Cover Order (CO)?

BO allows holding positions overnight, while CO does not

BO requires specifying a target price, while CO does not

BO has higher margin requirements than CO

BO is only available for options trading, while CO is available for futures trading

Qn. 10 / 10

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What is the purpose of a trailing stop-loss order?

To limit potential losses

To secure profits as the trade moves favorably

To enter a trade at a specific price point

To automatically exit a trade at the end of the trading day