Which of the Following Statements Is True About Floor Traders

question 9

Multiple Choice

Which of the following statements is true about floor traders (or locals) in a futures exchange's trading floor?

• A) They stand on an exchange floor in trading pits to execute clients' trades.
• B) They often band together to form associations to better handle large and complex orders.
• C) They earn commissions for their service.
• D) They become counterparties to futures trades.
• E) They never have inventory risk.

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