CPT Cheat Sheet 2026

The 30 highest-yield CPT facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. In a leveraged buyout (LBO) analysis, the primary driver of equity returns is typically: → Both debt paydown and potential multiple expansion
2. What is the relationship between cryptocurrency & digital assets and overall Certified Pro Trader professional competency? → It is an essential component that strengthens the overall competency framework
3. What is the relationship between tax implications & record keeping and overall Certified Pro Trader professional competency? → It is an essential component that strengthens the overall competency framework
4. A trading firm's algorithm generates 50,000 order messages per second but only executes 10 trades. Regulators might view this activity as: → Potential spoofing or quote stuffing requiring investigation
5. In technical analysis, a 'volume climax' at the end of a prolonged downtrend is significant because it may signal: → Exhaustion of selling pressure and a potential bottom reversal
6. Which document does FINRA require member firms to provide clients that explains best execution practices? → SEC Rule 606 Disclosure Report
7. Which of the following best describes the concept of 'economic moat' in fundamental analysis? → A sustainable competitive advantage that protects long-term profitability
8. A 'pennant' continuation pattern is most similar in structure to which other pattern? → Symmetrical triangle
9. Which of the following best describes the 'Dogs of the Dow' investment strategy? → Buying the 10 highest-dividend-yielding Dow stocks at the start of each year
10. A futures contract for crude oil is priced at $80/barrel with a contract size of 1,000 barrels. What is the notional value of one contract? → $80,000
11. Which Greek measures the sensitivity of an option's price to a 1% change in implied volatility? → Vega
12. What does 'correlation risk' refer to in portfolio management? → The risk that positions believed to be uncorrelated move together during stress events
13. Which measure captures the portion of portfolio risk that cannot be eliminated through diversification? → Systematic risk
14. What does 'position sizing' refer to? → Determining trade size relative to risk
15. What does 'geographic diversification' primarily protect against? → Country-specific economic downturns, political instability, and regulatory changes
16. Futures contracts traded on a regulated exchange are typically taxed under which IRS rule that applies a blended 60/40 long-term/short-term rate? → Section 1256 rule
17. What is drawdown in trading? → Decline from equity peak to trough
18. What does a 'volume profile' chart display that a standard volume histogram does NOT? → Volume distribution across different price levels rather than across time
19. What is the significance of a currency's 'reserve status'? → Other countries hold it in large quantities to settle international trade and debt
20. What is the holding-period threshold that distinguishes a short-term capital gain from a long-term capital gain in the US? → More than 12 months
21. What is a trend-following strategy? → Entering trades in the direction of the market trend
22. Which risk management approach adjusts position size based on recent market volatility, typically using Average True Range (ATR)? → Volatility-based position sizing
23. What is 'wash trading' in crypto markets and why is it problematic? → Simultaneously buying and selling an asset to artificially inflate reported trading volume
24. A grain elevator manager sells wheat futures to lock in a price for upcoming harvest. This is an example of: → Hedging
25. What is 'tactical asset allocation' in the context of portfolio diversification? → Short-term, deliberate deviations from a strategic allocation based on market outlook
26. In the Dow Theory, a 'secondary trend' (reaction) typically lasts: → Three weeks to three months
27. Which of the following best describes the concept of 'expectancy' in trading psychology? → The average amount you win or lose per dollar risked over many trades
28. Which IRS form is used by brokerage firms to report proceeds from sales of securities to both the trader and the IRS? → Form 1099-B
29. What does 'initial margin' represent in futures trading? → The good-faith deposit required to open a futures position
30. A trader following a trend-following system receives a valid entry signal but delays because 'the market looks extended.' Which bias is most likely responsible? → Recency bias causing fear of reversion