|
Hedge Exemption
An exemption from speculative position limits for bona fide hedgers and certain other persons who meet the requirements of exchange and CFTC rules.
Security
Generally, a transferable instrument representing an ownership interest in a corporation (equity security or stock) or the debt of a corporation, municipality, or sovereign. Other forms of debt such as mortgages can be converted into securities.
Backwardation
Market situation in which futures prices are progressively lower in the distant delivery months. For instance, if the gold quotation for January is $360.00 per ounce and that for June is $355.00 per ounce, the backwardation for five months against January is $5.00 per ounce. (Backwardation is the opposite of contango ). See Inverted Market.
Allowances
The discounts (premiums) allowed for grades or locations of a commodity lower (higher) than the par (or basis) grade or location specified in the futures contract. See Differentials.
Accommodation Trading
Non-competitive trading entered into by a trader, usually to assist another with illegal trades.
Buy (or Sell) On Opening
To buy (or sell) at the beginning of a trading session within the open price range.
Margin
The amount of money or collateral deposited by a customer with his broker, by a broker with a clearing member, or by a clearing member with a clearing organization. The margin is not partial payment on a purchase.
Equity
As used on a trading account statement, refers to the residual dollar value of a futures or option trading account, assuming it was liquidated at current prices.
Call
An option contract giving the buyer the right but not the obligation to purchase a commodity or other asset or to enter into a long futures position
Abandon
To elect not to exercise or offset a long option position
|
Did You Know?