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Futures Trading Terms
A B C D E F G H I L M N O P Q R S T U V W Y
PA PI PO PR PU PY
selected terms: 13 page 1 of 1

1. Par The face value of a security. =National Futures Association
2. Pit The area on the trading floor where trading in futures or options contracts is conducted by open outcry. =National Futures Association
3. Pool See Commodity Pool. =National Futures Association
4. Position A commitment, either long or short, in the market. =National Futures Association
5. Position Limit The maximum number of speculative futures contracts one can hold as determined by the CFTC and/or the exchange where the contract is traded. =National Futures Association
6. Position Trader A trader who either buys or sells contracts and holds them for an extended period of time, as distinguished from a day trader. =National Futures Association
7. Prearranged Trading Trading between brokers in accordance with an expressed or implied agreement or understanding. Prearranged trading is a violation of the Commodity Exchange Act. =National Futures More…
8. Premium Refers to (1) the amount a price would be increased to purchase a better quality commodity; (2) a futures delivery month selling at a higher price than another; (3) cash prices that are More…
9. Price Discovery The process of determining the price of a commodity by trading conducted in open outcry at an exchange. =National Futures Association
10. Price Limit The maximum advance or decline, from the previous day’s settlement price, permitted for a futures contract in one trading session. Also referred to as Maximum Price Fluctuation. More…
11. Purchase and Sale Statement (P&S) A statement sent by a Futures Commission Merchant to a customer when a futures or options position has been liquidated or offset. The statement shows the number of contracts bought or sold, More…
12. Put Option An option which gives the buyer the right, but not the obligation, to sell the underlying futures contract at a particular price (strike or exercise price) on or before a particular date. More…
13. Pyramiding The use of unrealized profits on existing futures positions as margin to increase the size of the position, normally in successively smaller increments. =National Futures Association

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