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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
selected terms: 173 page 1 of 9

1. Actuals See also: Cash Commodity
2. Aggregation The policy under which all futures positions owned or controlled by one trader or a group of traders are combined to determine reportable positions and speculative limits. =National More…
3. Arbitrage The simultaneous purchase and sale of similar commodities in different markets to take advantage of a price discrepancy. =National Futures Association
4. Arbitration The process of settling disputes between parties by a person or persons chosen or agreed to by them. NFA’s arbitration program provides a forum for resolving futures-related More…
5. Ask The price at which a currency pair or security is offered for sale; the quoted price at which an investor can buy a currency pair. This is also known as the 'offer', 'ask More…
6. Associated Person (AP) An individual who solicits orders, customers or customer funds on behalf of a Futures Commission Merchant, an Introducing Broker, a Commodity Trading Advisor or a Commodity Pool Operator More…
7. At-the-Money Option An option whose strike price is equal—or approximately equal—to the current market price of the underlying futures contract. =National Futures Association
8. Backwardation A futures market in which the relationship between two delivery months of the same commodity is abnormal. The opposite of Contango. See also: Inverted Market =National Futures More…
9. Basis The difference between the current cash price of a commodity and the futures price of the same commodity. =National Futures Association
10. Bear Market (Bear/Bearish) A market in which prices are declining. A market participant who believes prices will move lower is called a “bear.”A news item is considered bearish if it is expected to result in lower More…
11. Bid The price at which an investor can place an order to buy a currency pair; the quoted price where an nvestor can sell a currency pair. This is also known as the 'bid price' and More…
12. Board of Trade See also: Contract Market =National Futures Association
13. Bucketing Directly or indirectly taking the opposite side of a customer’s order into the broker’s own account or into an account in which the broker has an interest, without open and competitive More…
14. Bull Market (Bull/Bullish) A market in which prices are rising. A market participant who believes prices will move higher is alled “bull.” A news item is considered bullish if it is expected to result in higher More…
15. Call Option An option which gives the buyer the right, but not the obligation, to purchase (“go long”) the underlying futures contract at the strike price on or before the expiration date. More…
16. Carrying Broker A member of a futures exchange, usually a clearinghouse member, through which another firm, broker or customer chooses to clear all or some trades. =National Futures Association
17. Carrying Charge The cost of storing a physical commodity, such as grain or metals, over a period of time. The carrying charge includes insurance, storage and interest on the invested funds as well as other More…
18. Cash Commodity The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also referred to as Actuals. =National Futures Association
19. Cash Market A place where people buy and sell the actual commodities (i.e., grain elevator, bank, etc.). See also: Forward (Cash) Contract and Spot =National Futures Association
20. Cash Settlement A method of settling certain futures or options contracts whereby the market participants settle in cash (rather than delivery of the commodity). =National Futures Association

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