init([{"id":1,"term":"Account Equity","definition":"

The net worth of a FUTURES account as determined by combining the ledger balance with any unrealized gain or loss in open positions as marked to the market.

","related_topics":[]},{"id":2,"term":"Account Executive","definition":"

The agent of a commission house who serves customers/traders by entering their commodity futures and options orders, reporting trade executions, advising on trading strategies, etc.

","related_topics":[]},{"id":3,"term":"Active Month","definition":"

Usually the most active contract month, often closest to delivery.

","related_topics":[]},{"id":4,"term":"Against Actuals","definition":"

A transaction generally used by two hedgers who want to exchange futures for cash positions. Also referred to as "Exchange for Physicals" (EFP) or "versus cash".

","related_topics":[]},{"id":5,"term":"All-Or-None (Aon) Order","definition":"

An order to be executed in designated contracts in a trading pit via open outcry only for its entire quantity at a single price, with a size at or above a predetermined threshold.

","related_topics":[]},{"id":6,"term":"American Gas Association (AGA)","definition":"

American Gas Association. Major natural gas industry trade association, based in Alexandria, Virginia. AGA conducts technical research and helps create standards for equipment and products involved in every facet of the natural gas industry. It also compiles statistics which are considered industry standards.

","related_topics":[]},{"id":7,"term":"American Petroleum Institute (API)","definition":"

The primary U.S. oil industry trade association, based in Washington, D.C. API conducts research and sets technical standards for industry equipment and products from wellhead to retail outlet. It also compiles statistics which are regarded as industry benchmarks.

","related_topics":[]},{"id":8,"term":"American-Style Option","definition":"

Type of option contract that can be exercised at the buyer's discretion on any trading day up to and including the expiration date. This differs from a European style option, which may only be exercised on its expiration date.

","related_topics":[]},{"id":9,"term":"Approved Delivery Facility","definition":"

Any bank, depository, stockyard, mill, warehouse, plant or elevator authorized by the Exchange for delivery of Exchange contracts.

","related_topics":[]},{"id":10,"term":"Approved Warehouse","definition":"

Any warehouse which has been officially approved by the exchange and from which actual deliveries of commodities may be made on futures contracts.

","related_topics":[]},{"id":11,"term":"Arbitrage","definition":"

The simultaneous purchase of cash, futures, or options in one market against the sale of cash, futures or options in a different market in order to profit from a price disparity.

","related_topics":[]},{"id":12,"term":"Ask Price","definition":"

Also called the "offer." Indicates a willingness to sell a futures or options on futures contract at a given price.

","related_topics":[]},{"id":13,"term":"Assignment (Options)","definition":"

The process by which the CME clearing house, in response to a long exercising its option, randomly selects a seller to fulfill its obligation to buy or sell the underlying futures contract at its strike price. The assigned seller of a put must buy the underlying futures contract; the assigned seller of a call must sell the underlying futures contract.

","related_topics":[]},{"id":14,"term":"Assignments (Delivery)","definition":"

The process by which the CME clearing house selects the long position to accept delivery on a contract for which a seller has submitted a delivery notice.

","related_topics":[]},{"id":15,"term":"Associated Person (AP)","definition":"

A person, commonly called a commodity broker, associated with and soliciting customers and orders for a futures commission merchant or introducing broker. The AP must pass a Series 3 examination, be licensed by the Commodity Futures Trading Commission and be a member of the National Futures Association.

","related_topics":[]},{"id":16,"term":"At-The-Money","definition":"

The option with a strike (or exercise) price closest to the underlying futures price.

","related_topics":[]},{"id":17,"term":"Automated Trading System (ATS)","definition":"

Automated trading system (ATS); a trading method in which a computer makes decisions and enters orders without a person entering those orders. This is a programmatic way of representing the trader.

","related_topics":[]},{"id":18,"term":"Automatic Exercise","definition":"

Following options expiration, an option which is in-the-money is exercised automatically by the clearinghouse, unless the holder of the option submits specific instructions to the contrary. Please refer to individual contract specifications for Automatic Exercise guidelines.

","related_topics":[]},{"id":19,"term":"Average Daily Volume","definition":"

Volume for a specified time period divided by the number of business days within that same time period.

","related_topics":[]},{"id":20,"term":"Back Months","definition":"

The futures or options on futures contracts being traded that are further from expiration that the current or “front month” contract. Also called deferred or distant months.

","related_topics":[]},{"id":21,"term":"Backspreads","definition":"

Selling one or more at-the-money options and buying a larger number of out-of-the-money options. Backspreads may generate trading profits if implied volatility increases and/or the underlying instrument’s price moves sufficiently in the anticipated direction.

","related_topics":[]},{"id":22,"term":"Backwardation","definition":"

Market situation in which futures prices are lower in succeeding delivery months. Also known as an inverted market. The opposite of contango.

","related_topics":[]},{"id":23,"term":"Balance Of Trade","definition":"

The difference between a country's imports and exports.

","related_topics":[]},{"id":24,"term":"Bar Chart","definition":"

A graph of prices, volume and open interest for a specified time period used by the chartist to forecast market trends. For example, a daily bar chart plots each trading session's open, high, low and settlement prices.

","related_topics":[]},{"id":25,"term":"Barrel","definition":"

A unit of volume measure used for petroleum and refined products. 1 barrel = 42 U.S. gallons.

","related_topics":[]},{"id":26,"term":"Barrels Per Day","definition":"

Barrel per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. For example, an oil field might produce 100,000 bpd, and a country might consume 1 million bpd.

","related_topics":[]},{"id":27,"term":"Base Metals","definition":"

Copper, aluminum, lead, nickel, and tin. These metals are defined as base because they oxidize or corrode relatively easily.

","related_topics":[]},{"id":28,"term":"Basis","definition":"

The difference between the spot or cash price and the futures price of the same or a related commodity. Basis is usually computed to the near future, and may represent different time periods, product forms, qualities and locations. The local cash market price minus the price of the nearby futures contract is equal to the basis.

","related_topics":[]},{"id":29,"term":"Basis Point","definition":"

One-hundredth (.01) of a full index point or percentage.

","related_topics":[]},{"id":30,"term":"Basis Risk","definition":"

The uncertainty as to whether the cash-futures spread will widen or narrow between the time a hedge position is implemented and liquidated.

","related_topics":[]},{"id":31,"term":"Batch","definition":"

A measured amount in which crude oil and refined product shipments are sent through a pipeline.

","related_topics":[]},{"id":32,"term":"Bear","definition":"

One who believes prices will move lower.

","related_topics":[]},{"id":33,"term":"Bear Market","definition":"

A market in which prices are declining.

","related_topics":[]},{"id":34,"term":"Bear Spread (Futures)","definition":"

In most commodities and financial instruments, the term refers to selling the nearby contract month, and buying the deferred contract, to profit from a change in the price relationship.

","related_topics":[]},{"id":35,"term":"Bear Spread (Options)","definition":"

A vertical spread involving the sale of the lower strike call and the purchase of the higher strike call, called a bear call spread. Also, a vertical spread involving the sale of the lower strike put and the purchase of the higher strike put, called a bear put spread.

","related_topics":[]},{"id":36,"term":"Beta","definition":"

A measure of an asset's return in relation to an underlying factor or index; e.g. the relationship between the movement of an individual stock or a portfolio and that of the overall stock market.

","related_topics":[]},{"id":37,"term":"Bid Price","definition":"

An offer to buy a specific quantity of a commodity at a stated price or the price that the market participants are willing to pay.

","related_topics":[]},{"id":38,"term":"Bid/Ask Spread","definition":"

The price difference between the bid and offer price.

","related_topics":[]},{"id":39,"term":"Block Trade","definition":"

A privately negotiated futures or option on futures transaction that is executed apart from the public auction market and that is permitted in designated contracts subject to specified conditions. These trades are governed by Rule 526 (“Block Trades”).

","related_topics":[]},{"id":40,"term":"Blowoff Volume","definition":"

An extraordinarily high volume trading session occurring suddenly in an uptrend, possibly signaling the end of the trend.

","related_topics":[]},{"id":41,"term":"Bond","definition":"

Instrument traded on the cash market representing a debt a government entity or of a company.

","related_topics":[]},{"id":42,"term":"Breakaway Gap","definition":"

A chart pattern described by gap in prices that may signal the end of a price pattern and the beginning of an important market move.

","related_topics":[]},{"id":43,"term":"Breakeven","definition":"

The point at which an option buyer or seller experiences no loss and no profit on an option. Call breakeven equals the strike price plus the premium; put breakeven equals the strike price minus the premium.

","related_topics":[]},{"id":44,"term":"British Thermal Unit (Btu)","definition":"

The amount of heat required to increase the temperature of a pound of water 1o Fahrenheit. A Btu is used as a common measure of heating value for different fuels. Prices of different fuels and their units of measure (dollars per barrel of crude, dollars per ton of coal, cents per gallon of gasoline, cents per thousand cubic feet of natural gas) can be easily compared when expressed as dollars and cents per million Btus.

","related_topics":[]},{"id":45,"term":"Brokerage","definition":"

The fee paid to an agent to facilitate the execution of orders.

","related_topics":[]},{"id":46,"term":"Brokerage House","definition":"

A firm that handles orders to buy and sell futures and options contracts for customers.

","related_topics":[]},{"id":47,"term":"Bull","definition":"

One who expects prices to rise.

","related_topics":[]},{"id":48,"term":"Bull Market","definition":"

A market in which prices are rising.

","related_topics":[]},{"id":49,"term":"Bull Spread (Futures)","definition":"

In most commodities and financial instruments, the term refers to buying the nearby month, and selling the deferred month, to profit from the change in the price relationship.

","related_topics":[]},{"id":50,"term":"Bull Spread (Options)","definition":"

A vertical spread involving the purchase of the lower strike call and the sale of the higher strike call, called a bull call spread. Also, a vertical spread involving the purchase of the lower strike put and the sale of the higher strike put, called a bull put spread.

","related_topics":[]},{"id":51,"term":"Bundle","definition":"

The simultaneous sale or purchase of one each of a series of consecutive futures contracts. Bundles provide a readily available, widely accepted method for executing multiple futures contracts with a single transaction.

","related_topics":[]},{"id":52,"term":"Business Day","definition":"

Any day on which the Exchange is open for business.

","related_topics":[]},{"id":53,"term":"Butterfly Options Spread","definition":"

A three-legged option spread in which each leg has the same expiration date but different strike prices.

","related_topics":[]},{"id":54,"term":"Butterfly Spread","definition":"

The placing of two inter-delivery spreads in opposite directions with the center delivery month common to both spreads.

","related_topics":[]},{"id":55,"term":"Cabinet Price","definition":"

Nominal price for liquidating deep-out-of-the-money options contracts. Defined as the lowest possible tradable price for this option, and is determined within the Clearing System. Trades on options done at a price equal to zero are considered cabinet trades.

","related_topics":[]},{"id":56,"term":"Cabinet Trade (Cab)","definition":"

A trade that allows options traders to execute deep out of the money options by trading the option at a price less than the minimum tick (based on the minimal allowable tick convention).

","related_topics":[]},{"id":57,"term":"Calendar Spread (Futures)","definition":"

Also called a intra-commodity spread. The simultaneous purchase and sale of the same futures contract, but different contract months. (i.e., buying a September CME S&P 500® futures contract and selling a December CME S&P 500 futures contract).

","related_topics":[]},{"id":58,"term":"Calendar Spread (Options)","definition":"

The simultaneous purchase and sale of options on futures contracts of the same strike price, but different expiration dates.

","related_topics":[]},{"id":59,"term":"Call Option","definition":"

A contract between a buyer and seller in which the buyer pays a premium and acquires the right, but not the obligation, to purchase a specified futures contract at the strike price on or prior to expiration. The seller receives a premium and is obligated to deliver, or sell, the futures contract at the specified strike price should a buyer elect to exercise the option. Also see American Style Option and European Style Option.

","related_topics":[]},{"id":60,"term":"Car","definition":"

A contract or unit of trading. Originally, one contract, or "car," was the quantity of a commodity that would fill a railroad car. See also lot.

","related_topics":[]},{"id":61,"term":"Carrying Charge","definition":"

For physical commodities such as grains and metals, the cost of storage space, insurance, and finance charges incurred by holding a physical commodity. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of funds necessary to buy the instrument. Also referred to as cost of carry.

","related_topics":[]},{"id":62,"term":"Cash Commodity","definition":"

The actual physical commodity or financial instrument as distinguished from the futures contract that is based on the physical commodity or financial instrument. Also referred to as “spot.”

","related_topics":[]},{"id":63,"term":"Cash For Futures","definition":"

See Exchange For Physicals.

","related_topics":[]},{"id":64,"term":"Cash Market","definition":"

A place where people buy and sell the actual commodities, i.e., grain elevator, bank, etc. Spot usually refers to a cash market price for a physical commodity that is available for immediate delivery. A forward contract is a cash contract in which a seller agrees to deliver a specific cash commodity to a buyer sometime in the future. Forward contracts, in contrast to futures contracts, are privately negotiated and are not standardized.

","related_topics":[]},{"id":65,"term":"Cash Price","definition":"

Current market price of the actual or physical commodity. Also called the spot price.

","related_topics":[]},{"id":66,"term":"Cash Sales","definition":"

The sale of commodities in local cash markets such as elevators, terminals, packing houses and auction markets.

","related_topics":[]},{"id":67,"term":"Cash Settlement","definition":"

A settlement method used in certain future and option contracts where, upon expiration or exercise, the buyer does not receive the underlying commodity but the associated cash position. For buyers not wishing to take actual possession of the underlying physical commodity, cash settlement is sometimes a more convenient method of transacting business. For example, the purchaser of an E-mini S&P future is unable to take ownership of the index at expiration. Therefore he simply pays or receives the difference between the purchase price and the price of S&P futures contract at settlement.

","related_topics":[]},{"id":68,"term":"CEA Or Act","definition":"

The term "Act" or “CEA” shall mean the Commodity Exchange Act, as amended from time to time.

","related_topics":[]},{"id":69,"term":"Central Bank","definition":"

A government bank that regulates a country's banks and manages a nation's monetary policy. The Federal Reserve is the central bank in the United States, whereas the European Central Bank (ECB) is the central bank of the European Monetary Union.

","related_topics":[]},{"id":70,"term":"CFTC Or Commission","definition":"

The U.S. Commodity Futures Trading Commission as created by the Commodity Futures Trading Commission Act of 1974.

","related_topics":[]},{"id":71,"term":"Chicago Board Of Trade (CBOT)","definition":"

The Board of Trade of the City of Chicago, Inc.

","related_topics":[]},{"id":72,"term":"Chicago Mercantile Exchange (CME)","definition":"

Acronym for the CHICAGO MERCANTILE EXCHANGE INC. On July 9, 2007, Chicago Mercantile Exchange Holdings Inc. and Chicago Board of Trade Holdings, Inc. completed the merger of their companies, creating the world's largest and most diverse exchange now known as CME Group A CME/Chicago Board of Trade Company.

","related_topics":[]},{"id":73,"term":"Clearing","definition":"

The procedure through which a clearing house becomes the buyer to each seller of a futures contract and the seller to each buyer, and assumes the responsibility of ensuring that each buyer and seller performs on each contract.

","related_topics":[]},{"id":74,"term":"Clearing Fee","definition":"

A fee charged by the exchange for each contract cleared. There are also clearing fees associated with deliveries, creation of a futures position resulting from an option exercise or assignment, Exchange for Physicals (EFP), block trades, transfer trades and adjustments.

","related_topics":[]},{"id":75,"term":"Clearing Firm","definition":"

A company that works directly through an exchange's clearing house to execute trades on behalf of futures market participants.

","related_topics":[]},{"id":76,"term":"Clearing House","definition":"

The division of a futures exchange that confirms, clears and settles all trades through an exchange.

","related_topics":[]},{"id":77,"term":"Clearing Member","definition":"

A firm meeting the requirements of, and approved for, clearing membership at the Exchange. The term "clearing member" as used in the Rules shall include all clearing member categories set forth in Rule 900, unless otherwise specified.

","related_topics":[]},{"id":78,"term":"Close","definition":"

The period at the end of the trading session officially designated by the exchange during which all transactions are considered "made at the close." Sometimes used to refer to the closing range.

","related_topics":[]},{"id":79,"term":"Closing Bell","definition":"

Any signal which indicates the conclusion of normal daily trading hours in any commodity.

","related_topics":[]},{"id":80,"term":"Closing Price","definition":"

The last price of a contract at the end of a trading session.

","related_topics":[]},{"id":81,"term":"Closing Range","definition":"

The high and low prices, inclusive of bids and offers, recorded during the time period designated by the Exchange as the close of pit trading in a particular contract.

","related_topics":[]},{"id":82,"term":"CME Clearing House","definition":"

The division of CME Group that confirms, clears and settles all CME Group trades. CME Clearing also collects and maintains performance bond funds, regulates delivery and reports trading data.

","related_topics":[]},{"id":83,"term":"CME Globex","definition":"

The first global electronic trading system for futures and options has evolved to become the world's premier marketplace for derivatives trading. With continual enhancements, the platform has effectively enabled CME, already known for innovation, to transform itself into a leading high-tech, global financial derivatives exchange.

","related_topics":[]},{"id":84,"term":"CME Group Inc.","definition":"

CME Group or CME Group Inc., is the world’s leading and most diverse derivatives marketplace with exchanges that offer the widest range of global benchmark products across all major asset classes, including derivatives based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals and weather, as well as clearing services for exchange traded and over-the-counter products.

","related_topics":[]},{"id":85,"term":"Collar","definition":"

A supply contract between a buyer and seller of a commodity, whereby the buyer is assured that he will not have to pay more than some maximum price, and whereby the seller is assured of receiving some minimum price. This is analogous to an options fence or collar, also known as a range forward.

","related_topics":[]},{"id":86,"term":"Commission","definition":"

The one time fee charged by a broker to a customer when the customer executes a futures or option on futures trade through the brokerage firm.

","related_topics":[]},{"id":87,"term":"Commodity","definition":"

Any product approved and designated for trading or clearing in accordance with the rules of an exchange. Also may refer to a physical commodity.

","related_topics":[]},{"id":88,"term":"Commodity Futures Trading Commission","definition":"

Also known as the CFTC, this is the independent governmental organization that oversees futures and options trading in the United States.

","related_topics":[]},{"id":89,"term":"Commodity Futures Trading Commission (CFTC)","definition":"

Acronym for the Commodity Futures Trading Commission as created by the Commodity Futures Trading Commission Act of 1974. This government agency regulates the nation's commodity futures industry.

","related_topics":[]},{"id":90,"term":"Commodity Pool","definition":"

An enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures contracts or commodity options.

","related_topics":[]},{"id":91,"term":"Commodity Pool Operator (CPO)","definition":"

An individual or organization that operates or solicits funds for a commodity pool.

","related_topics":[]},{"id":92,"term":"Commodity Trading Advisor (CTA)","definition":"

A person who, for compensation or profit, directly or indirectly advises others as to the value or the advisability of buying or selling futures contracts or commodity options. Advising indirectly includes exercising trading authority over a customer's account as well as providing recommendations through written publications or other media.

","related_topics":[]},{"id":93,"term":"Common Currency","definition":"

Currency that is eliminated when calculating a cross rate between two currencies when their exchange rates are expressed in terms of the common currency; normally the US dollar.

","related_topics":[]},{"id":94,"term":"Consumer Price Index (CPI)","definition":"

A measuring the average price of consumer goods and services purchased by U.S. households. It is one of several price indices calculated by national statistical agencies. The percent change in the CPI is a measure of inflation. The CPI can be used to index (i.e., adjust for the effects of inflation) wages, salaries, pensions, or regulated or contracted prices.

","related_topics":[]},{"id":95,"term":"Contango Market","definition":"

A market situation in which prices are higher in the succeeding delivery months than in the nearest delivery month. Opposite of backwardation.

","related_topics":[]},{"id":96,"term":"Contract Grades","definition":"

The standard grades of commodities or instruments listed in the rules of the exchanges that must be met when delivering cash commodities against futures contracts. Grades are often accompanied by a schedule of discounts and premiums allowable for delivery of commodities of lesser or greater quality than the standard called for by the exchange.

","related_topics":[]},{"id":97,"term":"Contract Month/Year","definition":"

The month and year in which a given contract is delivered in accordance with the Rules (for physically delivered contracts) or the month and year in which a given contract is finally settled in accordance with the Rules (for cash settled contracts). Synonymous with DELIVERY MONTH/YEAR.

","related_topics":[]},{"id":98,"term":"Contract Size","definition":"

The actual amount of a commodity represented in a futures or options contract as specified in the contract specifications.

","related_topics":[]},{"id":99,"term":"Convergence","definition":"

A term referring to cash and futures prices tending to come together (i.e., the basis approaches zero) as the futures contract nears expiration.

","related_topics":[]},{"id":100,"term":"Conversion (Options)","definition":"

A delta-neutral arbitrage transaction involving a long futures contract, a long put option, and a short call option. The put and call options have the same strike price and same expiration date.

","related_topics":[]},{"id":101,"term":"Cost Of Carry","definition":"

","related_topics":[]},{"id":102,"term":"counterparty","definition":"

The individual or company (i.e., the buyer or seller) on the opposite side of any trade.

","related_topics":[]},{"id":103,"term":"Country Risk","definition":"

Risk associated with an FX (foreign exchange) transaction, referring to potential political or economic instability.

","related_topics":[]},{"id":104,"term":"Coupon","definition":"

The interest rate on a debt instrument expressed in terms of a percent on an annualized basis that the issuer guarantees to pay the holder until maturity.

","related_topics":[]},{"id":105,"term":"Cover","definition":"

To offset a short futures or options position.

","related_topics":[]},{"id":106,"term":"Covered Call","definition":"

Position where a call option is sold in concert with a long position in the futures contract.

","related_topics":[]},{"id":107,"term":"Crack Spreads","definition":"

The simultaneous purchase or sale of crude oil against the sale or purchase of refined petroleum products. These spread differentials which represent refining margins are normally quoted in dollars per barrel by converting the product prices into dollars per barrel (multiply the cents-per-gallon price by 42) and subtracting the crude oil price.

","related_topics":[]},{"id":108,"term":"Credit Derivative","definition":"

A credit derivative is a contractual agreement designed to shift credit risk between parties. Originally used primarily by banks to hedge and diversify the credit risk of their customers in the event they could not pay back their loans. In most basic terms, a credit default swap is similar to an insurance contract, providing the buyer, usually a debt holder, with protection against the borrower not repaying the debt.

","related_topics":[]},{"id":109,"term":"Credit Spread","definition":"

An option spread in which there is a net collection of premium.

","related_topics":[]},{"id":110,"term":"Crop (Marketing) Year","definition":"

The time span from harvest to harvest for agricultural commodities. The crop marketing year varies slightly with each ag commodity, but it tends to begin at harvest and end before the next year's harvest, e.g., the marketing year for soybeans begins September 1 and ends August 31. The futures contract month of November represents the first major new-crop marketing month, and the contract month of July represents the last major old-crop marketing month for soybeans.

","related_topics":[]},{"id":111,"term":"Crop Reports","definition":"

Reports compiled by the U.S. Department of Agriculture on various ag commodities that are released throughout the year. Information in the reports includes estimates on planted acreage, yield, and expected production, as well as comparisons to production from previous years.

","related_topics":[]},{"id":112,"term":"Cross Hedging","definition":"

Hedging a cash commodity using a different but related futures contract when there is no futures contract for the cash commodity being hedged and the cash and futures markets follow similar price trends (e.g., using soybean meal futures to hedge fish meal).

","related_topics":[]},{"id":113,"term":"Cross Margining","definition":"

The process of allowing for a reduction in performance bond (margin) requirements. This reduction is possible because risk is reduced when offsetting positions are cleared by the same or affiliated clearing members.

","related_topics":[]},{"id":114,"term":"Cross Rate","definition":"

The exchange rate between two currencies, in which the home country's currency is not included. In the U.S., the Euro/Yen rate would be considered a cross rate, while in Europe or Japan it would be considered a primary pair.

","related_topics":[]},{"id":115,"term":"Crude Oil","definition":"

A mixture of hydrocarbons that exists as a liquid in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Crude is the raw material which is refined into gasoline, heating oil, jet fuel, propane, petrochemicals, and other products.

","related_topics":[]},{"id":116,"term":"Crush Spread","definition":"

In the soybean futures market, the simultaneous purchase of soybean futures and the sale of soybean meal and soybean oil futures to establish a processing margin.

","related_topics":[]},{"id":117,"term":"Current Delivery Month","definition":"

The futures contract which matures and becomes deliverable during the present month or the month closest to delivery. Also called the spot month.

","related_topics":[]},{"id":118,"term":"Current Yield","definition":"

A term used frequently in bond transactions. Current yield is computed by dividing the annual amount of interest by the price paid for the bond or security. If the security is purchased at a discount from the par or principal value, the current yield with be higher than the stated interest or coupon rate.

","related_topics":[]},{"id":119,"term":"Daily Trading Limits","definition":"

The maximum price range permitted a contract during one trading session. Trading limits are set by the exchange for certain contracts.

","related_topics":[]},{"id":120,"term":"Day ","definition":"

An order that will be canceled if not filled by the conclusion of the Globex trade date for which it was entered.

","related_topics":[]},{"id":121,"term":"Day Order","definition":"

An order to buy or sell a contract during that trading day only. Session/Day orders that have been placed but not executed during regular trading hours (RTH) do not carry over to the next trade date. Similarly, Session/Day orders placed during electronic trading hours (ETH) are only executed for that trade date

","related_topics":[]},{"id":122,"term":"Day Trading","definition":"

Establishing a position or multiple positions and then offsetting them within the same day, ending the day with no established position in the market.

","related_topics":[]},{"id":123,"term":"Debit Spread","definition":"

An option spread in which there is a net payout of premium.

","related_topics":[]},{"id":124,"term":"Default","definition":"

Failure to perform on a contract as required by exchange rules, such as the failure to meet settlement variation, a performance bond call, or to make or take delivery.

","related_topics":[]},{"id":125,"term":"Deferred","definition":"

See "back months".

","related_topics":[]},{"id":126,"term":"Delivery","definition":"

The term has distinct meaning when used in connection with futures contracts. Delivery generally refers to the changing of ownership or control of a commodity under specific terms and procedures established by the exchange upon which the contract is traded. Typically, except for energy, the commodity must be placed in an approved warehouse, precious metals depository, or other storage facility, and be inspected by approved personnel, after which the facility issues a warehouse receipt, shipping certificate, demand certificate, or due bill, which becomes a transferable delivery instrument. Delivery of the instrument usually is preceded by a notice of intention to deliver. After receipt of the delivery instrument, the new owner typically can take possession of the physical commodity, can deliver the delivery instrument into the futures market in satisfaction of a short position, or can sell the delivery instrument to another market participant who can use it for delivery into the futures market in satisfaction of his short position or for cash, or can take delivery of the physical himself. The procedure differs for energy contracts. Bona fide buyers or sellers of the underlying energy commodity can stand for delivery. If a buyer or seller stands for delivery, the contract is held through the termination of trading. The buyer and seller each file a notice of intent to make or take delivery with their respective clearing members who file them with the Exchange. Buyers and sellers are randomly matched by the Exchange. The delivery payment is based on the contract's final settlement price. Some futures contracts, such as stock index futures, are cash settled.

","related_topics":[]},{"id":127,"term":"Delivery Day","definition":"

The calendar date on which a delivery transaction is to be completed.

","related_topics":[]},{"id":128,"term":"Delivery Month Performance Bond Requirement","definition":"

Performance bond requirements applicable to all positions in the delivery month as defined by the CME clearing house.

","related_topics":[]},{"id":129,"term":"Delivery Month/Year","definition":"

","related_topics":[]},{"id":130,"term":"Delivery Notice","definition":"

The notice that the seller presents to the CME clearing house stating his intention to make delivery against an open short futures position. This notice is separate and distinct from the warehouse receipt or other instruments that will be used to transfer title during the actual delivery.

","related_topics":[]},{"id":131,"term":"Delivery Point","definition":"

Those locations designated by the exchange at which actual commodities may be delivered in fulfillment of a futures contract.

","related_topics":[]},{"id":132,"term":"Delta","definition":"

The measure of the price-change relationship between an option and the underlying futures price. Equal to the change in premium divided by the change in futures price.

","related_topics":[]},{"id":133,"term":"Derivative","definition":"

A financial instrument whose value is based upon other financial instruments, such as a stock index, interest rates or commodity indexes.

","related_topics":[]},{"id":134,"term":"Devaluation (Of Currency)","definition":"

A government's reduction of the value of its currency, generally through an official announcement.

","related_topics":[]},{"id":135,"term":"Deviation","definition":"

A noticeable or marked departure from the norm, plan, standard, procedure, or variable being reviewed. Similar to variance.

","related_topics":[]},{"id":136,"term":"Diesel Fuel","definition":"

Distillate fuel oil used in compression-ignition engines. It is similar to home heating oil, but must meet a cetane number specification of 40 or more.

","related_topics":[]},{"id":137,"term":"Differentials","definition":"

Price differences between classes, grades, and delivery locations of various stocks of the same commodity.

","related_topics":[]},{"id":138,"term":"Distillate Fuel Oil","definition":"

Products of refinery distillation sometimes referred to as middle distillates; kerosene, diesel fuel, and home heating oil.

","related_topics":[]},{"id":139,"term":"Double Top, Bottom","definition":"

A chart formation that signals a possible price trend reversal.

","related_topics":[]},{"id":140,"term":"Downstream","definition":"

A Petroleum industry term referring to commercial oil and gas operations beyond the production phase; oil refining and marketing, and natural gas transmission and distribution.

","related_topics":[]},{"id":141,"term":"Econometrics","definition":"

The application of statistical and mathematical methods in the field of economics to test and quantify economic theories and the solutions to economic problems.

","related_topics":[]},{"id":142,"term":"EFP","definition":"

See "Exchange for Physical (EFP) Trade"

","related_topics":[]},{"id":143,"term":"EFR","definition":"

Exchange for Risk. An EFR is a privately negotiated trade that entails the exchange of a futures position for a corresponding OTC instrument. The number in this column represents the number of EFR transactions for the given date.

","related_topics":[]},{"id":144,"term":"Electronic Trading","definition":"

Computerized system for placing orders, bid and offer posting, and trade execution. The CME Globex platform is an example of an electronic trading system.

","related_topics":[]},{"id":145,"term":"Emergency","definition":"

Any occurrence or circumstance listed below which, in the opinion of the Exchange, requires immediate action and threatens or may threaten fair and orderly trading, clearing, delivery or liquidation of any contracts on the Exchange. Occurrences and circumstances which the Exchange may deem emergencies are set forth in the Rules.

","related_topics":[]},{"id":146,"term":"Equilibrium Price","definition":"

The price at which the quantity demanded of a commodity is equal to the quantity supplied.

","related_topics":[]},{"id":147,"term":"Equity","definition":"

(1) Instrument traded on the cash market representing a share in the capital of a company; (2) The net value of a commodity account as determined by combining the ledger balance with an unrealized gain or loss in open positions as marked to the market.

","related_topics":[]},{"id":148,"term":"equity index","definition":"

A measure of a group of stocks, also called equities, used to describe the market and analyze the return on specific stock investment.

","related_topics":[]},{"id":149,"term":"ETH Session (Electronic Trading Hours)","definition":"

The trading session during which the CME Globex system is used. Contact the CME Globex Control Center (GCC) for the current schedule of trading hours.

","related_topics":[]},{"id":150,"term":"Euribor (Euro Interbank Offered Rate)","definition":"

The average interest rate at which euro interbank term deposits within the euro zone are offered by one prime bank to another prime bank.

","related_topics":[]},{"id":151,"term":"Eurodollars","definition":"

U.S. dollars on deposit with a bank outside of the United States and, consequently, outside the jurisdiction of the United States. The bank could be either a foreign bank or a subsidiary of a U.S. bank.

","related_topics":[]},{"id":152,"term":"European Central Bank","definition":"

The European Monetary Union's central bank, which governs monetary policy for member countries.

","related_topics":[]},{"id":153,"term":"European Style Option","definition":"

Type of option contract which can only be exercised on expiration date.

","related_topics":[]},{"id":154,"term":"European Terms","definition":"

A method of quoting exchange rates, which measures the amount of foreign currency needed to buy one U.S. dollar, i.e., foreign currency unit per dollar. Reciprocal of European Terms is another method of quoting exchange rates, which measures the U.S. dollar value of one foreign currency unit, i.e., U.S. dollars per foreign units.

","related_topics":[]},{"id":155,"term":"Excess Margin","definition":"

The dollar amount by which the equity exceeds the margin requirements in a performance bond account.

","related_topics":[]},{"id":156,"term":"Exchange","definition":"

A central marketplace with established rules and regulations where buyers and sellers meet to trade futures and options on futures contracts. See futures Exchange.

","related_topics":[]},{"id":157,"term":"Exchange For Physical (EFP) Trade","definition":"

A privately negotiated and simultaneous exchange of an Exchange futures position for a corresponding cash position. An EFP is one type of an authorized Exchange for Related Position (EFRP) trade governed by Rule 538.

","related_topics":[]},{"id":158,"term":"Exchange For Risk (EFR) Trade","definition":"

A privately negotiated and simultaneous exchange of an Exchange futures position for a corresponding OTC swap or other OTC instrument. An EFR is one type of an authorized Exchange for Related Position (EFRP) trade governed by Rule 538.

","related_topics":[]},{"id":159,"term":"Exchange Of Futures For Cash","definition":"

A transaction in which the buyer of a cash commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way, the opposite hedges in futures of both parties are closed out simultaneously.

","related_topics":[]},{"id":160,"term":"Exchange Of Options For Options (EOO) Trade","definition":"

A privately negotiated and simultaneous exchange of an Exchange option position for a corresponding OTC option position or other OTC instrument with similar characteristics. An EOO is one type of an authorized Exchange for Related Position (EFRP) trade governed by Rule 538.

","related_topics":[]},{"id":161,"term":"execution","definition":"

The completion of an order to buy or sell a futures contract.

","related_topics":[]},{"id":162,"term":"Exercise","definition":"

To invoke the right granted under the terms of an options contract to buy or sell the underlying futures contract. The option holder (long) is the one who exercises the option. Call holders exercise the right to buy the underlying future, while put holders exercise the right to sell the underlying future. The short option holder is assigned a position opposite to that of the option buyer. CME Clearing removes the option and creates the futures positions on the firms' books on the day of exercise.

","related_topics":[]},{"id":163,"term":"Exercise Notice","definition":"

A notice tendered by a brokerage firm informing the CME clearing house that the holder of the option would like to exchange their option for the underlying futures contract.

","related_topics":[]},{"id":164,"term":"Exercise Or Strike Price","definition":"

The price at which the buyer of a call can purchase the commodity during the life of the option, and the price at which the buyer of a put can sell the commodity during the life of the option.

","related_topics":[]},{"id":165,"term":"Exercise Price","definition":"

The terms "exercise price", "strike price" and "striking price" shall be synonymous and mean the price at which the futures contract underlying the options contract will be assigned upon exercise of the option. For options contracts which are exercised into multiple futures contracts, the exercise price represents the spread price differential between the futures contracts.

","related_topics":[]},{"id":166,"term":"Exhaustion Gap","definition":"

A chart pattern described by gap in prices near the top or bottom of a price move that may signal an abrupt turn in the market.

","related_topics":[]},{"id":167,"term":"Expiration","definition":"

The last day of trading for a futures contract. The last day on which an option may be exercised and exchanged for the underlying contract.

","related_topics":[]},{"id":168,"term":"Expiration Date","definition":"

The term "expiration date" shall mean the last day on which an options contract may be exercised.

","related_topics":[]},{"id":169,"term":"Extrinsic Value","definition":"

The amount of money option buyers are willing to pay for an option in the anticipation that, over time, a change in the underlying futures price will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value.

","related_topics":[]},{"id":170,"term":"Fair Value (Futures)","definition":"

Most frequently used in reference to a stock index futures contract price being in equilibrium to the underlying cash index. The equilibrium to the futures price would be the spot price after considering compounded interest (and dividends not received due to being long the futures contract rather than the physical stocks) over a period of time.

","related_topics":[]},{"id":171,"term":"Fair Value (Options)","definition":"

Generally refers to the market price of an option being in line with its theoretical value as predicted by an options pricing formula.

","related_topics":[]},{"id":172,"term":"Fast Market","definition":"

Term used to define unusually hectic market conditions.

","related_topics":[]},{"id":173,"term":"FCM","definition":"

See “Futures Commission Merchant”

","related_topics":[]},{"id":174,"term":"Federal Funds","definition":"

In the United States, federal funds are bank reserves at the Federal Reserve. Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clear financial transactions. Transactions in the federal funds market enable depository institutions with reserve balances in excess of reserve requirements to lend reserves to institutions with reserve deficiencies. These loans are usually made for 1 day only, i.e. "overnight." The interest rate at which the funds are lent is called the federal funds rate.

","related_topics":[]},{"id":175,"term":"Federal Funds Rate","definition":"

The rate of interest charged for the use of federal funds. See federal funds.

","related_topics":[]},{"id":176,"term":"Federal Reserve System(Fed)","definition":"

The central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (part private, part government) banking system composed of (1) the presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) 12 regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury. The current Federal Reserve Chairman is Dr. Ben S. Bernanke.

","related_topics":[]},{"id":177,"term":"Fill-And-Kill-Order (FAK)","definition":"

A FAK order is immediately filled in whole or in part at the specified price. Any remaining quantity is eliminated.

","related_topics":[]},{"id":178,"term":"Fill-Or-Kill-Order (FOK)","definition":"

FOK orders are canceled if not immediately filled for the total quantity at the specified price or better.

","related_topics":[]},{"id":179,"term":"financial futures","definition":"

A future contract whose value is based upon financial instruments such as a stock index, interest rates or foreign currency exchange rates.

","related_topics":[]},{"id":180,"term":"Financial Information Exchange (FIX) API","definition":"

An Application Program Interface (API) utilizing the propocol developed for international real-time information exchange designed to allow firms and Independent Software Vendors (ISVs) to easily integrate their order entry and routing systems with CME. It is a software library of functions that enables a member's order management system to communicate with exchange order routing systems. Member firms can run the CME FIX API on their computers to electronically send orders to and receive fills from the CME Globex platform or from the firm's exchange floor operations.

","related_topics":[]},{"id":181,"term":"financial instrument","definition":"

A commodity based in financial instruments such as a stock index, interest rates or foreign currency exchange rates.

","related_topics":[]},{"id":182,"term":"First Notice Day","definition":"

The first day on which a notice of intent to deliver a commodity in fulfillment of a futures contract can be made by the clearinghouse to a buyer. The clearinghouse also informs the sellers who they have been matched up with

","related_topics":[]},{"id":183,"term":"Flat","definition":"

Market slang to indicate that all open positions have been offset and an account has no exposure to market risk. The three common ways to describe a trader’s position in the market are long, short or flat.

","related_topics":[]},{"id":184,"term":"Flex Option","definition":"

Non-standard option in which the buyer and seller can agree to terms where the strike price may exceed the eligible range of standard strikes, the expiration date can be any business date other than the standard expiration date, or the option can be defined to expire as "American" or "European" style and the option can have any listed futures as its underlying.

","related_topics":[]},{"id":185,"term":"Floor","definition":"

Except as otherwise provided by the Exchange, the term "Floor" shall mean any trading floor on which Exchange contracts are listed for open outcry trading.

","related_topics":[]},{"id":186,"term":"Floor Broker","definition":"

An individual who executes orders on the Floor of the exchange for any other person and who is registered as a floor broker under the CEA.

","related_topics":[]},{"id":187,"term":"Floor Trader","definition":"

An exchange member who trades for his own account on the Floor of the Exchange and who is registered as a floor trader under the CEA.

","related_topics":[]},{"id":188,"term":"Force Majeure","definition":"

A standard clause which indemnifies either or both parties to a transaction whenever events which the Exchange declares to be reasonably beyond the contract.

","related_topics":[]},{"id":189,"term":"Foreign Exchange Market (FX)","definition":"

The exchange of one currency for another. Markets exist in over-the-counter, forward and FX Futures where buyers and sellers conduct foreign exchange transactions. CME® FX futures offer financial institutions, investment managers, corporations and private investors ways manage the risks associated with currency rate fluctuation and to take advantage of profit opportunities stemming from changes in currency rates.

","related_topics":[]},{"id":190,"term":"foreign exchange rate","definition":"

The price of a country's currency when converted from another country's currency.

","related_topics":[]},{"id":191,"term":"Forward Contract","definition":"

A private, cash-market agreement between a buyer and seller for the future delivery of a commodity at an agreed price. In contrast to futures contracts, forward contracts are not standardized and not transferable.

","related_topics":[]},{"id":192,"term":"Forward Points","definition":"

A metric that can be employed to calculate forward exchange rates. , Forward Points express the premium or discount for the base currency in terms of the quote currency. Forward Points are a function of the spot exchange rate, interest rates, and time. Forward points are added to the spot rate to obtain the forward rate.

","related_topics":[]},{"id":193,"term":"Fundamental Analysis","definition":"

The study of supply and demand information to aid in anticipating futures price trends.

","related_topics":[]},{"id":194,"term":"Fungibility","definition":"

Futures contracts capable of mutual substitution the interchangeability of contracts. For example, five E-mini S&P 500 contracts are fungible and able to offset one standard-sized S&P 500 contract.

","related_topics":[]},{"id":195,"term":"Futures","definition":"

Standardized contracts for the purchase and sale of financial instruments or physical commodities for future delivery on a regulated commodity futures exchange.

","related_topics":[]},{"id":196,"term":"Futures Commission Merchant (FCM)","definition":"

An individual or organization which solicits or accepts orders to buy or sell futures or options on futures contracts and accepts money or other assets from customer in connection with such orders. An FCM must be registered with the CFTC.

","related_topics":[]},{"id":197,"term":"Futures Contract","definition":"

A legally binding agreement to buy or sell a commodity or financial instrument at a later date pursuant to the Rules of the Exchange.

","related_topics":[]},{"id":198,"term":"futures exchange","definition":"

A central marketplace where buyers and sellers come together to trade futures and options contracts.

","related_topics":[]},{"id":199,"term":"Futures Industry Association (FIA)","definition":"

Futures Industry Association. A national not-for-profit futures industry trade association that represents the brokerage community on industry, regulatory, political, and educational issues.

","related_topics":[]},{"id":200,"term":"Futures-Equivalent","definition":"

A term frequently used with reference to speculative position limits for options on futures contracts. The futures-equivalent of an options position is the number of options multiplied by the previous day's risk factor or delta for the options series. For example, 10 deep out-of-the money options with a risk factor of 0.20 would be considered two futures-equivalent contracts. The delta or risk factors used for this purpose is the same as that used in delta-based margining and risk analysis systems.

","related_topics":[]},{"id":201,"term":"Gamma","definition":"

The measure of the change in an option's delta given a change in the futures price. Equal to the change in delta divided by the change in futures price.

","related_topics":[]},{"id":202,"term":"Gap","definition":"

A price area at which the market didn't trade from one day to the next. See breakaway gap, exhaustion gap, and runaway gap. >

","related_topics":[]},{"id":203,"term":"Gap Theory","definition":"

A type of technical analysis that studies gaps in prices.

","related_topics":[]},{"id":204,"term":"Global Command Center (GCC)","definition":"

CME Global Command Center, the exchange department that supports and maintains CME's electronic trading system.The CME® Global Command Center (GCC) can assist registered CME Globex contacts in canceling orders during emergency situations, when an order cannot be canceled through ordinary means

","related_topics":[]},{"id":205,"term":"Globex","definition":"

GLOBEX refers to CME Globex, an electronic trading platform.

","related_topics":[]},{"id":206,"term":"Globex Order Types","definition":"

The availability of specific Globex Order Types is dependent on the product, and not all Order Types are available for all products. Supported Order Types by Product are set forth in the Globex Reference Guide (http://www.cmegroup.com/globex/files/GlobexRefGd.pdf)

","related_topics":[]},{"id":207,"term":"Globex Terminal Operator","definition":"

Globex terminal operator refers to 1) any person who physically enters orders into Globex or 2) any automated trading system which enters orders into Globex, either directly or through an automated order routing system or independent software vendor. All Globex terminal operators must be identified to the Exchange in accordance with the provisions of Rule 576 (Identification of Globex Terminal Operators).

","related_topics":[]},{"id":208,"term":"Globex Trading Hours","definition":"

Those hours designated by the Board of Directors for trading particular contracts on GLOBEX.

","related_topics":[]},{"id":209,"term":"Good ‘Till Canceled (GTC)","definition":"

An order which will remain in force until executed, cancelled or the contract expires.

","related_topics":[]},{"id":210,"term":"Good ‘Till Date (GTD)","definition":"

An order which will remain in force through a specified trade date unless executed or canceled, or until the contract expires.

","related_topics":[]},{"id":211,"term":"Good Delivery","definition":"

Approved metals brands acceptable for delivery against the metals contracts.

","related_topics":[]},{"id":212,"term":"Good-Til-Canceled (GTC)","definition":"

Also known as an open order a GTC order, in the absence of a specific limiting designation, will remain in force during RTH and ETH until executed, canceled or the contract expires.

","related_topics":[]},{"id":213,"term":"Good-Till-Date (GTD)","definition":"

GTD orders remain in force during RTH and ETH through the specified date unless executed or canceled.

","related_topics":[]},{"id":214,"term":"Gross Domestic Product","definition":"

One of the ways of measuring the size of the economy. GDP is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year).

","related_topics":[]},{"id":215,"term":"Gross Margining","definition":"

A method by which a clearing firm's customer margins are based on the firm's positions and applicable submitted spreads. For example, if a firm had only two accounts for two customers in its customer origin and one of those accounts had three open long positions and the other had two open short positions, the firm's margin would be based on five open positions if the firm did not submit spreads (rather than one net long position).

","related_topics":[]},{"id":216,"term":"Gross Position","definition":"

The sum of a clearing firm's current open positions in a given contract.

","related_topics":[]},{"id":217,"term":"Head And Shoulders","definition":"

A sideways price formation at the top or bottom of the market that may indicate a major market reversal.

","related_topics":[]},{"id":218,"term":"Heating Oil","definition":"

No. 2 fuel oil, a distillate fuel oil used either for domestic heating or in moderate capacity commercial-industrial burners.

","related_topics":[]},{"id":219,"term":"Hedge","definition":"

The purchase or sale of a futures contract as a temporary substitute for a cash market transaction to be made at a later date. Usually involves simultaneous, opposite positions in the cash market and futures market.

","related_topics":[]},{"id":220,"term":"Hedge Ratio","definition":"

1) Ratio of the value of futures contracts purchased or sold to the value of the cash commodity being hedged, a computation necessary to minimize basis risk. 2) The ratio, determined by an option's delta, of futures to options required to establish a riskless position. For example, if a $1/barrel change in the underlying Oil futures price leads to a $0.25/barrel change in the options premium, the hedge ratio is four (four options for each futures contract).

","related_topics":[]},{"id":221,"term":"Hedger","definition":"

An individual or firm who uses the futures market to offset price risk when intending to sell or buy the actual commodity. See pure hedger, selective hedger.

","related_topics":[]},{"id":222,"term":"Hedging","definition":"

(1) Taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change; (2) A purchase or sale of futures as a temporary substitute for a cash transaction which will occur later. See long hedge and short hedge.

","related_topics":[]},{"id":223,"term":"High","definition":"

The highest price of the day for a particular futures contract.

","related_topics":[]},{"id":224,"term":"Historical Volatility","definition":"

The volatility of a financial instrument based on historical returns. This phrase is used particularly when it is wished to distinguish between the actual volatility of an instrument in the past, and the current volatility implied by the market.

","related_topics":[]},{"id":225,"term":"Hog/Corn Ratio","definition":"

The relationship of feeding costs to the dollar value of hogs. It is measured by dividing the price of hogs ($/hundredweight) by the price of corn ($/bushel). When corn prices are high relative to pork prices, fewer units of corn equal the dollar value of 100 pounds of pork. Conversely, when corn prices are low in relation to pork prices, more units of corn are required to equal the value of 100 pounds of pork. A ratio used to express the relationship of feeding costs to the dollar value of livestock.

","related_topics":[]},{"id":226,"term":"Holder","definition":"

One who purchases an option (also called the buyer).

","related_topics":[]},{"id":227,"term":"Holiday","definition":"

Any day declared to be a holiday by these rules or by a resolution of the Board on which the Exchange is closed. When any such holiday falls on Sunday, the following Monday shall be considered such holiday. When any such holiday falls on Saturday, the immediately preceding Friday shall be considered such holiday.

","related_topics":[]},{"id":228,"term":"Horizontal Spread","definition":"

The purchase of either a call or put option and the simultaneous sale of the same type of option with typically the same strike price but with a different expiration month. Also referred to as a calendar spread.

","related_topics":[]},{"id":229,"term":"House","definition":"

(1) A designation that refers to proprietary, non-segregated clearing member firm trading activity; (2) A clearing member or a firm.

","related_topics":[]},{"id":230,"term":"Hundredweight","definition":"

100 pounds. Abbreviated as cwt.

","related_topics":[]},{"id":231,"term":"Hydrocarbons","definition":"

Organic chemical compounds containing hydrogen and carbon atoms. They form the basis of all petroleum products.

","related_topics":[]},{"id":232,"term":"Implied Volatility","definition":"

The volatility implied by the market price of the option based on an option pricing model. In other words, it is the volatility that, given a particular pricing model, yields a theoretical value for the option equal to the current market price.

","related_topics":[]},{"id":233,"term":"Index","definition":"

An indicator that is representative of a whole market or market segment, usually computed by a sum product of a list of instruments' current prices and a list of weights assigned to these instruments. The index variations give trends of the market/market segment measured.

","related_topics":[]},{"id":234,"term":"Inflation","definition":"

An economic term describing conditions in which overall prices for goods and services are rising.

","related_topics":[]},{"id":235,"term":"Initial Margin","definition":"

See initial performance bond.

","related_topics":[]},{"id":236,"term":"Initial Performance Bond","definition":"

The minimum deposit a clearing firm must require from customers for each contract, when an account is new or when the account’s equity falls below minimum maintenance requirements required by the Exchange.

","related_topics":[]},{"id":237,"term":"institutional trader","definition":"

A person or entity employed to trade on behalf of entities, including institutions, investment banks, pension funds, hedge funds and mutual funds.

","related_topics":[]},{"id":238,"term":"Instrument","definition":"

A product traded at CME, i.e., the CME S&P 500 Index futures contract.

","related_topics":[]},{"id":239,"term":"Interbank Rates","definition":"

The price that major banks quote each other for currency transactions.

","related_topics":[]},{"id":240,"term":"Intercommodity Spread","definition":"

A spread in which the long and short legs are in two different but generally related commodity markets. Also called an Intermarket Spread. See spread trade.

","related_topics":[]},{"id":241,"term":"Interdelivery Spread","definition":"

A spread trade involving the simultaneous purchase of one delivery month of a given commodity futures contract and the sale of another delivery month of the same contract on the same exchange. See spread trade.

","related_topics":[]},{"id":242,"term":"Intermarket Spread","definition":"

See Intercommodity Spread

","related_topics":[]},{"id":243,"term":"In-The-Money","definition":"

A call option with a strike price lower (or a put option with a strike price higher) than the current market value of the underlying futures commodity. Therefore someone who exercised their option on a future would receive a futures position that was already “in the money”.

","related_topics":[]},{"id":244,"term":"Intracommodity Spread","definition":"

A spread involving two different months of the same commodity. Also called an Interdelivery Spread.

","related_topics":[]},{"id":245,"term":"Intrinsic Value","definition":"

The relationship of an option's in-the-money strike price to the current futures price. For a put: strike price minus futures price. For a call: futures price minus strike price.

","related_topics":[]},{"id":246,"term":"Introducing Broker (IB)","definition":"

A firm or individual that solicits and accepts orders to buy or sell futures or options on futures contracts from customers but does not accept money or other assets from such customers. An IB must be registered with the CFTC.

","related_topics":[]},{"id":247,"term":"Inverted Market","definition":"

A futures market in which the relationship between two delivery months of the same commodity is abnormal.

","related_topics":[]},{"id":248,"term":"Jet Fuel","definition":"

Kerosene-type; high-quality kerosene product used primarily as fuel for commercial turbojet and turboprop aircraft engines.

","related_topics":[]},{"id":249,"term":"Kappa","definition":"

A measure of the rate of change in an option's theoretical value for one-unit change in the volatility assumption.

","related_topics":[]},{"id":250,"term":"Karat","definition":"

A measure of the purity of gold. Pure gold is 24-karat.

","related_topics":[]},{"id":251,"term":"Key Reversal","definition":"

A chart formation that signals a reversal of the current trend. In an uptrend, the market must open above the previous day's close, make a new high for the trend and then close below the previous day's low. In a downtrend, the market must open below the previous day's close, make a new low for the trend and then close higher than the previous day's high. Key reversals on days of high volume are given more weight than others.

","related_topics":[]},{"id":252,"term":"Lagging Indicators","definition":"

Market indicators showing the general direction of the economy and confirming or denying the trend rather than predicting its direction as implied by the leading indicators. Also referred to as concurrent indicators.

","related_topics":[]},{"id":253,"term":"Last Intent Day","definition":"

The final day on which notices of intent to deliver on futures contracts may be presented to the Clearing House.

","related_topics":[]},{"id":254,"term":"Last Inventory Day","definition":"

The final day in which long firms need to report their long position via the CME Clearing deliveries system.

","related_topics":[]},{"id":255,"term":"Last Notice Day","definition":"

The final day on which notices of intent to deliver on futures contracts may be issued.

","related_topics":[]},{"id":256,"term":"Last Trading Day","definition":"

The day on which trading ceases in futures contract for a particular contract month.

","related_topics":[]},{"id":257,"term":"Lead Month","definition":"

The most current contract month in which delivery may take place in physically delivered contracts or in which cash settlement may take place in cash-settled contracts.

","related_topics":[]},{"id":258,"term":"Leading Indicators","definition":"

Market indicators that signal the state of the economy for the coming months. Some of the leading indicators include: average manufacturing workweek, initial claims for unemployment insurance, orders for consumer goods and material, percentage of companies reporting slower deliveries, change in manufacturers' unfilled orders for durable goods, plant and equipment orders, new building permits, index of consumer expectations, change in material prices, prices of stocks, change in money supply.

","related_topics":[]},{"id":259,"term":"Leg","definition":"

Each component transaction of a spread or swap.

","related_topics":[]},{"id":260,"term":"leverage","definition":"

To increase the potential return on an investment through the use of futures contracts (or other financial instruments).

","related_topics":[]},{"id":261,"term":"Limit Move","definition":"

A contract's maximum price advance or decline from the previous day's settlement price permitted in one trading session, as determined by the exchange. See Price Limit.

","related_topics":[]},{"id":262,"term":"Limit Order","definition":"

A Limit order allows the buyer to define the maximum price to pay and the seller the minimum price to accept (the limit price). A Limit order remains on the book until the order is either executed, canceled or expires. Any portion of the order that can be matched is immediately executed.

","related_topics":[]},{"id":263,"term":"Liquefied Natural Gas (LNG)","definition":"

Natural gas which has been made liquid by reducing its temperature to minus 258 degrees Fahrenheit at atmospheric pressure. Its volume is 1/600 of gas in vapor form.

","related_topics":[]},{"id":264,"term":"Liquefied Petroleum Gas (LPG)","definition":"

Propane, butane, or propane-butane mixtures derived from crude oil refining or natural gas fractionation. For convenience of transportation, these gases are liquefied through pressurization.

","related_topics":[]},{"id":265,"term":"Liquid","definition":"

A characteristic of a security or commodity market with enough units outstanding to allow large transactions without a substantial change in price. Institutional investors are inclined to seek out liquid investments so that their trading activity will not influence the market price.

","related_topics":[]},{"id":266,"term":"Liquidate","definition":"

To offset an existing position.

","related_topics":[]},{"id":267,"term":"liquidity","definition":"

The ability to buy or sell orders of any size quickly and efficiently without a substantial impact on market price.

","related_topics":[]},{"id":268,"term":"Livestock Cycle","definition":"

A long, repeating pattern of increasing and decreasing livestock supply and prices.

","related_topics":[]},{"id":269,"term":"Locals","definition":"

Exchange members who trade for their own accounts and/or fill orders for customers.

","related_topics":[]},{"id":270,"term":"London Inter-Bank Offered Rate (LIBOR)","definition":"

The price at which short term deposits are traded among major banks in London. Basically, the interest rate that banks charge each other for loans (usually in Eurodollars). The LIBOR is officially fixed once a day by a small group of large London banks, but the rate changes throughout the day.

","related_topics":[]},{"id":271,"term":"Long","definition":"

One who has bought futures or options contracts to create an open position or owns a cash commodity. Opposite of Short.

","related_topics":[]},{"id":272,"term":"Long Cash","definition":"

To own the physical commodity.

","related_topics":[]},{"id":273,"term":"Long Hedge","definition":"

The purchase of a futures contract in anticipation of an actual purchase in the cash commodity market. Used by processors or exporters as protection against an advance in the cash price. See hedge.

","related_topics":[]},{"id":274,"term":"Long Position","definition":"

A market position in which the trader has bought a futures contract or options on futures contract that does not offset a previously established short position.

","related_topics":[]},{"id":275,"term":"Long The Basis","definition":"

Position where a hedger is long the cash market and short in the futures market.

","related_topics":[]},{"id":276,"term":"Lot","definition":"

A unit of trading (used to describe a designated number of contracts). For example, a trade quantity of one equals a "one lot;" a trade quantity of four equals a "four lot." Also called cars.

","related_topics":[]},{"id":277,"term":"Low","definition":"

The lowest price of the day for a particular futures contract.

","related_topics":[]},{"id":278,"term":"macroeconomic","definition":"

The field of economics focused on movements and trends in the economy as a whole. Its central concepts include the laws of supply and demand.

","related_topics":[]},{"id":279,"term":"Maintenance Margin","definition":"

See maintenance performance bond.

","related_topics":[]},{"id":280,"term":"Maintenance Performance Bond","definition":"

The minimum equity that must be maintained for each contract in a customer's account subsequent to deposit of the initial performance bond. If the equity drops below this level, a deposit must be made to bring the account back to the initial performance bond level.

","related_topics":[]},{"id":281,"term":"Major (Energy)","definition":"

A term broadly applied to those multinational oil companies which by virtue of size, age, or degree of integration are among the preeminent companies in the international petroleum industry.

","related_topics":[]},{"id":282,"term":"Managed Account","definition":"

An arrangement by which the owner of the account gives written power of attorney to someone else, usually the broker or a commodity trading advisor, to buy and sell without prior approval of the account owner. Often referred to as a discretionary Account.

","related_topics":[]},{"id":283,"term":"Managed Futures","definition":"

The term managed futures describes an industry comprised of professional money managers know as commodity trading advisors (CTAs). These trading advisors manage client assets on a discretionary basis using global futures markets as an investment medium. Trading advisors take positions based on expected profit potential. All CTAs involved must be registered with the Commodity Futures Trading Commission (CFTC), a US government regulatory agency. While many casual observers most closely associate managed futures and Commodity Trading Advisors with trend following, the reality is that the strategies and approaches within managed futures vary tremendously, and that the one common unifying these is that these managers trade highly liquid, exchange-traded instruments and deep foreign exchange markets. As a result, the terms many fund managers choose to implement, including lock-ups, gates, side pockets, and penalties for early redemptions, rarely apply to investments in managed futures. Liquidity and transparency also simplify risk management, and investing via separately managed accounts, a common practice among managed futures investors, mitigates the risk of fraud since investors retain custody of assets.

","related_topics":[]},{"id":284,"term":"Margin Call","definition":"

See Performance Bond Call.

","related_topics":[]},{"id":285,"term":"Market (Mkt) Order","definition":"

An order with instructions to be executed upon receipt by a floor broker at the best available price.

","related_topics":[]},{"id":286,"term":"Market If Touched (MIT) Order ","definition":"

A sell (buy) order placed above (below) the market which becomes a market order when the designated price is touched.

","related_topics":[]},{"id":287,"term":"Market Maker","definition":"

A firm or person with trading privileges on an exchange who has an obligation to buy when there is an excess of sell orders and to sell when there is an excess of buy orders. In the futures industry, this term is sometimes loosely used to refer to a floor trader or local who, in speculating for his own account, provides a market for commercial users of the market.

","related_topics":[]},{"id":288,"term":"Market On Close (MOC) Order ","definition":"

An order to be executed as a market order only in the closing range.

","related_topics":[]},{"id":289,"term":"Market On Open (MOO)","definition":"

A market order entered before an opening, to be executed immediately upon the open of the trading session.

","related_topics":[]},{"id":290,"term":"Market Order (MKT)","definition":"

An order placed at any time during the trading session to immediately execute the entire order at the best available offer price (for buy orders) or bid price (for sell orders).

","related_topics":[]},{"id":291,"term":"market participant","definition":"

Any person, entity or organization who hedges and/or speculates through a futures exchange.

","related_topics":[]},{"id":292,"term":"Market Profile","definition":"

Market Profile is an analytical tool that organizes price and time information to reveal trends and patterns as they develop. Its ability to identify areas where price is being accepted and where price is being rejected allowing traders of any market to adjust their trading accordingly.

","related_topics":[]},{"id":293,"term":"Market-If-Touched (MIT)","definition":"

An order that automatically becomes a market order if the price is reached. An MIT order to buy becomes a limit order if and when the instrument trades at a specific or lower trigger price; an MIT order to sell becomes a limit order if and when the instrument trades at a specified or higher trigger price. On CME Globex, this order type is only available via CME Globex Trader, which is scheduled to be decommissioned by the end of 2007.

","related_topics":[]},{"id":294,"term":"Market-On-Close (MOC)","definition":"

An order submitted at any time within a trading session, but only executed on the close.

","related_topics":[]},{"id":295,"term":"Marketplace","definition":"

An organized venue, apart from CME, for the trade of securities, commodities or derivative instruments including, but not limited to, futures, options, options on futures or Security Futures Products.

","related_topics":[]},{"id":296,"term":"Mark-To-Market","definition":"

To debit or credit on a daily basis a margin account based on the close of that day's trading session. In this way, buyers and sellers are protected against the possibility of contract default.

","related_topics":[]},{"id":297,"term":"Matched Trade","definition":"

The execution of the buy and sell orders that together consummate a trade; consists of one or more contracts and occurs when the same price is specified by buy and sells orders, for a specified number of contracts.

","related_topics":[]},{"id":298,"term":"Maturity","definition":"

Period within which a futures contract can be settled by delivery of the actual commodity; the period between the first notice day and the last trading day of a commodity futures contract.

","related_topics":[]},{"id":299,"term":"Maximum Price Fluctuation","definition":"

The maximum amount the contract price can change up or down during one trading session, as stipulated by exchange rules. Consult CME Clearing contract specifications for specific price limit information.

","related_topics":[]},{"id":300,"term":"Member","definition":"

An individual owning or holding a membership in the Exchange.

","related_topics":[]},{"id":301,"term":"Member Firm","definition":"

An entity to which membership privileges on the Exchange have been conferred.

","related_topics":[]},{"id":302,"term":"Member Performance Bond","definition":"

The minimum equity that must be maintained for each contract in a member's account subsequent to deposit of the initial margin. Also see member rate.

","related_topics":[]},{"id":303,"term":"Membership Or Membership Interest","definition":"

The trading right associated with a Class B Share in any of the following classes: Class B-1 (CME Membership), Class B-2 (IMM Membership), Class B-3 (IOM Membership) and Class B-4 (GEM Membership). A membership or membership interest may only be purchased or sold with its associated Class B Share.

","related_topics":[]},{"id":304,"term":"Million British Thermal Units (Mmbtu)","definition":"

Approximately equal to a thousand cubic feet (Mcf) of natural gas. Also know as Dekatherm.

","related_topics":[]},{"id":305,"term":"Minimum Price Fluctuation","definition":"

The smallest increment of price movement possible in trading a given contract often referred to as a tick. The minimum unit by which the price of a commodity can fluctuate, as established by the Exchange.

","related_topics":[]},{"id":306,"term":"Minimum Quantity Order","definition":"

An order which is executed only if a certain minimum quantity of that order can be immediately matched.

","related_topics":[]},{"id":307,"term":"Money Supply","definition":"

The amount of money in the economy, consisting primarily of currency in circulation plus deposits in banks: M-1 U.S. money supply consisting of currency held by the public, traveler's checks, checking account funds, NOW and super- NOW accounts, automatic transfer service accounts, and balances in credit unions. M-2 U.S. money supply consisting M-1 plus savings and small time deposits (less than $100,000) at depository institutions, overnight repurchase agreements at commercial banks, and money market mutual fund accounts. M-3 U.S. money supply consisting of M-2 plus large time deposits ($100,000 or more) at depository institutions, repurchase agreements with maturities longer than one day at commercial banks, and institutional money market accounts.

","related_topics":[]},{"id":308,"term":"Motor Gasoline (Mogas)","definition":"

A complex mixture of relatively volatile hydrocarbons, with or without small quantities of additives, which have been blended to form a fuel suitable for use in spark-ignition engines.

","related_topics":[]},{"id":309,"term":"Motor Oil","definition":"

Refined lubricating oil, usually containing additives, used in internal combustion engines.

","related_topics":[]},{"id":310,"term":"Moving Average Chart","definition":"

A chart recording moving averages (three-day, ten-day, etc.) of market prices.

","related_topics":[]},{"id":311,"term":"Moving Averages","definition":"

A statistical price analysis method of recognizing different price trends. A moving average is calculated by adding the prices for a predetermined number of days and then dividing by the number of days.

","related_topics":[]},{"id":312,"term":"Naked Futures Position","definition":"

An open futures position that is not covered by an offsetting futures position or by an options contract against which it can be spread.

","related_topics":[]},{"id":313,"term":"Naked Options Position","definition":"

An open options contract that is not covered by an offsetting position in the underlying futures commodity or by another options contract against which it can be spread.

","related_topics":[]},{"id":314,"term":"National Futures Association (NFA)","definition":"

The National Futures Association. NFA is an independent self-regulatory organization for the U.S. futures industry with no ties to any specific marketplace.

","related_topics":[]},{"id":315,"term":"National Introducing Brokers Association","definition":"

Established in 1991—the National Introducing Brokers Association is one of the foremost, nationally recognized organizations representing professionals in the futures and options industry.

","related_topics":[]},{"id":316,"term":"Natural Gas","definition":"

A naturally occurring mixture of hydrocarbon and non-hydrocarbon gases found in porous rock formations. Its principal component is methane.

","related_topics":[]},{"id":317,"term":"Natural Gas Liquids (NGL)","definition":"

A general term for all liquid products separated from natural gas in a gas processing plant. NGLs include propane, butane, ethane, and natural gasoline.

","related_topics":[]},{"id":318,"term":"Nearby","definition":"

The nearest active trading month of a futures or options on futures contract. Also referred to as the lead month.

","related_topics":[]},{"id":319,"term":"Near-The-Money","definition":"

The relationship between an option’s strike price and the value of the underlying instrument, where the strike price is near the underlying instrument’s current market price.

","related_topics":[]},{"id":320,"term":"Negative Yield Curve","definition":"

A chart in which the yield level is plot on the vertical axis and the term to maturity of debt instruments of similar creditworthiness is plotted on the horizontal axis. The yield curve is positive when long-term rates are higher than short-term rates. However, the yield curve is referred to as negative or inverted as short term rates begin to rise above longer term ones.

","related_topics":[]},{"id":321,"term":"Net Change","definition":"

The amount of increase or decrease from the previous trading period's settlement price.

","related_topics":[]},{"id":322,"term":"Net Margining","definition":"

A method by which a clearing firm's margins are based on the net position, e.g. the remaining position after netting long positions in a contract against the short positions in the customer origin. For example, if a firm had only two accounts for two customers in its customer segregated origin and one of those accounts had three open long positions and the other had two open short positions, the firm's margin would be based on the one net long position.

","related_topics":[]},{"id":323,"term":"Net Position","definition":"

The difference between an individual or firm's open long contracts and open short contracts in any one commodity.

","related_topics":[]},{"id":324,"term":"Nominal Price","definition":"

The declared price for a futures month sometimes used in place of a closing price when no recent trading has taken place in that particular delivery month; usually an average of the bid and asked prices.

","related_topics":[]},{"id":325,"term":"Notice Day","definition":"

The day the buyer with the oldest long position is matched with the seller's intent and both parties are notified of delivery obligations.

","related_topics":[]},{"id":326,"term":"Notional Value","definition":"

The underlying value (face value), normally expressed in U.S. dollars, of the financial instrument or commodity specified in a futures or options on futures contract.

","related_topics":[]},{"id":327,"term":"Offer (Ask Or Sell)","definition":"

An offer to sell a specific quantity of a commodity at a stated price. (Opposite of a bid.)

","related_topics":[]},{"id":328,"term":"Off-Peak (Energy)","definition":"

The load for the remaining hours that are not on-peak (See on-peak).

","related_topics":[]},{"id":329,"term":"Offset","definition":"

To remove an open position from an account by establishing a position equal to or opposite the existing position, making or taking delivery, or exercising an option (i.e., selling if one has bought, or buying if one has sold.

","related_topics":[]},{"id":330,"term":"Offsetting A Hedge","definition":"

For a short hedger, to buy back futures and sell a commodity. For a long hedger, to sell back futures and buy a commodity. Also called lifting a hedge.

","related_topics":[]},{"id":331,"term":"Omnibus Account","definition":"

An account of one Futures Commission Merchant (FCM), the originating FCM, which resides on the books of another FCM (the carrying FCM), in which the transactions of two or more persons are combined and carried in the name of the originating FCM rather than in the name of the individual customers.

","related_topics":[]},{"id":332,"term":"One-Cancels-Other (OCO) Order ","definition":"

A combination of two orders, in which the execution of either one automatically cancels the other.

","related_topics":[]},{"id":333,"term":"Open Interest","definition":"

The total number of futures contracts long or short in a delivery month or market that has been entered into and not yet offset or fulfilled by delivery Also known as Open Contracts or Open Commitments. Each open transaction has a buyer and a seller, but for calculation of open interest, only one side of the contract is counted.

","related_topics":[]},{"id":334,"term":"Open Market Operation","definition":"

The buying and selling of government securities Treasury bills, notes, and bonds by the Federal Reserve.

","related_topics":[]},{"id":335,"term":"Open Order","definition":"

An order that remains good until filled, canceled, or eliminated. See Good-'till-canceled

","related_topics":[]},{"id":336,"term":"Open Order (Good-Till-Cancelled)","definition":"

An order which remains in force until cancelled. Without such designation, all unfilled orders are cancelled at the end of the Regular Trading Hours Session.

","related_topics":[]},{"id":337,"term":"Open Outcry","definition":"

A method of public auction for making bids and offers in the trading pits of futures exchanges.

","related_topics":[]},{"id":338,"term":"Open Position","definition":"

A long or short position that has not been liquidated.

","related_topics":[]},{"id":339,"term":"Opening","definition":"

The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the opening."

","related_topics":[]},{"id":340,"term":"Opening Only Order","definition":"

An order that is to be executed during the time period designated by the Exchange as the Regular Trading Hours session opening range time period. Any remaining unfilled quantity not executed during the time period designated as the opening range will be deemed cancelled.

","related_topics":[]},{"id":341,"term":"Opening Price","definition":"

The price at which the first transaction was completed.

","related_topics":[]},{"id":342,"term":"Opening Range","definition":"

The price range recorded during the period designated by the exchange as the official opening.

","related_topics":[]},{"id":343,"term":"option","definition":"

A contract that gives the bearer the right, but not the obligation, to buy or sell a futures contract at a specified price within a specified time period.

","related_topics":[]},{"id":344,"term":"Option Buyer","definition":"

One who purchases an option and pays a premium.

","related_topics":[]},{"id":345,"term":"Option Contract","definition":"

A contract that gives the bearer the right, but not the obligation, to be long or short a futures contract at a specified price within a specified time period. The specified price is called the strike price. The futures contract that the long may establish by exercising the option is referred to as the underlying futures contract.

","related_topics":[]},{"id":346,"term":"Option Premium","definition":"

The price a buyer pays for an option. Premiums are arrived at through open competition between buyers and sellers on the trading floor of the exchange.

","related_topics":[]},{"id":347,"term":"Option Seller (Writer)","definition":"

One who sells an option and receives a premium.

","related_topics":[]},{"id":348,"term":"Options Series","definition":"

All options of the same class which share a common strike price.

","related_topics":[]},{"id":349,"term":"Order","definition":"

A request by a trader to buy or sell a given futures instrument with specified conditions such as price, quantity, type of order.

","related_topics":[]},{"id":350,"term":"Order To Pay","definition":"

A payment guarantee provided by a buyer's (or in some cases, the seller's) paying bank to CME's agent bank to guarantee payment on a currency delivery transaction. Orders to Pay are due by 1:00 p.m. on the day following the last day of trading in currencies.

","related_topics":[]},{"id":351,"term":"Order Types","definition":"

(Note that not all order types are eligible for execution in a trading pit on Globex and through open outcry. Additionally, order types eligible for both venues may have different meanings depending on whether the order is to be executed in a trading pit via open outcry or through Globex.)

","related_topics":[]},{"id":352,"term":"Order-Cancels-Order (OCO)","definition":"

An order qualifer that consists of two linked orders, typically (but not always) a Limit order and a Stop order, that both work until one order is filled, at which time the other order is canceled.

","related_topics":[]},{"id":353,"term":"Out-Of-The-Money","definition":"

A term used to describe an option that has no intrinsic value. A call option with a strike price higher (or a put with a strike price lower) than the current market value of the underlying futures commodity. Since it depends on current prices, an option can vary from in the money to out of the money with market price movements during the life of the options contract.

","related_topics":[]},{"id":354,"term":"Over The Counter (OTC) Market","definition":"

A market in which custom-tailored contracts such as stocks and foreign currencies are bought and sold between counterparties and are not exchange traded.

","related_topics":[]},{"id":355,"term":"Overbought","definition":"

A technical opinion of a market which has risen too high in relation to underlying fundamental factors.

","related_topics":[]},{"id":356,"term":"Oversold","definition":"

A technical opinion of a market which has fallen too low in relation to underlying fundamental factors.

","related_topics":[]},{"id":357,"term":"over-the-counter-derivative","definition":"

Futures and options contracts with terms that do not necessarily adhere to those of a standardized futures contract.

","related_topics":[]},{"id":358,"term":"over-the-counter-trading","definition":"

Trades that take place outside of a formal futures exchange.

","related_topics":[]},{"id":359,"term":"Packs","definition":"

The simultaneous purchase or sale of an equally weighted, consecutive series of four futures contracts, quoted on an average net change basis from the previous day's settlement price. Packs provide a readily available, widely accepted method for executing multiple futures contracts with a single transaction.

","related_topics":[]},{"id":360,"term":"Performance Bond","definition":"

The minimum amount of funds that must be deposited as a performance bond by a customer with his broker, by a broker with a clearing member or by a clearing member with the Clearing House.

","related_topics":[]},{"id":361,"term":"Performance Bond Call","definition":"

A request from a brokerage firm to a customer to bring performance bond deposits up to minimum levels or a request by CME Clearing to a clearing firm to bring clearing performance bonds back to levels required by the Exchange Rules. Most exchanges refer to this as a "margin call."

","related_topics":[]},{"id":362,"term":"Performance Bond To Clearing House","definition":"

The minimum dollar deposit required by CME Clearing from its clearing members in accordance with their positions. This is one of the financial safeguards that help to ensure that clearing members (usually companies or corporations) perform on their customers' open futures and options contracts.

","related_topics":[]},{"id":363,"term":"Petroleum Administration For Defense Districts (PADD)","definition":"

The United States is divided into five distinct marketing regions in which prices might differ due to variations in the supply or demand.

","related_topics":[]},{"id":364,"term":"physical commodity","definition":"

A tangible commodity—such as corn, oil, gold or beef—upon which futures prices are set.

","related_topics":[]},{"id":365,"term":"Pit","definition":"

The area on the trading floor of where trading in a specific futures or options contracts is conducted by open outcry.

","related_topics":[]},{"id":366,"term":"Plain Vanilla Swap","definition":"

An individual simultaneously buys and sells the same amount of the same currency with the same counterparty, with the two legs of the transaction maturing on different dates and trading at different exchange rates.

","related_topics":[]},{"id":367,"term":"Point And Figure Chart","definition":"

A graph of prices charted where Xs denote price increases and Os represent price decreases. A method used by technical analyst to help anticipate price movement.

","related_topics":[]},{"id":368,"term":"Position","definition":"

An obligation to perform in the futures or options market. A long position is an obligation to buy at a specified date in the future. A short position is an obligation to sell at a specified date in the future. However a vast majority of all open positions are simply offset prior to expiration. See also call option and put option.

","related_topics":[]},{"id":369,"term":"Position Adjustment","definition":"

The position adjustment may increase or decrease a position in a given contract and origin by equal quantities long and short to correct discrepancies in position reporting. The adjustment is made to reconcile out of balance trade conditions between clearing records and transaction records.

","related_topics":[]},{"id":370,"term":"Position Limit","definition":"

The maximum number of speculative futures contracts one can hold as determined by the Commodity Futures Trading Commission and/or the exchange upon which the contract is traded. Also referred to as trading limits.

","related_topics":[]},{"id":371,"term":"Position Trader","definition":"

A trader who takes a position in anticipation of a longer term trend in the market. Unlike a day trader a position trader hopes to maintain the position over a longer period of time.

","related_topics":[]},{"id":372,"term":"Premium","definition":"

(1) The price paid by the purchaser of an option to the grantor (seller);(2) The amount by which a cash commodity price trades over a futures price or another cash commodity price.

","related_topics":[]},{"id":373,"term":"price discovery","definition":"

The process of determining the price for a commodity or financial instrument based on the supply and demand for it in the underlying market.

","related_topics":[]},{"id":374,"term":"Price Gap","definition":"

A chart pattern of the price movement of a commodity when the low price of one bar on a Bar Chart is higher than the high of the preceding bar (or inversely, the high is lower than the low of the preceding bar); depicting a price or price range where no trades take place. The price patterns are used by technical analysts to try to recognize changes in a price trend.

","related_topics":[]},{"id":375,"term":"Price Limit","definition":"

The maximum daily price fluctuations on a futures contract during any one session, as determined by the Exchange. (Also known as limit).

","related_topics":[]},{"id":376,"term":"Price Transparency","definition":"

Market prices that are universally available in real time, where all market participants have equal access to the same markets and prices at the same time. This facilitates a fair and anonymous trading environment where the best bid and best offer have priority. A level playing field.

","related_topics":[]},{"id":377,"term":"Primary Dealer","definition":"

A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria. Among the criteria are capital requirements and meaningful participation in the Treasury auctions.

","related_topics":[]},{"id":378,"term":"Primary Market","definition":"

(1) For producers, their major purchaser of commodities; (2) in commercial marketing channels, an important center at which spot commodities are concentrated for shipment to terminal markets; and (3) to processors, the market that is the major supplier of their commodity needs.

","related_topics":[]},{"id":379,"term":"Primary Stocks (Energy)","definition":"

Stocks of crude oil or refined products held in storage at leases, refineries, natural gas processing plants, pipelines, tankfarms, and bulk terminals that can store at least 50,000 barrels of refined products.

","related_topics":[]},{"id":380,"term":"Prime Rate","definition":"

Interest rate charged by institutional banks to their larger most creditworthy customers.

","related_topics":[]},{"id":381,"term":"Purchase And Sales (P&S) Statement","definition":"

A statement issued by an FCM to a customer when his or her futures or options position has changed, showing the number of contracts involved, the prices at which the contracts were bought or sold, the gross profit or loss, the commission charges, and the net profit or loss on the transactions.

","related_topics":[]},{"id":382,"term":"Purchase Date","definition":"

The date on which a long position, used to assign agricultural deliveries, is established on a clearing firm's books.

","related_topics":[]},{"id":383,"term":"Pure Hedger","definition":"

A person who places a hedge to lock in a price for a commodity. He or she offsets the hedge and transacts in the cash market simultaneously.

","related_topics":[]},{"id":384,"term":"Put Option","definition":"

A contract that provides the purchaser the right (but not the obligation) to sell a futures contract at an agreed price (the strike price) at any time during the life of the option. A put option is purchased in the expectation of a decline in price.

","related_topics":[]},{"id":385,"term":"Qualifier","definition":"

The time for which the order is valid FAK, Session, FOK, Day, GTC, GTD. Validity field options. See CME Globex Order Duration Qualifiers

","related_topics":[]},{"id":386,"term":"Quantity","definition":"

Number of units or lots of a futures contract. Sometimes also called size.

","related_topics":[]},{"id":387,"term":"Quote","definition":"

(1) The actual price, bid, or asked price of either cash commodities or futures contracts; (2) An indication of current bids and offers in the market on a particular instrument or spread.

","related_topics":[]},{"id":388,"term":"Rally","definition":"

A market reaction resulting in an upward movement of prices. The opposite of a decline.

","related_topics":[]},{"id":389,"term":"Range","definition":"

The difference between the highest and lowest prices recorded during a given time period, trend, or trading session.

","related_topics":[]},{"id":390,"term":"Ratio Spread","definition":"

This strategy, which applies to both puts and calls, involves buying or selling options at one strike price in greater number than those bought or sold at another strike price.

","related_topics":[]},{"id":391,"term":"Reciprocal Of European Terms","definition":"

One method of quoting exchange rates, which measured the U.S. dollar value of one foreign currency unit, i.e., U.S. dollars per foreign units. See European Terms.

","related_topics":[]},{"id":392,"term":"Refinery","definition":"

A company that acts as a wholesaler of gasoline, heating oil, or other products which operates its own refinery; may also retail and buy additional supplies to supplement its own refining output.

","related_topics":[]},{"id":393,"term":"Regular Trading Hours (RTH)","definition":"

Those hours designated for open outcry trading of the relevant product as determined from time to time.

","related_topics":[]},{"id":394,"term":"Reporting Levels","definition":"

Sizes of positions set by the exchanges and/or the CFTC at or above which commodity traders or brokers who carry these accounts must make daily reports about the size of the position by commodity, by delivery month, and whether the position is controlled by a commercial or non-commercial trader.

","related_topics":[]},{"id":395,"term":"Repurchase Agreement Or Repo","definition":"

An agreement between a seller and a buyer, usually in U.S. government securities, in which the seller agrees to buy back the security at a later date.

","related_topics":[]},{"id":396,"term":"Request For Quote (RFQ)","definition":"

An electronic message disseminated on Globex for the purpose of soliciting bids or offers for specific contract(s) or combinations of contracts.

","related_topics":[]},{"id":397,"term":"Reserve Requirements","definition":"

The minimum amount of cash and liquid assets as a percentage of demand deposits and time deposits that member banks of the Federal Reserve are required to maintain.

","related_topics":[]},{"id":398,"term":"Resistance Line","definition":"

The place on a chart where the selling of futures contracts is sufficient to halt a rise in prices.

","related_topics":[]},{"id":399,"term":"Resting Order","definition":"

An order away from the market, waiting to be executed.

","related_topics":[]},{"id":400,"term":"Retender","definition":"

An act that an assigned long may perform to avoid obligation to receive delivery of live cattle. To avoid obligation, the assigned long must establish a short position on the business day following assignment and pay a retender fee.

","related_topics":[]},{"id":401,"term":"Retracement","definition":"

A price move in the opposite direction of a recent trend.

","related_topics":[]},{"id":402,"term":"Reverse Crush Spread","definition":"

The sale of soybean futures and the simultaneous purchase of soybean oil and meal futures.

","related_topics":[]},{"id":403,"term":"Risk","definition":"

(1)The possibility of loss. (2) The dollar difference between the current price and the price at which the liquidation of open positions would occur. (3) The portion of the performance bond requirement associated with the likely worst case change in value from one day to the next.

","related_topics":[]},{"id":404,"term":"risk management","definition":"

Identifying, analyzing and either mitigating or absorbing the price risk in investing or business planning.

","related_topics":[]},{"id":405,"term":"Rollover","definition":"

As pertaining to an existing futures position, exiting your current delivery month and entering the next expiring month. For example, if long a December contract, offsetting that position (by selling) and entering a postion in the next expiration (by buying).

","related_topics":[]},{"id":406,"term":"Round-Turn","definition":"

A completed transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase. A round turn counts both the buy and the sell as one event. In a typical exchange volume measurement, a one-contract trade would be counted as one round turn (i.e., single event, same trade, different customers). From the customer's perspective, a round turn represents two filled orders from his or her brokerage firm - one to take a position and one to offset that position (i.e., same customer, different trades).

","related_topics":[]},{"id":407,"term":"Rules","definition":"

The Certificate of Incorporation, By-Laws, rules, interpretations, orders, resolutions, advisories, notices, manuals and similar directives of the Exchange, and all amendments thereto. The trading and clearing of all Exchange futures, options on futures, cleared-only and spot contracts shall be subject to the rules.

","related_topics":[]},{"id":408,"term":"Runaway Gap","definition":"

A gap in prices after a trend has begun that signals the halfway point of a market move.

","related_topics":[]},{"id":409,"term":"Scalp","definition":"

To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within secconds.

","related_topics":[]},{"id":410,"term":"Scalper","definition":"

A speculator on an exchange floor who trades in and out of the market on very small price fluctuations. The scalper, trading in this manner, provides market liquidity but seldom carries a position overnight.

","related_topics":[]},{"id":411,"term":"Secondary Market","definition":"

Market where previously issued securities are bought and sold.

","related_topics":[]},{"id":412,"term":"Security Futures Products","definition":"

A contract based on securities products as such term is defined by 1a(32) of the Commodity Exchange Act. Security Futures Products (“SFPs”) include futures contracts based upon a single security (or “stock futures”); futures contracts based upon a narrow-based security index; and, options on any security futures as those terms are defined in Sections 1a(25) and 1a(31) of the Commodity Exchange Act.

","related_topics":[]},{"id":413,"term":"See Fx","definition":"

Foreign Exchange Market (FX)

","related_topics":[]},{"id":414,"term":"See Intercommodity Spread","definition":"

Interruptible Service (Energy)

","related_topics":[]},{"id":415,"term":"Segregation Type","definition":"

The account which holds open position for customer (segregated), for the house (non-segregated), and for customer non-segregated origins.

","related_topics":[]},{"id":416,"term":"self-regulatory organization (SRO)","definition":"

Futures exchanges and regulatory entities that set rules and regulations and have internal functions that perform complex checks and balances to adhere to the principles they set.

","related_topics":[]},{"id":417,"term":"Seller","definition":"

A person who takes a short futures position or grants (sells) a commodity option. An option seller is also called a marker, grantor, or granter, or writer.

","related_topics":[]},{"id":418,"term":"Seller's Market","definition":"

A condition of the market in which there is a scarcity of goods available and hence sellers can obtain better conditions of sale or higher prices. Opposite of buyer's market.

","related_topics":[]},{"id":419,"term":"Selling Climax","definition":"

An extraordinarily high volume occurring suddenly in a downtrend, signaling the end of the trend.

","related_topics":[]},{"id":420,"term":"Selling Hedge Or Short Hedge","definition":"

Selling futures contracts to protect against possible declining prices of commodities that will be sold in the future. At the time the cash commodities are sold, the open futures position is closed by purchasing an equal number and type of futures contracts as those that were initially sold. The practice of offsetting the price risk inherent in any cash market position by taking an equal but opposite position in the futures market. Hedgers use the futures markets to protect their business from adverse price changes.

","related_topics":[]},{"id":421,"term":"Serial Options","definition":"

Options for months for which there are no futures contracts. The underlying futures contract for a serial option month would be the next nearby futures contract.

","related_topics":[]},{"id":422,"term":"settlement","definition":"

The delivery of cash or commodities in exchange for payment, as specified by the terms of the underlying contract.

","related_topics":[]},{"id":423,"term":"Settlement Price","definition":"

The official daily closing price of futures and options on futures contracts, as determined in accordance with Rule 813, used by the Clearing House for marking all open positions at the close of the daily settlement cycle.

","related_topics":[]},{"id":424,"term":"Settlement Variation","definition":"

The change in dollar amount calculated by the Clearing House for clearing members figured to the daily settlement price on the basis of their positions.

","related_topics":[]},{"id":425,"term":"Shares","definition":"

A Seek Limit order has a price limit automatically assigned (up to the fifth best price level) to the order when sent and seeks to fill the entire quantity. Available only on CME Globex Trader.

","related_topics":[]},{"id":426,"term":"Short","definition":"

An open futures or options position where you have been a net seller. The opposite of being long.

","related_topics":[]},{"id":427,"term":"Short Hedge","definition":"

The sale of a futures contract in anticipation of a later cash market sale. Used to eliminate or minimize the possible decline in value of ownership of an approximately equal amount of the cash financial instrument or physical commodity. See hedge.

","related_topics":[]},{"id":428,"term":"Short The Basis","definition":"

Position where a hedger is short the cash market and long the futures market.

","related_topics":[]},{"id":429,"term":"Short-Term Interest Rates","definition":"

Interest rates on loan contracts--or debt instruments such as Treasury bills, bank certificates of deposit, or commercial paper--having maturities of less than one year. Often called money market rates.

","related_topics":[]},{"id":430,"term":"Side","definition":"

Each buy and sell represents ½ of a trade. Every contract that trades has two sides - the buy side and the sell side. Taken together, these two sides equal one unit of volume known as a round turn.

","related_topics":[]},{"id":431,"term":"Side-By-Side Trading","definition":"

Where a single futures contract trades in two locations at the same time. Usually on a trading floor via open outcry as well as on an electronic trading platform.

","related_topics":[]},{"id":432,"term":"Single-Stock Futures (SSF)","definition":"

OneChicago, LLC is a joint venture created by Chicago Mercantile Exchange® (CME), Chicago Board of Options Exchange® (CBOE), and Chicago Board of Trade® (CBOT), to trade single stock futures (SSF) and narrow-based stock indexes.

","related_topics":[]},{"id":433,"term":"Span® Performance Bond System","definition":"

The Standard Portfolio Analysis of Risk (SPAN) Performance Bond System). A program that determines portfolio performance bond requirements for futures, options, cash, and other instruments. SPAN is a portfolio based approach to risk management and performance bond calculations. CME Clearing uses SPAN to calculate overnight margin for it’s clearing firms and clearing firms use SPAN to margin their customers.

","related_topics":[]},{"id":434,"term":"Specific Gravity","definition":"

The ratio of the density of a substance at 60 degrees Farenheit to the density of water at the same temperature.

","related_topics":[]},{"id":435,"term":"Specifications","definition":"

1) Contract terms specified by the Exchange. 2) Term referring to the properties of a given crude oil or refined petroleum product, which are "specified" since they often vary widely even within the same grade of product. In the normal process of negotiation, seller will guarantee buyer that the product or crude to be sold will meet certain specified limits. Generally, the major properties of oil that are guaranteed are API gravity, sulfur, pour point, viscosity, and BS&W.

","related_topics":[]},{"id":436,"term":"Speculative Position Limit","definition":"

The maximum position, either net long or net short, in one commodity futures or options, or in all futures or options of one commodity combined, which may be held or controlled by an entity without a hedge exemption as prescribed by an exchange or the Commodity Futures Trading Commission

","related_topics":[]},{"id":437,"term":"Speculator","definition":"

An individual who accepts market risk in an attempt to profit from buying and selling futures and/or options contracts by correctly anticipating future price movements.

","related_topics":[]},{"id":438,"term":"Spot","definition":"

The actual physical commodity as distinguished from the futures contract that is based on the physical commodity. Also referred to as “cash commodity.”

","related_topics":[]},{"id":439,"term":"Spot Market","definition":"

The market in which cash transactions for the physical commodity occurs -- (cattle, currencies, stocks, etc.) are bought and sold for cash and delivered immediately.

","related_topics":[]},{"id":440,"term":"Spot Month","definition":"

The contract month of a futures contract which is also the current calendar month.

","related_topics":[]},{"id":441,"term":"Spot Price","definition":"

The price at which a physical commodity for immediate delivery is selling at a given time and place. The cash price.

","related_topics":[]},{"id":442,"term":"Spread","definition":"

The price difference between two contracts. Holding a long and a short position in two or more related futures or options on futures contracts, with the objective of profiting from a change in the price relationship.

","related_topics":[]},{"id":443,"term":"Spread Order Or Combination Order","definition":"

A combination of buy and/or sell orders for the same account, except as provided by Rule 527, at the market, at a fixed differential or by some other appropriate pricing convention. Also referred to as a combination order.

","related_topics":[]},{"id":444,"term":"Standard Deviation","definition":"

A representation of the risk associated with a financial instrument (stocks, bonds, etc.) or a portfolio of investments. The larger the standard deviation in a given period, the greater implied risk. Risk is an important factor in determining how to efficiently manage investments and understanding the standard deviation gives investors a statistical basis for their decisions.

","related_topics":[]},{"id":445,"term":"Steer/Corn Ratio","definition":"

The relationship of cattle prices to feeding costs. It is measured by dividing the price of cattle ($/hundredweight) by the price of corn ($/bushel). When corn prices are high relative to cattle prices, fewer units of corn equal the dollar value of 100 pounds of cattle. Conversely, when corn prices are low in relation to cattle prices, more units of corn are required to equal the value of 100 pounds of beef. A ratio used to express the relationship of feeding costs to the dollar value of livestock.

","related_topics":[]},{"id":446,"term":"Stock Index","definition":"

A statistic reflecting the composite value of a selected group of stocks. How a particular stock index tracks the overall market depends on the sampling of stocks, the weighing of individual stocks, and the method of averaging used to establish the index. Many indexes are used to benchmark the performance of portfolios such as mutual funds.

","related_topics":[]},{"id":447,"term":"Stop Close Only","definition":"

A stop order that is executed only if the stop price is triggered during the closing range of the trading session.

","related_topics":[]},{"id":448,"term":"Stop Limit Order","definition":"

A stop order which becomes executable at its limit price or better, when and if the market: (1) in the case of a Buy Stop Limit order, trades at or above, or is bid at or above the Stop Price; or (2) in the case of a Sell Stop Limit order, trades at or below, or is offered at or below the Stop Price.

","related_topics":[]},{"id":449,"term":"Stop Order","definition":"

An order that becomes a market order when a particular price level is reached. A sell stop is placed below the market; a buy stop is placed above the market. Sometimes referred to as Stop Loss Order.

","related_topics":[]},{"id":450,"term":"Stop With Protection","definition":"

Electronic stop orders at CME Group are implemented using a “Stop with Protection” approach. Unlike a conventional Stop order, where customers are at risk of having their orders filled at extreme prices, Stop with Protection orders are filled within a predefined range of prices (the protected range). A Stop with Protection order is triggered when the designated price is traded on the market. The order then enters the order book as a Limit order with the limit price equal to the trigger price, plus or minus the pre-defined protected range. The protected range is typically the trigger price, plus or minus 50 percent of the No Bust range for that product. The order is executed at all price levels between the trigger and limit price. If the order is not completely filled, the remaining quantity rests in the market at the limit price. A buy Stop order must have a trigger price greater than the last traded price for the instrument. A sell Stop order must have a trigger price lower than the last traded price.

","related_topics":[]},{"id":451,"term":"Straddle","definition":"

The purchase or sale of an equal number of puts and calls, with the same strike price and expiration dates. A long straddle is a straddle in which a long position is taken in both a put and a call option. A short straddle is a straddle in which a short position is taken in both a put and a call option.

","related_topics":[]},{"id":452,"term":"Strangle","definition":"

The purchase of a put and a call, in which the options have the same expiration and the put strike is lower than the call strike, called a long strangle. Also the sale of a put and a call, in which the options have the same expiration and the put strike is lower than the call strike, called a short strangle.

","related_topics":[]},{"id":453,"term":"Strike Price","definition":"

","related_topics":[]},{"id":454,"term":"Striking Price","definition":"

","related_topics":[]},{"id":455,"term":"Strip","definition":"

The simultaneous purchase (or sale) of futures positions in consecutive months. The average of the prices for the futures contracts bought (or sold) is the price level of the hedge. A six-month strip, for example, consists of an equal number of futures contracts for each of six consecutive contract months. Also known as a calendar strip.

","related_topics":[]},{"id":456,"term":"Supply","definition":"

The quantity of a commodity that producers are willing to provide to the market at a given price.

","related_topics":[]},{"id":457,"term":"Support","definition":"

The place on a chart where the buying of futures contracts is sufficient to halt a price decline.

","related_topics":[]},{"id":458,"term":"Swap (OTC)","definition":"

A custom-tailored, individually negotiated transaction designed to manage financial risk, usually over a period of one to 12 years. Swaps can be conducted directly by two counterparties, or through a third party such as a bank or brokerage house. The writer of the swap, such as a bank or brokerage house, may elect to assume the risk itself, or manage its own market exposure on an exchange. Swap transactions include interest rate swaps, currency swaps, and price swaps for commodities, including energy and metals. In a typical commodity or price swap, parties exchange payments based on changes in the price of a commodity or a market index, while fixing the price they effectively pay for the physical commodity. The transaction enables each party to manage exposure to commodity prices or index values. Settlements are usually made in cash.

","related_topics":[]},{"id":459,"term":"Swaps","definition":"

Simultaneous purchase and sale of currencies or interest rate products in spot and forward market transactions.

","related_topics":[]},{"id":460,"term":"Synthetic Call Option","definition":"

A combination of a long futures contract and a long put, called a synthetic long call. Also, a combination of a short futures contract and a short put, called a synthetic short call.

","related_topics":[]},{"id":461,"term":"Synthetic Futures","definition":"

A combination of a put and a call with the same strike price, in which both are bullish, called synthetic long futures. Also, a combination of a put and a call with the same strike price, in which both are bearish, called synthetic short futures.

","related_topics":[]},{"id":462,"term":"Synthetic Option","definition":"

A combination of a futures contract and an option, in which one is bullish and one is bearish.

","related_topics":[]},{"id":463,"term":"Synthetic Put Option","definition":"

A combination of a short futures contract and a long call, called a synthetic long put. Also, a combination of a long futures contract and a short call, called a synthetic short put.

","related_topics":[]},{"id":464,"term":"Synthetic Spot","definition":"

Futures price information that is consistent with spot market convention where positive or negative forward points are added to the futures price to produce an equivalent spot price.

","related_topics":[]},{"id":465,"term":"Target Price","definition":"

An expected selling or buying price. For long and short hedges with futures: futures price + expected basis. For puts: futures price - premium + expected basis. For calls: futures price + premium + expected basis.

","related_topics":[]},{"id":466,"term":"Tas","definition":"

Trade at Settlement. A TAS is an order type that specifies the day's settlement price as the order price. This column represents the number of TAS transactions for the given date.

","related_topics":[]},{"id":467,"term":"Technical Analysis","definition":"

An approach to forecasting commodity prices which examines patterns of price change, rates of change, and changes in volume of trading and open interest, without regard to underlying fundamental market factors.

","related_topics":[]},{"id":468,"term":"Telestat","definition":"

CME® TeleSTAT is an automated phone system that provides individual traders the ability to cancel and status CME Globex® orders. After entering a unique ID and PIN, users quickly navigate through the menu prompts to expedite their requests

","related_topics":[]},{"id":469,"term":"Theoretical Value","definition":"

An option's value generated by a mathematical model given certain prior assumptions about the term of the option, the characteristics of the underlying futures contract, and prevailing interest rates.

","related_topics":[]},{"id":470,"term":"Therm","definition":"

100,000 British thermal units. A dekatherm is 1 million Btu's.

","related_topics":[]},{"id":471,"term":"Theta","definition":"

The measure of the change in an option's premium given a change in the option's time until expiration. Equal to the change in the option's premium divided by the change in time to expiration.

","related_topics":[]},{"id":472,"term":"Tick","definition":"

The minimum fluctuation in price allowed for a futures or options contract during a trading session as specified by the contract terms in CME Rulebook.

","related_topics":[]},{"id":473,"term":"Ticker","definition":"

Summarized display of almost instantaneous information on instruments of an exchange. Provides information on performed trades by displaying the instrument and the last trade price in scrolling mode.

","related_topics":[]},{"id":474,"term":"Time","definition":"

Except as otherwise specifically provided, any reference to time shall mean local Chicago time.

","related_topics":[]},{"id":475,"term":"Time And Sales Data","definition":"

Data that provides price and time information of every transaction throughout the day.

","related_topics":[]},{"id":476,"term":"Time Decay","definition":"

Decline in the theoretical value of an option position based solely on the passage of time.

","related_topics":[]},{"id":477,"term":"Time Spread","definition":"

The selling of a nearby option and buying of a more deferred option with the same strike price. Also known as a Calendar or Horizontal Spread.

","related_topics":[]},{"id":478,"term":"Time Value","definition":"

The amount by which an option's premium exceeds its intrinsic value. Usually relative to the time remaining before the option expires.

","related_topics":[]},{"id":479,"term":"Trade","definition":"

The term "trade" shall mean any purchase or sale of any commodity futures or options contract made on the Exchange.

","related_topics":[]},{"id":480,"term":"Trade Balance","definition":"

The difference between a nation's imports and exports of merchandise.

","related_topics":[]},{"id":481,"term":"Trade Date","definition":"

The date on which a trade was executed.

","related_topics":[]},{"id":482,"term":"Trade Price","definition":"

The price at which a trade was executed on the original trade date.

","related_topics":[]},{"id":483,"term":"Trader","definition":"

(1) A person who takes positions in the futures market, usually without the intention of making or taking delivery; (2) A member of the exchange who buys and sells futures and options through the floor of the exchange. See "day trader", "floor broker", "position trader," and "scalper".

","related_topics":[]},{"id":484,"term":"Trading Day","definition":"

A trading day shall mean the hours of trading as determined by the board for each contract starting with the opening of trading and ending with the close of trading for such contract.

","related_topics":[]},{"id":485,"term":"Trading Limit","definition":"

","related_topics":[]},{"id":486,"term":"Trading Session","definition":"

A trading session will mean either the pit trading session (the hours designated for open outcry trading for a product) and/or the Globex session (the hours on a particular trading day when a product can be traded on Globex).

","related_topics":[]},{"id":487,"term":"transparency","definition":"

The amount of access a market openly offers about its activities and financial information.

","related_topics":[]},{"id":488,"term":"Treasury Bill","definition":"

A Treasury bill is a short-term U.S. government obligation with an original maturity of one year or less. Unlike a bond or note, a bill does not pay a semi-annual, fixed rate coupon. A bill is typically issued at a price below its par value and is therefore a discounted instrument. The level of the discount depends on the level of prevailing interest rates. In general, the higher short-term interest rates are, the greater the discount. The return to an investor in bills is simply the difference between the issue price and par value.

","related_topics":[]},{"id":489,"term":"Treasury Bond","definition":"

Government-debt security with a coupon and original maturity of more than 10 years. Interest is paid semiannually.

","related_topics":[]},{"id":490,"term":"Treasury Note","definition":"

Government-debt security with a coupon and original maturity of one to 10 years.

","related_topics":[]},{"id":491,"term":"Trend","definition":"

The general direction of the market.

","related_topics":[]},{"id":492,"term":"Underlying","definition":"

The stock, commodity, futures contract, or cash index against which a futures or options contract is valued.

","related_topics":[]},{"id":493,"term":"Underlying Futures Contract","definition":"

The futures contract that may be purchased (in the case of a call) or sold (in the case of a put upon the exercise of the option.

","related_topics":[]},{"id":494,"term":"Uptrend","definition":"

The ability to choose the legs of a spread if the spread is not identified by CME already.

","related_topics":[]},{"id":495,"term":"User Defined Spreads","definition":"

The ability to choose the legs of a spread if the spread is not identified by CME already.

","related_topics":[]},{"id":496,"term":"Variation","definition":"

Payment made on a daily or intraday basis by a clearing member to the clearinghouse to cover losses created by adverse price movement in positions carried by the clearing member, calculated separately for customer and proprietary positions.

","related_topics":[]},{"id":497,"term":"Vega","definition":"

The measure of the change in an option's premium for a 1% change in the volatility of the underlying futures contract. Equal to the change in premium divided by 1% change in volatility.

","related_topics":[]},{"id":498,"term":"Vertical Spread","definition":"

Buying and selling puts or calls of the same expiration month but having different strike prices.

","related_topics":[]},{"id":499,"term":"Virtual Private Network (VPN)","definition":"

A private data network that makes use of the public telecommunication infrastructure, maintaining privacy through the use of a tunneling protocol and security procedures.

","related_topics":[]},{"id":500,"term":"Volatility","definition":"

A measurement of the change in price over a given time period.

","related_topics":[]},{"id":501,"term":"Volatility Quote","definition":"

An alternative means of quoting options, or combinations involving options, by bidding or offering the implied volatility. Any transactions quoted in volatility terms will be translated into price terms for clearing purposes by means of a standard options pricing model maintained and disseminated by the exchange.

","related_topics":[]},{"id":502,"term":"Volume","definition":"

The number of contracts in futures or options on futures transacted during a specified period of time.

","related_topics":[]},{"id":503,"term":"West Texas Intermediate (WTI)","definition":"

A grade of crude oil deliverable against the New York Mercantile Exchange light, sweet crude oil contract. Nominally, the benchmark crude of the U.S. oil industry.

","related_topics":[]},{"id":504,"term":"Wire House","definition":"

An individual or organization that solicits or accepts orders to buy or sell futures contracts or options on futures and accepts money or other assets from customers to support such orders. Also referred to as "commission house" or Futures Commission Merchant (FCM).

","related_topics":[]},{"id":505,"term":"Writer","definition":"

The issuer or seller of an option contract.

","related_topics":[]},{"id":506,"term":"Yard","definition":"

Market slang for a billion.

","related_topics":[]},{"id":507,"term":"Yield","definition":"

1) A measure of the annual return on an investment expressed as a percentage. 2) The proportion of heavy or light products which can be derived from a given barrel of crude oil.

","related_topics":[]},{"id":508,"term":"Yield Change","definition":"

One day's change in the futures' interest rate - equal and opposite to change in the settlement price.

","related_topics":[]},{"id":509,"term":"Yield Curve","definition":"

A chart that graphically depicts the yields of different maturity bonds of the same credit quality and type. Yield is depicted on the vertical axis and maturity on the horizontal axis. A normal yield curve is upward sloping, with short-term rates lower than long-term rates. An inverted yield curve is downward sloping, with short-term rates higher than long-term rates. A flat yield curve occurs when short-term rates are the same as long-term rates.

","related_topics":[]},{"id":510,"term":"Yield-To-Maturity","definition":"

The rate of return an investor receives if a fixed-income security is held to maturity.

","related_topics":[]},{"id":511,"term":"Zero-Sum Game","definition":"

Type of game when one player gains only at the expense of another player.

","related_topics":[]}])

Futures Glossary

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