Commodity trading future and option trading
The total number of futures or options contracts of a given commodity that have not yet been offset by an opposite futures or option transaction nor fulfilled by delivery of the commodity or option exercise. Generally the last date on which an option may be exercised. Margin Call A call from a clearinghouse to a clearing member, or from a broker or firm to a customer, to bring margin deposits up to a commodity trading future and option trading minimum level.
The difference between the spot or cash price of a commodity and the price of the nearest futures contract for the same or a related commodity. Cross-Hedging Hedging a cash commodity using commodity trading future and option trading different but related futures contract when there is no futures contract for the cash commodity being hedged and the cash and futures market follow similar price trends e. Fundamental Analysis A method of anticipating future price movement using supply and demand information. Commission A fee charged by a broker to a customer for executing a transaction.
Net Asset Value The value of each unit of participation in a commodity pool. Also referred to as Actuals. It describes trading strategy, fees, performance, etc. Clearinghouse A corporation commodity trading future and option trading separate division of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting trade data. Long One who has bought futures contracts or options on futures contracts or owns a cash commodity.
Commodity trading future and option trading A market participant who tries to profit from buying and selling futures and options contracts by anticipating future price movements. An expression of willingness to buy a commodity at a given price; the opposite of Offer. Volatility A measurement of the change in price over a given time period. Carrying Broker A member of a futures exchange, usually a clearinghouse member, through which another firm, broker or customer chooses to clear all or some trades.
A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity. Minimum Price Fluctuation See Tick. A market in which prices are declining. Once you buy the option, your risk is set, and commodity trading future and option trading now have the right to buy one Corn contract stock at the
But if Corn were to have a dramatic and quick spike in price, and it jumped up to The range of prices at which buy and sell transactions took place during the opening of the market. The number of purchases and sales of futures contracts made commodity trading future and option trading a specified period of time, often the total transactions for one trading day. The price a buyer pays and a seller receives for an option.
See also Position Limit, Variation Limit. Over-the-Counter Market OTC A market where products such as stocks, foreign currencies and other cash items are bought and sold by telephone, Internet and other electronic means of commodity trading future and option trading rather than on a designated futures exchange. A contract which gives the buyer the right, but not the obligation, to buy or sell a specified quantity of a commodity or a futures contract at a specific price within a specified period of time.
Also referred to as Maximum Price Fluctuation. In general, an option premium is the sum of time value and intrinsic value. Also referred to as Closing Price.
Option buyers receive the right, but not the obligation, to assume a futures position. A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity. Basis is usually computed in relation to the futures contract next to commodity trading future and option trading and may reflect different time periods, product forms, qualities, or locations.