Another term for buying which typically takes place at the end of a market sell-off or downward trend, where the selling pressures have evaporated and the buyers have stepped in to start buying stocks in anticipation of a market reversal. This also takes place during a pause on an established upward trend – most notably as price levels show consolidation.
Read more...

Read more...

The simultaneous purchase and sale of similar commodities in different markets to take advantage of a price discrepancy.
Read more...

The process of resolving disputes between parties by a person or persons (arbitrators) chosen or agreed to by them.   NFA's arbitration program provides a forum for resolving futures-related disputes between NFA Members or between Members and customers.
Read more...

An individual who solicits orders, customers or customer funds on behalf of a Futures Commission Merchant, an Introducing Broker, a Commodity Trading Advisor or a Commodity Pool Operator and who is registered with the Commodity Futures Trading Commission.
Read more...

An option whose strike price is equal—or approximately equal—to the current market price of the underlying futures contract.
Read more...

The difference between the current cash price of a commodity and the futures price of the same commodity.
Read more...

A market in which prices are declining. A market participant who believes prices will move lower is called a “bear.”A news item is considered bearish if it is expected to result in lower prices.
Read more...

A frequent term used by investors and traders that represent the people and funds that are pessimistic on the ability of the market to increase in value. When the market or a particular stock is showing bearish tendencies, that means there is heavy distribution or selling taking place. When the bears lose their sense of pessimism, the markets will then begin to start seeing heavy buying. Remember: when a person says he is “bearish”, understand that he means that he expects the market or a particular stock to decrease in value.
Read more...

An expression of willingness to buy a commodity at a given price; the opposite of Offer.
Read more...

This occurs to the downside when after a period of sideways trading or trading within a range, when a stock moves down and outside of that range, it is considered to be breaking down. Often times this marks the beginning of a long-term sell-off that can provide substantial profits for those who spot the breakdown early on.
Read more...

A company or individual that executes futures and options orders on behalf of financial and commercial institutions and/or the general public.
Read more...

A market in which prices are rising. A market participant who believes prices will move higher is called a “bull.”A news item is considered bullish if it is expected to result in higher prices.
Read more...

An option which gives the buyer the right, but not the obligation, to purchase (“go long”) the underlying futures contract at the strike price on or before the expiration date.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.
Read more...

The actual physical commodity as distinguished from the futures contract based on the physical commodity.   Also referred to as Actuals.
Read more...

A method of settling certain futures or options contracts whereby the market participants settle in cash (payment of money rather than delivery of the commodity).
Read more...

The use of graphs and charts in the technical analysis of futures markets to plot price movements, volume, open interest or other statistical indicators of price movement.
Read more...

A system of trading halts and price limits on equities and derivatives markets designed to provide a cooling-off period during large, intraday market declines or rises.
Read more...

The process by which a clearinghouse maintains records of all trades and settles margin flow on a daily mark-to-market basis for its clearingmembers.
Read more...

A member of an exchange clearinghouse responsible for the financial commitments of its customers.All trades of a non-clearing member must be registered and eventually settled through a clearing member.
Read more...

A corporation or separate division of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting trade data. The clearinghouse becomes the buyer to each seller (and the seller to each buyer) and assumes responsibility for protecting buyers and sellers from financial loss by assuring performance on each contract.
Read more...

Closing Price See Settlement Price.
Read more...

A range of prices at which futures transactions took place during the close of the market.
Read more...

A fee charged by a broker to a customer for executing a transaction.
Read more...

The federal regulatory agency established in 1974 that administers the, Commodity Exchange Act.The CFTC monitors
Read more...

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 market follow similar price trends
Read more...

Customer Segregated Funds See Segregated Account.
Read more...

An order that if not executed expires automatically at the end of the trading session on the day it was entered.
Read more...

A speculator who will normally initiate and offset a position within a single trading session.
Read more...

The failure to perform on a futures contract as required by exchange rules, such as a failure to meet a margin call or to make or take delivery.
Read more...

The distant delivery months in which futures trading is taking place, as distinguished from the nearby futures delivery month.
Read more...

The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific procedures for delivery of a cash commodity. Some futures contracts,such as stock index contracts, are cash settled.
Read more...

Delivery Month See Contract Month.
Read more...

A financial instrument, traded on or off an exchange, the price of which is directly dependent upon the value of one or more underlying securities, equity indices, debt instruments, commodities, other derivative instruments, or any agreed upon pricing index or arrangement. Derivatives involve the trading of rights or obligations based on the underlying product but do not directly transfer that product.They are generally used to hedge risk.
Read more...

The statement that some CPOs must provide to customers. It describes trading strategy, fees, performance, etc.
Read more...

(1) The amount a price would be reduced to purchase a commodity of lesser grade; (2) sometimes used to refer to the price differences between futures of different delivery months, as in the phrase “July is trading at a discount to May,” indicating that the price of the July future is lower than that of May; (3) applied to cash grain prices that are below the futures price.
Read more...

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. Also referred to as a Managed Account.
Read more...

Another term for selling which typically takes place at the end of a market rally or upward trend, where the buying power has evaporated and the sellers have stepped in to start selling their stocks or to begin short sales in anticipation of a market reversal. This also takes place during a pause on an established downward trend, as the bears add more capital to their short positions – most notably as price levels show consolidation.
Read more...

The opposite of the upward trendline, it is a line connecting a series of “lower-highs” of price levels of a particular stock. The steeper the trend line the more difficult it is to maintain the trend. A break of the downward trendline or more importantly the creation of a “higher-high” means the trend has been broken and is now either trading “sideways” or has begun a new upward trendline.
Read more...

An order placed electronically (without the use of a broker) either via the Internet or an electronic trading system.
Read more...

Systems that allow participating exchanges to list their products for trading electronically. These systems may replace, supplement or run along side of the open outcry trading.
Read more...

The value of a futures trading account if all open positions were offset at the current market price
Read more...

The action taken by the holder of a call option if he wishes to purchase the underlying futures contract or by the holder of a put option if he wishes to sell the underlying futures contract.
Read more...

Generally the last date on which an option may be exercised. It is not uncommon for an option to expire on a specified date during the month prior to the delivery month for the underlying futures contracts.
Read more...

The first day on which notice of intent to deliver a commodity in fulfillment of an expiring futures contract can be given to the clearinghouse by a seller and assigned by the clearinghouse to a buyer.Varies from contract to contract. 1) The value of a futures trading account if all open positions were offset at the current market price; 2) an ownership interest in a company, such as stock.
Read more...

An individual who executes orders on the trading floor of an exchange for any other person.
Read more...

Read more: http://www.investopedia.com/terms/f/futurescontract.asp#ixzz1bX496waO
Read more...

A Guaranteed Introducing Broker is an IB that has a written agreement with a Futures Commission Merchant that obligates the FCM to assume financial and disciplinary responsibility for the performance of the Guaranteed Introducing Broker in connection with futures and options customers.  A Guaranteed Introducing Broker is not subject to minimum financial requirements.
Read more...

A technical pattern used to identify a top in a particular stock. A stock will typically increase in value followed by a mild sell-off, which is the "left shoulder". Then the buyers step in to push the index to new highs, followed by a larger sell-off, that sends prices back to about where the previous low was created. At this point the "head" portion of the pattern has been created. Then finally buyers push the price of the stock back up, but instead of creating a new high, it creates a lower high, which becomes the "right shoulder" of the tecnical patter. Typically these patters take 2 to 3 months to develop or longer. What chart technicians prefer to do is draw a support line underneath the two previous lows, and any break of that support line will be a "sell signal".
Read more...

The practice of offsetting the price risk inherent in any cash market position by taking an opposite position in the futures market. A long hedge involves buying futures contracts to protect against possible increasing prices of commodities. A short hedge involves selling futures contracts to protect against possible declining prices of commodities.
Read more...

The highest price of the day for a particular futures or options on futures contract.
Read more...

An Independent Introducing Broker is an IB subject to minimum capital requirements.
Read more...

The amount a futures market participant must deposit into a margin account at the time an order is placed to buy or sell a futures contract.
Read more...

The last day on which trading may occur in a given futures or option.
Read more...

The ability to control large dollar amounts of a commodity with a comparatively small amount of capital.
Read more...

To sell a previously purchased futures or options contract or to buy back a previously sold futures or options position. Also referred to as Offset.
Read more...

A characteristic of a security or commodity market with enough units outstanding and enough buyers and sellers to allow large transactions without a substantial change in price.
Read more...

A member of an exchange who trades for his own account
Read more...

One who has bought futures contracts or options on futures contracts or owns a cash commodity.
Read more...

A term used for buying stocks  or futures contract in anticipation that the stock will go up in value. This is the most traditional means of investing/trading. Its exact opposite counterpart is “going short”.
Read more...

The lowest price of the day for a particular futures or options on futures contract.
Read more...

A set minimum amount (per outstanding futures contract) that a customer must maintain in his margin account to retain the futures position.
Read more...

An amount of money deposited by both buyers and sellers of futures contracts and by sellers of options contracts to ensure performance of the terms of the contract (the making or taking delivery of the commodity or the cancellation of the position by a subsequent offsetting trade). Margin in commodities is not a down payment, as in securities, but rather a performance bond.
Read more...

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 required minimum level.
Read more...

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.
Read more...

An order to buy or sell a futures or options contract at whatever price is obtainable when the order reaches the trading floor.
Read more...

Read more...

Authorized by Congress in 1974 and designated by the CFTC in 1982 as a “registered futures association,” NFA is the industrywide self-regulatory organization of the futures industry.
Read more...

The futures contract month closest to expiration. Also referred to as the Spot Month.
Read more...

The value of each unit of participation in a commodity pool. Basically a calculation of assets minus liabilities plus or minus the value of open positions when marked to the market, divided by the total number of outstanding units.
Read more...

An increase or decrease in net asset value exclusive of additions, withdrawals and redemptions.
Read more...

A firm or individual that solicits and accepts commodity futures orders from customers but does not accept money, securities or property from the customer.All Introducing Brokers must be registered with the CFTC.
Read more...

An indication of willingness to sell a futures contract at a given price; the opposite of Bid.
Read more...

An account carried by one Futures Commission Merchant (FCM) with another FCM in which the transactions of two or more persons are combined and carried in the name of the originating FCM rather than of the individual customers; the opposite of Fully Disclosed.
Read more...

The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made “at the open.”
Read more...

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.  Each opentransaction has a buyer and a seller, but for calculation of open interest, only one side of the contract is counted.
Read more...

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

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

The unrealized gain or loss on open positions.
Read more...

The range of prices at which buy and sell transactions took place during the opening of the market.
Read more...

The purchaser of either a call or put option. Option buyers receive the right, but not the obligation, to assume a futures position.  Also referred to  as a Holder.
Read more...

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. The seller of the optionhas the obligation to sell the  commodity or futures contract or to buy it from the option buyer at the exercise price if the option is exercised.
Read more...

The price a buyer pays (and a seller receives) for an option. Premiums are arrived at through the market process. There are two components in determining this price—extrinsic (or time) value and intrinsic value.
Read more...

A call option with a strike price higher or a put option with a strike price lower than the current market value of the underlying asset (i.e., an option that does not have any intrinsic value).
Read more...

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 communication rather than on a designated futures exchange.
Read more...

A term that we often use to describe market conditions that have seen substantial buying for over a period of time, and as a result the bulls may not have enough capital on the sidelines to legitimately keep the rally going. A good indicator for measuring the overbought/oversold conditions of an index, ETF, or stock is by using the Stochastics. A reading over 80 is a signal that the conditions are becoming overbought, while a reading under 20 is a signal that the conditions are becoming oversold.
Read more...

A term that we often use to describe market conditions that have seen substantial selling for over a period of time, and as a result the bears may not have enough capital on the sidelines to legitimately sustain the sell-off. A good indicator for measuring the overbought/oversold conditions of an index, ETF, or stock is by using the Stochastics. A reading over 80 is a signal that the conditions are becoming overbought, while a reading under 20 is a signal that the conditions are becoming oversold.
Read more...

The area on the trading floor where trading in futures or options contracts is conducted by open outcry. Also referred to as a ring.
Read more...

A commitment, either long or short, in the market.
Read more...

The maximum number of speculative futures contracts one can hold as determined by the CFTC and/or the exchange where the contract is traded.
Read more...

A trader who either buys or sells contracts and holds them for an extended period of time, as distinguished from a day trader.
Read more...

Refers to (1) the price paid by the buyer of an option; (2) the price received by the seller of an option; (3) cash prices that are above the futures price; (4) the amount a price would be increased to purchase a better quality commodity; or (5) a futures delivery month selling at a higher price than another.
Read more...

The maximum advance or decline, from the previous day's settlement price, permitted for a futures contract in one trading session.  Also referred to as Maximum Price Fluctuation.
Read more...

A statement sent by a Futures Commission Merchant to a customer when a futures or options position has been liquidated or offset.  The statement shows the number of contracts bought or sold, 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 transaction.   Sometimes combined with a Confirmation Statement.
Read more...

An option which gives the buyer the right, but not the obligation, to sell the underlying futures contract at a particular price (strike or exercise price) on or before a particular date.
Read more...

The actual price or the bid or ask price of either cash commodities or futures or options contracts at a particular time.
Read more...

The difference between the high and low price of a commodity during a given trading session,week, month, year, etc.
Read more...

The difference between the high and low price of a commodity during a given trading session,week, month, year, etc.
Read more...

The term is used in conjunction with the CFTC’s customer claims procedure to recover civil damages.
Read more...

The regulations adopted and enforced by the CFTC in order to administer the Commodity Exchange Act.
Read more...

The number of open contracts specified by the CFTC when a firm or individual must begin reporting total positions by delivery month to the authorized exchange and/or the CFTC.
Read more...

A price level on the charts where sellers are likely to jump in and attempt to stop a rallying stock, with increased selling power. Often this is an emotional pivot point for sellers in which as much as it is willing to sell at these levels it is also willing to cover their short positions, if there is a break of the resistance level. Resistance is also marked by time in that the more recent the resistance level, the fresher it is in the minds of sellers and the more loyal they are to it. The older the resistance level, the weaker it will tend to be. Identical resistance levels across various points of time often add increased resistance. Stop-losses are often times, placed above a resistance level, which adds to the buying/covering if there is a breach. Also note that once a resistance level is broken, and price moves beyond it, it thereby becomes a level of support for buyers.
Read more...

A completed futures transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.
Read more...

The standards and requirements to which participants who are required to be Members of National Futures Association must subscribe and conform.
Read more...

A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.
Read more...

A special account used to hold and separate customers’ assets for trading on futures exchanges from those of the broker or firm.Also referred to as Customer Segregated Funds.
Read more...

The last price paid for a futures contract on any trading day. Settlement prices are used to determine open trade equity, margin calls and invoice prices for deliveries.Also referred to as Closing Price.
Read more...

A shift-line is a price that acts as resistance/supports then shift to support/resistance

Read more...

One who has sold futures contracts or plans to purchase a cash commodity.
Read more...

A market participant who tries to profit from buying and selling futures and options contracts by anticipating future price movements. Speculators assume market price risk and add liquidity and capital to the futures markets.
Read more...

Usually refers to a cash market for a physical commodity where the parties generally expect immediate delivery of the actual commodity.
Read more...

The buying and selling of two different delivery months or related commodities in the expectation that a profit will be made when the position is offset.
Read more...

An order that becomes a market order when the futures contract reaches a particular price level. A sell stop is placed below the market, a buy stop is placed above the market.
Read more...

An order that becomes a market order when the futures contract reaches a particular price level. A sell stop is placed below the market, a buy stop is placed above the market.
Read more...

The price at which the buyer of a call (put) option may choose to exercise his right to purchase (sell) the underlying futures contract. Also called Exercise Price.
Read more...

A price level on the charts where buyers are likely to jump in and attempt to stop a declining stock, with increased buying power. Often this is an emotional pivot point for buyers in which as much as it is willing to buy at these levels, it is also willing to sell if there is a break of the support level. Support is also marked by time in that the more recent the support level, the fresher it is in the minds of buyers and the more loyal they are to it. The older the support level, the weaker it will tend to be. Identical support levels across various points of time often add increased support. Stop-losses are often times, placed below a support level, which adds to the selling if there is a breach. Also note that once a support level is broken, and price moves below it, it thereby becomes a level of resistance for sellers.
Read more...

An approach to analysis of futures markets which examines patterns of price change, rates of change, and changes in volume of trading, open interest and other statistical indicators.
Read more...

The smallest increment of price movement for a futures contract.   Also referred to as Minimum Price Fluctuation.
Read more...

The amount of money options buyers are willing to pay for an option in 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.  Also referred to as Extrinsic Value.
Read more...

In the absence of an upward or downward trendline, the market is trading sideways. Trading sideways doesn’t necessarily mean it is trading in a narrow range, rather it is trading without either side have a clear advantage. Thus until leadership emerges from the bulls or bears, the market trades sideways.
Read more...

A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity. Also referred to as a Naked Option.
Read more...

The specific futures contract that the option conveys the right to buy (in case of a call) or sell (in the case of a put).
Read more...

A line connecting a series of “higher-lows” of price levels of a particular stock. The steeper the trend line the more difficult it is to maintain the trend. A break of the upward trendline or more importantly the creation of a “lower-low” means the trend has been broken and is now either trading “sideways” or has begun a new downward trendline.
Read more...

A price system that allows for larger than normal allowable price movements under certain conditions. In periods of extreme volatility, some exchanges permit trading at price levels that exceed regular daily price limits.
Read more...

Additional margin required to be deposited by a clearing member firm to the clearinghouse during periods of great market volatility or in the case of high-risk accounts.
Read more...

A measurement of the change in price over a given time period.
Read more...

The number of purchases and sales of futures contracts made during a specified period of time, often the total transactions for one trading day.
Read more...

A person who sells an option and assumes the potential obligation to sell (in the case of a call) or buy (in the case of a put) the underlying futures contract at the exercise price.Also referred to as an Option Grantor. Yield
Read more...

A measure of the annual return on an investment.
Read more...