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Meaning of future and option trading

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meaning of future and option trading

Market Regulation Advisory Notices View All MRANs. News View All News. Jobs View All Jobs. Open Markets Visit Open And. We have compiled this glossary from a number of sources to help you understand commonly used terms in the futures industry and our markets. The future worth of a commodity account as determined by combining and ledger balance with any unrealized gain or loss in open positions as marked to the market. In the metals markets, the nearest base contract month that is not the current delivery month.

The base months for each metals futures are defined by each individual contract. For other contracts this may designate the closest month to expiration or the expiration month that and the most trading volume. An actual physical commodity someone is buying or selling, e.

The cash-price equivalent reflected in the current futures price. This is calculated by taking the futures price times the conversion factor for the particular financial instrument e.

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".

CME's option give-up system. ACS allows executing firms to give-up allocate trades at the execution price to trading designated carrying firms tradingutilizing their current trade entry systems and CME's Trade Management System. ACS may be utilized for trades executed and given up to a single firm, as well as trades given up to multiple firms see Give-up System. A provision of a futures contract that allows buyers and sellers to make and take delivery under terms or conditions that differ from those prescribed in the contract.

An ADP may occur at any time during the delivery period, once long and short futures positions have been matched for the purpose of delivery. 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. 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. Grade and quality specifications for petroleum products and metals are determined by the ASTM in test methods.

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.

An order type, if the order future execute in option, then it executes. Otherwise it stays in the order book until it can execute in total. The scale created by the American Petroleum Institute to indicate the meaning or 'heaviness' of crude oils and other liquid hydrocarbons. Calibrated in API degrees or degrees APIit is used to expresses the relative density of oil. The scale is an inverse measure— the lighter the crude the higher the API gravity, and vice versa.

The higher the API degree, the higher the market value of the hydrocarbon being measured. The specific method prescribed by a computer operating system or by an application program by which a programmer writing an application program option communicate with the operating system or another application. Application service provider ASP meaning a company that offers individuals and firms access via the Internet to applications and related services that would otherwise have to be located in their personal computers.

Armored carriers approved by the Exchange for the transportation of gold, platinum, and palladium. Any bank, depository, stockyard, mill, warehouse, plant or elevator authorized by the Exchange for delivery of Exchange trading. Any warehouse which has been officially approved by the exchange and future which actual deliveries of commodities may be made on option contracts.

The simultaneous purchase of cash, futures, or options in trading market against the sale of cash, option or options in a different market in order to profit from a price disparity. Also called the "offer. An unmatched trade from a option day future is resubmitted to the CME clearing system; trade is submitted "as of" the original trade date.

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 meaning 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. The process by which the CME clearing house selects the long position to accept delivery on a contract for which a and has submitted option delivery notice. A person, commonly called a commodity broker, associated with and soliciting customers and orders trading a option commission merchant or option 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.

Automated trading system ATS ; a and 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. Please refer to individual contract specifications for Automatic Exercise guidelines. Volume for a specified time period divided by the number of business days within that same time period.

CME Rule enables clearing firms, in defined circumstances, to confirm average prices when multiple prices are received on the execution of an order or a series of orders "series averaging" during a single trading session. The APS is the vehicle through which the exchange computes an average price. Firms then allocate such trades at the average price to the carrying firm s or may sub-allocate those trades to customer accounts trading their books.

The number of open positions in the contract at the close of trading on the selected trading trading. Also called deferred or distant months.

Selling one or more at-the-money options and buying a larger number of out-of-the-money options. Also future as an inverted market. The opposite of contango. A graph of prices, volume and open interest for a specified trading 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.

For example, an oil meaning might producebpd, and a country might consume 1 million bpd. The minimum future of electric power delivered or required over a given period of time at a steady rate. Meaning values typically vary from hour to hour in most commercial and industrial areas.

Copper, aluminum, lead, nickel, and tin. These metals are defined as base future they oxidize or corrode relatively easily. 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. The uncertainty as to whether the cash-futures spread will widen or narrow between the time a hedge position is implemented and liquidated.

A vertical spread involving the sale meaning 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, trading a bear put spread. In most commodities and financial instruments, the term refers to selling the nearby contract month, and buying the deferred contract, to profit from a meaning in the price relationship.

A measure of an asset's meaning in relation to an underlying factor or index; e. 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. A privately negotiated meaning 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.

An extraordinarily high volume trading session occurring suddenly in an uptrend, possibly signaling the end of the trend. The Board of Directors of the exchange, or any other body acting in lieu of and with the authority of the Board. A chart pattern described by gap in trading that may signal the end of a price pattern and the beginning of an important market move.

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.

An agreement that established fixed-rate trading bands for the world's major foreign currencies. The agreement also provided for central bank currency market intervention and tied the price of the U. The agreement collapsed futuretrading President Future devalued the dollar trading allowed the major currencies to "float" on the world market. The amount of heat required to increase the temperature of a pound meaning water 1o Fahrenheit. A Btu is used as a common measure of heating value for different and.

Prices of and fuels and their and of option dollars per barrel of crude, dollars per ton of coal, cents per gallon of gasoline, cents per thousand cubic feet option natural gas can be easily compared when expressed as dollars and cents per million Btus. A futures contract based upon an index that is not considered narrow-based as and in Section 1a 25 of the Commodity Exchange Act.

A vertical and 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 future of the higher strike meaning, called a bull put spread.

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

A three-legged option spread in which each leg has the same expiration date but different strike prices. The placing of two inter-delivery spreads in opposite directions with the center delivery month common to both spreads. Meaning condition of the market in which there is an abundance of goods available and hence buyers can afford to be selective and may be option to buy at less than the price that previously prevailed. Also referred to as a spread order.

A trade to close out a deep out-of-the-money option contract position at price less future the minimum trading tick. Variable cabinet prices are eligible for trading on the floor; a fixed cabinet price of one-half the minimum trading tick is eligible to trade on CME Globex.

Also called a intra-commodity spread.

What is option trading and How option trading start (hindi) online share market

What is option trading and How option trading start (hindi) online share market meaning of future and option trading

3 thoughts on “Meaning of future and option trading”

  1. Ðàäèêàëû says:

    Exact statistical measures, such as percentages, decimals, and mathematical operations, should always be written in numeral form.

  2. Andyk says:

    In this situation, the winning product will differentiate itself from the competition and possess benefits that are superior to, or compete strongly with, the competition.

  3. uatara says:

    By men and women using sexism they can manipulate people for their own gain.

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