In this way, buyers and sellers are protected against the possibility of contract default. Electronic market orders at cme group are implemented using a “market with protection” approach. Unlike a conventional market order, where customers are at risk of having their orders filled at extreme prices, market with protection orders are filled within a predefined range of prices (the protected range).
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. The sale of a futures contract in anticipation of a later cash market sale.
Type of option contract which can only be exercised on expiration date. A measure of a group of stocks, also called equities, used to describe the market and analyze the return on specific stock LimeFx. The price at which the quantity demanded of a commodity https://limefx.vip/ is equal to the quantity supplied. Price differences between classes, grades, and delivery locations of various stocks of the same commodity. Occurs when, because of a change in exchange rates, a unit of one currency buys fewer units of another currency.
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. The maximum daily price fluctuations on a futures contract during any one session, as determined by the Exchange.
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. One who has bought futures or options contracts to create an open position or owns a cash commodity. 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 LimeFxs so that their trading activity will not influence the market price. 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”.
A sell stop is placed below the market; a buy stop is placed above the market. 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. Industry terms which denote the relative degree of a given crude oil’s sulfur content. Sour crude refers to those crudes with a comparatively high sulfur content, 0.5% by weight and above; Sweet refers to those crudes with sulfur content of less than 0.5%.
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. Stocks of commodities held in depositories or warehouses certified by an exchange-approved inspection authority as constituting good delivery against a futures contract position. Current total certified stocks are reported in the press for many important commodities such as gold, silver and platinum. (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.
The court noted that the district court did not decide whether the parties’ arbitration agreements relinquished defendants’
purported rights to FINRA arbitration. To the extent that intermediaries bear costs as a result of inefficient allocation of collateral limefx forex broker assets, these may be reflected in transaction costs. The Commission agrees with the comments that the current state of technology and market infrastructure and operations support amending Rule 15c6-1(a) to establish a T+2 settlement cycle.
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. An electronic communications protocol developed to provide a uniform method of exchanging real-time infomation specifically related to financial transactions. 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. Demand quantity of a good that consumers are willing and able to purchase at various prices during a given period of time.
The minimum unit by which the price of a commodity can fluctuate, as established by the Exchange. 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. Market Profile is an limefx 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. Utility service which expects and permits interruption on short notice, generally in peak-load periods, in order to meet the demand by firm service customers.
A market in which custom-tailored contracts such as stocks and foreign currencies are bought and sold between counterparties and are not exchange traded. Premiums are arrived at through open competition between buyers and sellers on the trading floor of the exchange. The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made “at the opening.” 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.
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. 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. 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. 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.
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. 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.
- Definitions are not intended to state or suggest the views of CME Group concerning the legal significance or meaning of any word or term and no definition is intended to state or suggest CME Group’s views concerning any trading strategy or economic theory.
- The defendants alleged Commodity Exchange Act violations against FCStone and initiated arbitration proceedings before the Financial Industry Regulatory Authority (FINRA).
- A term used to denote trade in non-physical oil (futures, forwards, swaps, etc.) Markets which give a buyer or seller the right to a certain quantity and quality of crude oil or refined products at a future date, but not to any specific physical lot.
- 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 index variations give trends of the market/market segment measured.
Trades involving retail investors are typically smaller in size than institutional trades, and the settlement of retail investor trades generally occurs directly with the investor’s or their intermediary’s broker-dealer and does not involve a separate custodian bank. Accordingly, retail investors do not rely upon the involvement of a Matching/ETC Provider to facilitate the settlement of their transactions. 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. 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.
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. Term refers to a sale in which the buyer agrees to pay a unit price that includes the free on board (fob) value at the port of origin plus all costs of insurance and transportation. This type of transaction differs from a “delivered” agreement in that it is generally ex-duty, and the buyer accepts the quantity and quality at the loading port rather than paying for quality and quantity as determined at the unloading port.
The actual amount of a commodity represented in a futures or options contract as specified in the contract specifications. 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.
Broker-dealers may incur incremental costs in order to update these systems to support a shorter settlement cycle. Further, changes to initial and ongoing operational costs may make some self-clearing market participants alter their decision to continue internally managing the clearance and settlement of their transactions. The overall compliance costs that a market participant incurs in connection with the amendment to Rule 15c6-1(a) will depend on the extent to which it is directly involved in functions related to clearance and settlement, asset servicing, and other activities. For example, retail investors may bear few (if any) direct costs in a transition to a T+2 standard settlement cycle, because their respective broker-dealer handles the back-office functions of each transaction. However, as is discussed below, this does not imply that retail investors will not face indirect costs from the transition, such as those passed through from broker-dealers or banks.
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. Established in 1991—the National Introducing Brokers Association is one of the foremost, nationally recognized organizations representing professionals in the futures and options industry.
These modifications may include a compression of the settlement timeline, as well as an increase in the fees that brokers may impose on their customers for trade failures. In addition, the Commission notes that market participants involved in certain transactions will not experience substantial benefits related to reducing the maximum number of days required to settle most securities transactions. The Commission has also considered the consequences of mandating specific clearance and settlement practices, such as STP, in lieu of the amendment to Rule 15c6-1(a). STP involves the electronic entry of trade details during the settlement process, which avoids the manual entry and re-entry of trade details.