Commodities options and futures trading act


All trades of a non-clearing member must be registered and eventually settled through a clearing member. An order placed electronically without the use of a broker either via the Internet or an electronic trading system. The futures contract month closest to expiration. 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 commodities options and futures trading act connection with commodities options and futures trading act and options customers. Derivatives involve the trading of rights or obligations based on the underlying product but do not directly transfer that product.

Some futures contracts, such as stock index contracts, are cash settled. A price system that allows for larger than normal allowable price movements under certain conditions. The practice of offsetting the price risk inherent in any cash market position by taking an opposite position in the futures market.

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 commodities options and futures trading act futures contract at the exercise price. Fundamental Analysis A method of anticipating future price movement using supply and demand information. One who has sold futures contracts or plans to purchase a cash commodity.

Closing Range A range of prices at which futures transactions took place during the close of the market. Speculators assume market price risk and add liquidity and capital to the futures markets. Volatility A measurement of the change in price over a given time period. Range The difference between the high and low price of a commodity during a given trading session,week, month, year, etc. The purchaser of either a commodities options and futures trading act or put option.

Writer 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. Speculators assume market price risk and add liquidity and capital to the futures markets. Offer An indication of willingness to sell a futures contract at a given commodities options and futures trading act the opposite of Bid.

The maximum advance or decline, from the previous day's settlement price, permitted for a futures contract in one trading session. 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. Varies from contract to contract.

The range of prices at which buy and sell transactions took place during the opening of the market. Premiums are arrived at through the market process. An order to buy or sell a futures or options contract at whatever price is obtainable when the order reaches the trading floor.