Intermediary

Intermediary

Concept of Intermediary in Futures Trading

In this context of financial law, the following is a definition of Intermediary: A person who acts on behalf of another person in connection with futures trading, such as a futures commission merchant, introducing broker, commodity pool operator, commodity trading advisor, or associated person.

Commodity Exchange

Commodity Exchange

Concept of Commodity Exchange Act (CEA) in Futures Trading

In this context of the United States financial law, the following is a definition of Commodity Exchange Act (CEA): The Commodity Exchange Act, 7 USC 1, et seq., provides for the federal regulation of commodity futures and options trading and was enacted in 1936.

Conversion Factors

Conversion Factors

Concept of Conversion Factors in Futures Trading

In this context of financial law, the following is a definition of Conversion Factors: Numbers published by a futures exchange to determine invoice prices for debt instruments deliverable against bond or note futures contracts. A separate conversion factor is published for each deliverable instrument. Invoice price = Contract Size X Futures Settlement Price X Conversion Factor + Accrued Interest.

Obligation

Obligation

Obligation Acceleration

Concept of Obligation Acceleration in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A credit event term used in a credit derivative (i.e. an instrument that transfers risk from one party to the other) when one or more of the obligations of the reference entity have become declared due and payable before they would otherwise have been, due to an event of default of the reference entity (other than failure to pay).

Resources

See Also

  • Derivatives Contract

Credit Event

Credit Event

Concept of Credit Event in Futures Trading

In this context of financial law, the following is a definition of Credit Event: An event such as a debt default or bankruptcy that will affect the payoff on a credit derivative, as defined in the derivative agreement.

Credit Event

Concept of Credit Event in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An event linked to the deteriorating credit worthiness of an underlying reference entity in a credit derivative. The occurrence of a credit event usually triggers full or partial termination of the transaction and a payment from protection seller to protection buyer. Credit events include bankruptcy, failure to pay, restructuring, obligation acceleration, obligation default and repudiation/moratorium.

Resources

See Also

  • Derivatives Contract

Client

Client

Definition of Client

This is the meaning of Client published by Marco Terry: A factoring client who sells their invoices to the factor. Not to be confused with the term customer.

Carrying Charges

Carrying Charges

Concept of Carrying Charges in Futures Trading

In this context of financial law, the following is a definition of Carrying Charges: Also called Cost of Carry. Cost of storing a physical commodity or holding a financial instrument over a period of time. These charges include insurance, storage, and interest on the deposited funds, as well as other incidental costs. It is a carrying charge market when there are higher futures prices for each successive contract maturity. If the carrying charge is adequate to reimburse the holder, it is called a ‘full charge’. See Negative Carry, Positive Carry, and Contango.