Month: January 2016

  • Volatility

    Concept of Volatility in Futures TradingIn this context of financial law, the following is a definition of Volatility: A statistical measurement (the annualized standard deviation of returns) of the rate of price change of a futures contract, security, or other instrument underlying an option. […]

  • Curb Trading

    Concept of Curb Trading in Futures TradingIn this context of financial law, the following is a definition of Curb Trading: Trading by telephone or by other means that takes place after the official market has closed and that originally took place in the street on the curb outside the market. […]

  • Arbitrage

    Concept of Arbitrage in Futures TradingIn this context of financial law, the following is a definition of Arbitrage: A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets in order to benefit […]

  • Detachment Point

    Concept of Detachment Point in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The detachment point defines the point after the attachment point where losses in the underlying portfolio no longer reduce the notional of a tranche. For example, […]

  • Even Lot

    Concept of Even Lot in Futures TradingIn this context of financial law, the following is a definition of Even Lot: A unit of trading in a commodity established by an exchange to which official price quotations apply. See Round Lot.

  • Amortising Swap

    Concept of Amortising swap in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A swap (i.e. a derivative where two counterparties exchange streams of cashflows with each other) with a decreasing principal amount as set out in a predefined […]

  • Cost

    All in CostConcept of All in Cost in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The cost of funds in a bond issue after fees and expenses.ResourcesSee AlsoDerivatives Contract

  • Initial Deposit

    ResourcesSee AlsoInitial Margin Futures Trading Consumer Protection Consumer Finance

  • Dispersion Trade

    Concept of Dispersion Trade in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A structure in which one party sells an option on an index and simultaneously buys individual options on each of the index constituents. The buyer of this structure […]

  • Last Notice Day

    Concept of Last Notice Day in Futures TradingIn this context of financial law, the following is a definition of Last Notice Day: The final day on which notices of intent to deliver on futures contracts may be issued.

  • Swaps Guarantee

    Concept of Swaps Guarantee in Futures TradingIn this context of financial law, the following is a definition of Swaps Guarantee: A guarantee of a swap is a collateral promise by a guarantor to answer for the debt or obligation of a counterparty obligor under a swap.

  • Knock-In

    Concept of Knock-In in Futures TradingIn this context of financial law, the following is a definition of Knock-In: A provision in an option or other derivative contract, whereby the contract is activated only if the price of the underlying instrument reaches a specified level before a specified […]

  • Fast Market

    Concept of Fast Market in Futures TradingIn this context of financial law, the following is a definition of Fast Market: An open outcry market situation in which transactions in the pit or ring take place in such volume and with such rapidity that price reporters fall behind with price […]

  • Merger Event

    Concept of Merger Event in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The term used in a credit derivative (i.e. an instrument that transfers risk from one party to the other) when there is a transfer of ownership of 100% of shares of a […]

  • Extraordinary Event

    Concept of Extraordinary Event in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An extraordinary event that affects the underlying shares or index for example merger event, tender offer, nationalisation or index disruption event.ResourcesSee […]