Finance

Month: November 2016

  • Fungibility

    Concept of Fungibility in Futures TradingIn this context of financial law, the following is a definition of Fungibility: The characteristic of interchangeability. Futures contracts for the same commodity and delivery month traded on the same exchange are fungible due to their standardized […]

  • Futures Commission Merchant

    Concept of Futures Commission Merchant (FCM) in Futures TradingIn this context of financial law, the following is a definition of Futures Commission Merchant (FCM): Individuals, associations, partnerships, corporations, and trusts that solicit or accept orders for the purchase or sale of any […]

  • Strategy-Based Margining

    Concept of Strategy-Based Margining in Futures TradingIn this context of financial law, the following is a definition of Strategy-Based Margining: A method for setting margin requirements whereby the potential for gains on one position in a portfolio to offset losses on another position is […]

  • Clearing Price

    ResourcesSee AlsoSettlement Price Futures Trading Consumer Protection Consumer Finance

  • Swap Dealer

    Concept of Swap Dealer in Futures TradingIn this context of financial law, the following is a definition of Swap Dealer: The Dodd-Frank Act and subsequent CFTC rules, in general, identify a “swap dealer” as any person who:1. holds itself out as a dealer in swaps, 2. makes a market in […]

  • Market Order

    Concept of Market Order in Futures TradingIn this context of financial law, the following is a definition of Market Order: An order to buy or sell a futures contract at whatever price is obtainable at the time it is entered in the order book, ring, pit, or other trading platform.

  • Strangle

    Concept of Strangle in Futures TradingIn this context of financial law, the following is a definition of Strangle: An option position consisting of the purchase of put and call options having the same expiration date, but different strike prices.

  • Cost of Carry

    ResourcesSee AlsoCarrying Charges Futures Trading Consumer Protection Consumer Finance

  • Long the Basis

    Concept of Long the Basis in Futures TradingIn this context of financial law, the following is a definition of Long the Basis: A person or firm that has bought the spot commodity and hedged with a sale of futures is said to be long the basis

  • Interwoven

    Concept of Interwoven in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An application that enables banks, broker dealers and trading desks to automate their middle and back-office operations. It’s services also include automation of […]

  • Collateralised Debt Obligation

    Collateralised Debt Obligation (cdo)Concept of Collateralised Debt Obligation (cdo) in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A structure used to distribute risk through tranching a portfolio of credit, and issuing notes or swaps of […]

  • Reserve

    Definition of ReserveThis is the meaning of Reserve published by Marco Terry: A specified amount of funds, often expressed as a percentage of the funding line that is used to cover bad debt expenses and payment shortages.

  • Netting

    Concept of Netting in Futures TradingIn this context of financial law, the following is a definition of Netting: The process of calculating aggregate risk exposures across the portfolios of market participant. For example, if a trader has entered one trade in which she is long $100 worth of […]

  • Ex-Pit

    ResourcesSee AlsoTransfer Trades and Exchange for Physicals Futures Trading Consumer Protection Consumer Finance

  • Positive Carry

    Concept of Positive Carry in Futures TradingIn this context of financial law, the following is a definition of Positive Carry: The cost of financing a financial instrument (the short-term rate of interest), where the cost is less than the current return of the financial instrument. See Carrying […]