Tag: Futures Trading
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Intermediary
Concept of Intermediary in Futures TradingIn 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, […]
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Commodity Exchange
Concept of Commodity Exchange Act (CEA) in Futures TradingIn 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 […]
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Conversion Factors
Concept of Conversion Factors in Futures TradingIn 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 […]
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Credit Event
Concept of Credit Event in Futures TradingIn 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.
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Carrying Charges
Concept of Carrying Charges in Futures TradingIn 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, […]
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Seat
Concept of Seat in Futures TradingIn this context of financial law, the following is a definition of Seat: An instrument granting trading privileges on an exchange. If the exchange has a mutual ownership structure, a seat may also represent an ownership interest in the exchange.
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Chartist
Concept of Chartist in Futures TradingIn this context of financial law, the following is a definition of Chartist: Technical trader who reacts to signals derived from graphs of price movements.
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Commodity Exchange Commission
Concept of Commodity Exchange Commission (CEC) in Futures TradingIn this context of the United States financial law, the following is a definition of Commodity Exchange Commission (CEC): The Commodity Exchange Commission was the successor commission to the Grain Futures Commission, which was […]
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Delta
Concept of Delta in Futures TradingIn this context of financial law, the following is a definition of Delta: A calculation of the expected change in an option’s price given a one-unit change in the price of the underlying commodity or asset. For example, the price of an option with a delta of […]
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Price Banding
Concept of Price Banding in Futures TradingIn this context of financial law, the following is a definition of Price Banding: A CME Group and ICE-instituted mechanism to ensure a fair and orderly market on an electronic trading platform. This mechanism subjects all incoming orders to price […]
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Systemic Risk
Concept of Systemic Risk in Futures TradingIn this context of financial law, the following is a definition of Systemic Risk: The risk that a default by one market participant will have repercussions on other participants due to the interlocking nature of financial markets. For example, Customer […]
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Clearing Organization
Concept of Clearing Organization in Futures TradingIn this context of financial law, the following is a definition of Clearing Organization: An entity through which futures and other derivative transactions are cleared and settled. It is also charged with assuring the proper conduct of each […]
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Bull Spread
Concept of Bull Spread in Futures TradingIn this context of financial law, the following are some alternative definitions of Bull Spread: (a) A strategy involving the simultaneous purchase and sale of options of the same class and expiration date but different strike prices. In a bull vertical […]
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Grantor
Concept of Grantor in Futures TradingIn this context of financial law, the following is a definition of Grantor: The maker, writer, or issuer of an option contract who, in return for the premium paid for the option, stands ready to purchase the underlying commodity (or futures contract) in the […]
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Notice of Intent to Deliver
Concept of Notice of Intent to Deliver in Futures TradingIn this context of financial law, the following is a definition of Notice of Intent to Deliver: A notice that must be presented by the seller of a futures contract to the clearing organization prior to delivery. The clearing organization […]