Month: March 2016
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Limit Move
ResourcesSee AlsoLocked Limit Futures Trading Consumer Protection Consumer Finance
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Leveraged Loan
Leveraged Loan credit default swap (Cds)Concept of Leveraged Loan credit default swap (Cds) in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A credit default swap (a contract designed to transfer the credit exposure of debt obligation […]
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Congestion
Concept of Congestion in Futures TradingIn this context of financial law, the following are some alternative definitions of Congestion: (a) A market situation in which shorts attempting to cover their positions are unable to find an adequate supply of contracts provided by longs willing to […]
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Pre-backload
Concept of Pre-backload in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The ‘ETL’ (Extract, Transform and Load) process undertaken by firms to clean-up and reconcile a portfolio of OTC (over the counter) derivative (i.e. an instrument that […]
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Delivery Notice
Concept of Delivery Notice in Futures TradingIn this context of financial law, the following is a definition of Delivery Notice: The written notice given by the seller of his intention to make delivery against an open short futures position on a particular date. This notice, delivered through […]
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Net Position
Concept of Net Position in Futures TradingIn this context of financial law, the following is a definition of Net Position: The difference between the open long contracts and the open short contracts held by a trader in any one commodity.
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Lookalike Swap
Concept of Lookalike Swap in Futures TradingIn this context of financial law, the following is a definition of Lookalike Swap: An over-the-counter swap that is cash settled based on the settlement price of a similar exchange-traded futures contract on a specified trading day.
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Collateral
Independent Amount / Initial MarginConcept of Independent Amount / Initial Margin in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An additional collateral that is requested over and above the mark to market of a trade or portfolio of trades […]
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Out-Of-The-Money
Concept of Out-Of-The-Money in Futures TradingIn this context of financial law, the following is a definition of Out-Of-The-Money: A term used to describe an option that has no intrinsic value. For example, a call with a strike price of $400 on gold trading at $390 is out-of-the-money 10 dollars.
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Mini
Concept of Mini in Futures TradingIn this context of financial law, the following is a definition of Mini: Refers to a futures contract that has a smaller contract size than an otherwise identical futures contract.
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Exercise Price
Concept of Exercise Price (Strike Price) in Futures TradingIn this context of financial law, the following is a definition of Exercise Price (Strike Price): The price, specified in the option contract, at which the underlying futures contract, security, or commodity will move from seller to buyer.
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Dodd-Frank Act
Concept of Dodd-Frank Act in Futures TradingIn this context of the United States financial law, the following is a definition of Dodd-Frank Act: The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on July 21, 2010. Title VII of the Dodd-Frank Act amends the Commodity […]
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Variance Swap
Concept of Variance Swap in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A forward that uses the variance (being the volatility squared) of an underlying’s price movement over a period as the basis for the payoff calculation.ResourcesSee […]
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Counterparty Risk
Concept of Counterparty Risk in Futures TradingIn this context of financial law, the following is a definition of Counterparty Risk: The risk associated with the financial stability of the party with whom one has entered into contract. Forward contracts impose upon each party the risk that the […]
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Interest Shortfall
Concept of Interest Shortfall in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The payment from the seller to buyer compensating for any reduced coupon payment on the underlying bond on a PAUG swap. If the reduced coupon is subsequently made […]