Finance

Month: May 2016

  • Cover

    Concept of Cover in Futures TradingIn this context of financial law, the following are some alternative definitions of Cover: (a) Purchasing futures to offset a short position (same as Short Covering); see Offset, Liquidation; (b) to have in hand the physical commodity when a short futures sale […]

  • Reverse Floater

    Concept of Reverse Floater in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An interest rate swap (i.e. an agreement to exchange interest rate cash flows) where the floating rate has a coupon which rises when the underlying floating rate […]

  • Marking the Close

    Concept of Marking the Close in Futures TradingIn this context of financial law, the following is a definition of Marking the Close: A manipulative or disruptive trading practice whereby a trader buys or sells a large number of futures contracts during the closing period of a futures contract […]

  • Self-Regulatory Organization

    Concept of Self-Regulatory Organization (SRO) in Futures TradingIn this context of financial law, the following is a definition of Self-Regulatory Organization (SRO): Exchanges and registered futures associations that enforce financial and sales practice requirements for their members. See […]

  • Delivery Option

    Concept of Delivery Option in Futures TradingIn this context of financial law, the following is a definition of Delivery Option: A provision of a futures contract that provides the short with flexibility in regard to timing, location, quantity, or quality in the delivery process.

  • Note

    Concept of Note in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A short-term debt instrument (for example with a maturity of between one and ten years) whereby the issuer agrees to make periodic payments and/or deliveries to the buyer in […]

  • Principal

    Principal in the Context of Mortgage RefinancingsIn this context, a definition of Principal may be distilled, worded as follows: The amount of money borrowed or the amount still owed on a loan.

  • Class

    Concept of Class (of options) in Futures TradingIn this context of financial law, the following is a definition of Class (of options): Options of the same type (i.e., either puts or calls, but not both) covering the same underlying futures contract or other asset (e.g., a March call with a […]

  • Cross Rate

    Concept of Cross Rate in Futures TradingIn this context of financial law, the following is a definition of Cross Rate: In foreign exchange, the price of one currency in terms of another currency in the market of a third country. For example, the exchange rate between Japanese yen and Euros […]

  • Good This Week Order

    Concept of Good This Week Order (GTW) in Futures TradingIn this context of financial law, the following is a definition of Good This Week Order (GTW): Order which is valid only for the week in which it is placed.

  • Interest Rate

    Interest Rate in the Context of Mortgage RefinancingsIn this context, a definition of Interest Rate may be distilled, worded as follows: The price paid for borrowing money, usually stated in percentages and as an annual rate.

  • Back Pricing

    Concept of Back pricing in Futures TradingIn this context of financial law, the following is a definition of Back pricing: Fixing the price of a commodity for which the commitment to purchase has been made in advance. The buyer can fix the price relative to any monthly or periodic delivery […]

  • Scale Down

    Concept of Scale Down (or Up) in Futures TradingIn this context of financial law, the following is a definition of Scale Down (or Up): To purchase or sell a scale down means to buy or sell at regular price intervals in a declining market. To buy or sell on scale up means to buy or…

  • Credit Rating

    Concept of Credit Rating in Futures TradingIn this context of financial law, the following is a definition of Credit Rating: A rating determined by a rating agency that indicates the agency’s opinion of the likelihood that a borrower such as a corporation or sovereign nation will be able to […]

  • Intrinsic Value

    Concept of Intrinsic Value in Futures TradingIn this context of financial law, the following is a definition of Intrinsic Value: A measure of the value of an option or a warrant if immediately exercised, that is, the extent to which it is in-the-money. The amount by which the current price for […]