Finance

Month: September 2016

  • Settlement

    Concept of Settlement in Futures TradingIn this context of financial law, the following is a definition of Settlement: The act of fulfilling the delivery requirements of the futures contract.

  • Black-Scholes Model

    Concept of Black-Scholes Model in Futures TradingIn this context of financial law, the following is a definition of Black-Scholes Model: An option pricing model initially developed by Fischer Black and Myron Scholes for securities options and later refined by Black for options on futures.

  • Time Spread

    Concept of Horizontal Spread (also called Time Spread or Calendar Spread) in Futures TradingIn this context of financial law, the following is a definition of Horizontal Spread (also called Time Spread or Calendar Spread): An option spread involving the simultaneous purchase and sale of options […]

  • Heavy

    Concept of Heavy in Futures TradingIn this context of financial law, the following is a definition of Heavy: A market in which prices are demonstrating either an inability to advance or a slight tendency to decline.

  • Front Month

    Concept of Front Month in Futures TradingIn this context of financial law, the following is a definition of Front Month: The spot or nearby delivery month, the nearest traded contract month. See Back Month.

  • Contract

    Concept of Contract in Futures TradingIn this context of financial law, the following are some alternative definitions of Contract: (a) A term of reference describing a unit of trading for a commodity future or option or other derivative; (b) an agreement to buy or sell a specified commodity, […]

  • Spark Spread

    Concept of Spark Spread in Futures TradingIn this context of financial law, the following is a definition of Spark Spread: The differential between the price of electricity and the price of natural gas or other fuel used to generate electricity, expressed in equivalent units. See Gross […]

  • Clearing Member

    Concept of Clearing Member in Futures TradingIn this context of financial law, the following is a definition of Clearing Member: A member of a clearing organization. All trades of a non-clearing member must be processed and eventually settled through a clearing member.

  • Location

    Concept of Location in Futures TradingIn this context of financial law, the following is a definition of Location: A Delivery Point for a futures contract.

  • Dominant Future

    Concept of Dominant Future in Futures TradingIn this context of financial law, the following is a definition of Dominant Future: The futures contract having the largest amount of open interest.

  • Terminal Elevator

    Concept of Terminal Elevator in Futures TradingIn this context of financial law, the following is a definition of Terminal Elevator: An elevator located at a point of greatest accumulation in the movement of agricultural products that stores the commodity or moves it to processors.

  • Equity Swap

    Concept of Equity Swap in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A derivative (i.e. an instrument that transfers risk from one party to the other) contract where payments are linked to the change in value of an underlying equity, […]

  • Commodity

    Concept of Commodity in Futures TradingIn this context of financial law, the following are some alternative definitions of Commodity: (a) A commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated in Section 1a(9) of the Commodity Exchange Act, 7 USC […]

  • Determining Party

    Concept of Determining Party in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): In the event of a cancellation as a result of an extraordinary event, a payment (cancellation amount) needs to be determined. As the determining party is […]

  • Cds Index

    Cds Index TrancheConcept of Cds Index Tranche in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A synthetic collateralized debt obligation (CDO) based on a CDS index where each tranche (equity, mezzanine, senior, and super senior) references […]