A comprehensive reference for key terminology used across commodity, futures, and options markets. Use the alphabetical accordion below to explore definitions by category.
Account Equity: The net worth of a futures account as determined by combining the ledger balance with any unrealized gain or loss in open positions as marked to the market.
Account Executive: The agent of an FCM who serves customers/traders by entering their commodity futures and options orders, reporting trade executions, advising on trading strategies, etc.
Active Month: Usually the most active contract month, often closest to delivery.
ACT or CEA: The term “ACT” or “CEA” means the Commodity Exchange Act, as amended from time to time.
Actuals: The physical commodity being bought or sold (e.g., soybeans, corn, gold, treasury bonds).
Adjusted Futures Price: The cash-price equivalent reflected in the current futures price; calculated by the futures price times the conversion factor for the instrument being delivered.
Against Actuals: Exchange of futures for cash positions between two hedgers; also called “Exchange for Physicals (EFP)” or “versus cash.”
Allocation Claim System (ACS): CME’s electronic give-up system allowing executing firms to allocate trades to designated carrying firms via the Trade Management System.
All-Or-None (AON) Order: Pit/open-outcry order executed only for its entire quantity at a single price, at or above a set threshold.
Alternative Delivery Procedure (ADP): Provision allowing delivery under alternative terms once long and short positions are matched for delivery.
American Gas Association (AGA): Major U.S. natural-gas industry trade association conducting research and setting standards; compiles benchmark statistics.
American Petroleum Institute (API): Primary U.S. oil industry trade group; sets standards and compiles benchmark statistics.
American Society for Testing and Materials (ASTM): Establishes grade/quality specifications for petroleum products and metals.
American-Style Option: Option exercisable on any trading day up to and including expiration.
API Gravity: API scale expressing relative density of crude oil; higher degrees = lighter (often more valuable) crude.
Application Program Interface (API): Prescribed method for one software program to communicate with an OS or another program.
Backbone: Network used to interconnect several networks together.
Back Months: Futures/options months further from expiration than the nearby; also called deferred/distant months.
Backspreads: Selling one or more at-the-money options and buying a larger number of out-of-the-money options.
Backwardation: Futures prices lower in succeeding delivery months (inverted market); opposite of contango.
Balance of Trade: Difference between a country’s imports and exports.
Bar Chart: Graph of prices/volume/open interest over time (e.g., daily bars show open, high, low, settle).
Barrel: Volume unit for petroleum/refined products; 1 barrel = 42 U.S. gallons.
Barrels Per Day (BPD): Flow measure for crude/product production or consumption per day.
Baseload: Minimum electric power required/delivered over a period at a steady rate.
Base Metals: Copper, aluminum, lead, nickel, tin—oxidize/corrode relatively easily.
Basis: Local cash price minus nearby futures price; can reflect time, form, quality, and location differences.
Basis Point: One-hundredth (0.01) of a percentage point.
Basis Risk: Risk that the cash-futures spread will change between hedge initiation and liquidation.
Batch: Measured amount of crude/products moved through a pipeline.
BCF: Billion cubic feet; gas capacity/supply measure.
Bear: Market participant expecting prices to fall.
Bear Market: Market in which prices are declining.
Bear Spread (Futures): Sell nearby / buy deferred to profit from changes in the calendar spread.
Bear Spread (Options): Bear call (sell lower-strike call/buy higher-strike call) or bear put (sell lower-strike put/buy higher-strike put) vertical spread.
Beta: Asset’s return sensitivity to a factor/index (e.g., vs. stock market).
Bid Price: Offer to buy a specific quantity at a stated price.
Call Option: Right, not obligation, to buy a futures contract at a specified strike within a specified time.
Crop (Marketing) Year: Time span from harvest to harvest for ag commodities (e.g., soybeans: Sept 1–Aug 31).
Crop Reports: USDA reports on planted acreage, yields, production, and comparisons to prior years.
Cross Hedging: Hedging a cash commodity using a related futures when no direct contract exists.
Cross Margining: Reduction in margin requirements due to offsetting positions cleared by same/affiliated members.
Cross Rate: Exchange rate between two non-home currencies (e.g., EUR/JPY quoted in the U.S.).
Crude Oil: Liquid hydrocarbons from reservoirs; refined into gasoline, distillate, jet fuel, propane, petrochemicals, etc.
Curran Approximation Option Pricing Model: Model for Asian-style options using log-normal assumptions.
Crush Spread: Simultaneous long soybeans / short meal & oil to establish processing margin.
Current Delivery Month (Spot Month): Contract that matures/becomes deliverable in the present/closest month.
Current Yield (Bonds): Annual coupon divided by market price; > coupon if bought at discount.
Daily Trading Limits: Max price range per session as set by the exchange.
Day: Order that is canceled if not filled by the end of the Globex trade date.
Day Order: Order active for that trading day only; does not carry to the next trade date.
Day Trading: Opening and offsetting positions within the same day, ending flat.
Debit Spread: Option spread with a net premium paid (net debit).
Electric Utility: Enterprise generating/transmitting/distributing electricity for public use within a designated service area (investor-owned, public, cooperative, and government-owned entities).
Electronic Trading: Computerized system for order entry, quote posting, and execution (e.g., CME Globex).
Emergency: An occurrence/circumstance that in the Exchange’s opinion requires immediate action and threatens fair/ orderly trading, clearing, delivery, or liquidation.
Ending Stocks: Amount of a storable commodity remaining at the end of a year.
Equilibrium Price: Price where quantity demanded equals quantity supplied.
Equity: (1) Cash-market equity; (2) Net value of a commodity account (ledger balance plus unrealized P&L).
Equity Index: Measure of a group of stocks used to analyze market/portfolio returns.
Euribor (Euro Interbank Offered Rate): Average interest rate at which euro interbank term deposits are offered between prime banks.
Eurodollars: U.S. dollars on deposit outside the U.S. (foreign banks or U.S. bank subsidiaries abroad).
European Central Bank: Central bank of the euro area; governs monetary policy for EMU member countries.
European-Style Option: Option exercisable only on expiration date.
European Terms: Exchange-rate quoting method as foreign currency units per U.S. dollar.
Excess Margin: Dollar amount by which equity exceeds margin requirements.
Exchange / Exchange Certified Stocks / EFP / EFR / EFS / Exchange of Futures for Cash / EOO / ETFs: Core exchange terms covering markets, certified stocks, and permitted privately negotiated transactions (EFP/EFR/EFS/EOO), plus exchange-traded funds.
Execution: Completion of an order to buy or sell a futures contract.
Exercise / Exercise Notice / Exercise (or Strike) Price: Exercising options to create futures positions; related notice and strike/ exercise price definitions.
Exhaustion Gap: Price gap near the top/bottom of a move that may signal a reversal.
Expiration: Last trading day for a futures contract.
Fair Value (Futures): Most frequently used with stock-index futures; the equilibrium price equals the spot index adjusted for compounded interest and dividends not received while holding futures.
Fair Value (Options): The market price of an option in line with its theoretical value as predicted by an option-pricing model.
Fast Market: A period of unusually hectic trading conditions.
FCM (Futures Commission Merchant): See “Futures Commission Merchant.”
Federal Funds: Bank reserves at the U.S. Federal Reserve, traded overnight between institutions with excess and deficient reserves.
Federal Funds Rate: The interest rate charged for overnight use of federal funds.
Federal Reserve System (Fed): U.S. central banking system created 1913; consists of the Board of Governors, the FOMC, and 12 regional Reserve Banks.
Feed Ratio: Relationship of livestock value to feed cost (e.g., steer-to-corn ratio).
Feedstock (Energy): Raw supply—crude oil, NGLs, or natural gas—fed into refineries or petrochemical plants.
Fill-And-Kill Order (FAK): Immediately filled in whole or part; any balance canceled.
Fill-Or-Kill Order (FOK): Canceled unless completely filled at the specified price or better.
Financial Futures: Futures based on financial instruments such as stock indexes, interest rates, or currencies.
Fuel Oil: Refined petroleum products for heating and boilers; divided into No. 2 (distillate fuel) and No. 6 (residual fuel).
Full Carrying Charge Market: Futures price differences fully reflect storage, insurance, and interest costs.
Fundamental Analysis: Study of supply-and-demand data to anticipate price trends.
Fungibility: Interchangeability of identical contracts (e.g., E-mini S&P × 5 = 1 standard S&P future).
Futures: Standardized contracts for future delivery of commodities or financial instruments on regulated exchanges.
Futures Commission Merchant (FCM): Entity registered with NFA that solicits orders for futures/options and accepts customer funds.
Futures Industry Association (FIA): Non-profit trade association representing brokerage community on industry, regulatory, and educational matters.
Futures-Equivalent: Option positions converted to futures equivalents via delta or risk factor (e.g., 10 options × 0.20 delta = 2 futures eq.).
Gamma: Change in an option’s delta for a one-unit change in the underlying futures price.
Gap: Price area where no trading occurred between sessions (breakaway, runaway, exhaustion gaps).
Gap Theory: Technical study of price gaps.
Gasoil: European term for No. 2 heating oil / diesel fuel.
Gasoline, Straight-Run: Raw gasoline distilled directly from crude; must be upgraded to meet motor-fuel specs.
Generation (Electricity): Production of electric energy by transforming other energy forms; measured in watt-hours.
GFE: Global Front-End for BrokerTec products.
Gigajoule (GJ): One billion joules ≈ 948,211 BTU (1 MM BTU = 1.0546 GJ).
Gigawatt (GW): One billion watts.
Give Up: Order executed by one clearing firm and “given up” to another for clearing; flagged GU in FIX field.
Global Command Center (GCC): CME department supporting electronic trading systems; assists in emergency order cancellations.
Globex: CME Globex electronic trading platform.
Globex Order Types: Specific order types supported per product (see Globex Reference Guide).
Globex Terminal Operator: Any person or automated system entering orders into Globex; all must be identified per Rule 576.
Globex Trading Hours: Hours designated for trading each contract on Globex.
Good Delivery: Approved metals brands acceptable for contract delivery.
Good Till Canceled (GTC): Open order remaining in force through regular and extended hours until executed, canceled, or expiry.
Good Till Date (GTD): Order remains active through the specified date unless filled or canceled.
Grade 1 Copper: ASTM B115-91 high-grade copper deliverable against COMEX contracts.
Grading Certificates: Documents verifying commodity quality.
Grain Terminal: Large elevator facility shipping grain by rail and/or barge to domestic or foreign markets.
Hedging: Taking a futures position opposite a cash position to manage price risk.
High-Frequency Trading (HFT): Automated trading using powerful computers to execute large numbers of orders in milliseconds.
Historical Volatility: Statistical measure of past price fluctuations.
Holder (Long): Buyer of an option contract.
Hybrid System: Exchange trading system combining open outcry and electronic components.
Institutional Trader: Trader acting on behalf of institutions or funds (pensions, hedge funds, mutual funds, etc.).
Instrument: A product traded on an exchange (e.g., CME S&P 500 Index future).
Integration (Energy): Degree to which a company participates in multiple stages of the petroleum industry.
Interbank Rates: Rates major banks quote each other for currency transactions.
Intercommodity (Intermarket) Spread: Spread between related commodities on same or different exchanges.
Interdelivery Spread: Purchase of one delivery month and sale of another of the same commodity on the same exchange.
Interruptible Service (Energy): Utility service subject to interruption during peak loads; offered at lower rates than firm service.
In-The-Money: Option whose strike is advantageous versus current futures price.
Intracommodity (Intramarket) Spread: Spread between different months of the same commodity (f.k.a. Interdelivery Spread).
Intrinsic Value: Difference between option strike and futures price (if in-the-money).
Introducing Broker (IB): Registered individual or firm that accepts orders for futures/options but does not handle customer funds.
Inverted Market: Futures market with abnormal month-to-month price relationship (e.g., nearby > deferred).
Invisible Supply: Stocks outside commercial channels not readily counted but available to the market.
In-Well Transfer: Inventory transfer of propane between underground storage caverns.
Jet Fuel: High-quality kerosene fuel used primarily for turbojet and turboprop aircraft engines.
Jobber: Middleman (e.g., gasoline jobber buying from refiners and reselling to distributors or consumers).
Joule: Metric unit of energy.
Kappa: Measures how an option’s theoretical value changes with a one-unit change in volatility.
Karat: Measure of gold purity — pure gold = 24 karat.
Key Reversal: Chart pattern signaling trend reversal: during an uptrend, opens above the prior close, makes a new high, then closes below the prior low (and vice-versa in a downtrend).
Kilowatt (KW): One thousand watts.
Kilowatt Hour (KWH): Electricity used by ten 100-watt bulbs for one hour (1 kW × 1 hour).
Lagging Indicators: Economic indicators that confirm, rather than predict, overall trends.
Landed Price (Energy): Total delivered cost of crude oil to a refiner, including transport and handling.
Last Intent Day: Final day notices of intent to deliver on futures contracts may be presented.
Last Inventory Day: Final day long firms must report long positions through CME Clearing.
Last Notice Day: Final day notices of intent to deliver may be issued.
Last Trading Day: Final trading day for a specific contract month.
Lead Month: The most current contract month available for delivery or cash settlement.
Leading Indicators: Statistics signaling economic direction in coming months.
Lease (Metals): Financing arrangement using contango in precious-metal markets to fund inventory.
Leg: Each component transaction of a spread or swap.
Leverage: Increasing potential returns by controlling larger positions via futures or derivatives.
Lifting (Oil): Loading petroleum cargoes at a terminal or transshipment point.
Light Crude: Crude oil with high API gravity and low density, rich in light hydrocarbons.
Matched Trade: Execution of matching buy and sell orders that complete a trade.
Maturity: Time span from first notice day to last trading day during which delivery may occur.
Maximum Price Fluctuation: Exchange-set daily price-movement limit for a contract.
MCF (Energy): Thousand cubic feet of natural gas.
Megawatt (MW): One million watts.
Megawatt Hour (MWH): Electricity used by ten thousand 100-watt bulbs for one hour (1 MW × 1 hour).
Member: Individual holding exchange membership privileges.
Member Firm: Company granted exchange membership rights.
Member Performance Bond: Minimum equity maintained per contract in a member account after initial margin deposit.
Million BTU (MMBtu): ≈ 1 MCF of natural gas; also called a Dekatherm.
Minimum Price Fluctuation (Tick): Smallest allowable price movement for a contract.
Minimum Quantity Order: Order executed only if a specified minimum size can be filled immediately.
Misclear: Incorrect matching of trades between brokers or clearing firms.
Money Supply: Total currency and deposit balances in the economy (M1, M2, M3 definitions).
Motor Gasoline (Mogas): Volatile hydrocarbon blend used as spark-ignition engine fuel.
Moving Average Chart: Graph of averaged market prices over set periods.
Moving Averages: Price-trend method averaging N days of data to identify direction.
Mutual Offset System (MOS): CME-SGX program allowing positions opened on one exchange to be closed on the other.
Naked Futures Position: Open futures position without an offsetting hedge or option.
Naked Options Position: Open option position without coverage from an offsetting futures or option position.
Naphthenes: Hydrocarbon group in crude oil used as petrochemical feedstock.
Naphtha: Volatile petroleum distillate used as solvent and gasoline blendstock.
National Futures Association (NFA): Independent self-regulatory organization for the U.S. futures industry.
National Introducing Brokers Association (NIBA): Professional organization for introducing brokers since 1991.
Natural Gas: Naturally occurring hydrocarbon mixture found in porous rocks; mainly methane.
Natural Gas Liquids (NGL): Liquids separated from natural gas (propane, butane, ethane, natural gasoline).
Nearby Month: Nearest active trading month for a futures or options contract.
Near-The-Money: Option whose strike is close to the underlying price.
Negative Yield Curve: Yield curve in which short-term rates exceed long-term rates.
Octane Number: Measure of gasoline’s resistance to engine knock.
Offer (Ask or Sell): Willingness to sell a commodity at a stated price.
Off-Peak (Energy): Hours of low electric demand outside on-peak periods.
Offset: To close an open position by taking an equal and opposite position.
Offsetting a Hedge: Buying back (or selling back) futures to close a hedge position.
Omnibus Account: Combined account of one FCM on another FCM’s books, holding multiple customers’ trades.
On-Peak (Energy): Hours of maximum electric demand (typically 6 a.m.–10 p.m.).
Open Interest: Total number of outstanding futures contracts not yet closed or delivered.
Open Market Operation: Fed purchases or sales of Treasury securities to influence liquidity.
Open Order: Unfilled order that remains active until executed or canceled.
Open Outcry: Floor-trading method of bids and offers shouted in the pit.
Open Position: Long or short position still outstanding.
Opening: Initial trading period designated by the exchange.
Opening Only Order: Order to be executed only during the official opening range.
Opening Price: Price of the first trade in a session.
Opening Range: High-low price range during the official opening period.
Option Buyer: Purchaser of an option who pays a premium.
Option Contract: Right but not obligation to buy or sell a futures contract at a specified price before expiration.
Option Premium: Price paid for an option in open competition on the exchange.
Packs: Simultaneous purchase or sale of an equally weighted consecutive series of four futures contracts quoted on an average net-change basis from the prior day’s settlement; allows multi-contract execution in one trade.
Paper Barrels: Non-physical crude-oil trade (futures, forwards, swaps) representing rights to specified grades and quantities without owning physical lots.
Par Grade: The grade specified for delivery under a futures contract; substitutions may carry premiums/discounts.
Payment-In-Kind Program: U.S. government program granting grain certificates to farmers who idle acreage under voluntary set-aside agreements.
Performance Bond: Margin deposit ensuring fulfillment of open futures and options obligations by customers, brokers, and clearing members.
Performance Bond Call: Margin call requesting additional funds to restore deposits to required levels.
Petrochemical: Intermediate chemical derived from petroleum or natural gas (e.g., ethylene, benzene, xylene).
Petroleum: Generic name for hydrocarbons including crude oil, NGLs, and refined products.
Petroleum Administration for Defense Districts (PADD): Five U.S. marketing regions where fuel prices differ by supply-demand conditions.
Physical Commodity: Tangible commodity such as corn, oil, gold, or beef that underlies a futures contract.
Pin Risk: Expiration-day risk to an option seller when the strike equals the underlying futures price (“pinned”).
Pit: Exchange floor area designated for open-outcry trading of a specific contract.
Point and Figure Chart: Charting method using Xs for price rises and Os for declines to identify breakouts.
Position: Obligation created by buying or selling a futures or options contract; long = buy, short = sell.
Primary Dealer: Bank or broker/dealer approved by the Fed to participate in Treasury auctions and open-market operations.
Primary Market: Main distribution point for producers, processors, or merchants where spot commodities concentrate for shipment.
Primary Stocks (Energy): Crude oil or refined-product inventories held in storage at refineries, processing plants, pipelines, or large terminals (≥ 50 k bbl capacity).
Prime Rate: Interest rate charged by major banks to top-tier borrowers.
Processing Plant (Energy): Facility separating natural gas into methane and other gases such as propane and butane.
Producer Price Index (PPI): BLS monthly measure of average changes in prices received by domestic producers.
Prompt Barrel (Energy): Petroleum product available within 3–4 days.
Propane: Liquefied hydrocarbon gas used for heating, cooking, and petrochemical feedstock.
Pump Over (Energy): Transfer of crude or refined product from one pipeline or tank to another.
Purchase and Sales (P&S) Statement: Record from an FCM showing contract trades, prices, and resulting profit / loss.
Purchase Date: Date a long position for delivery assignment is established on a clearing firm’s books.
Pure Hedger: Trader who simultaneously offsets futures and cash positions to lock in price.
Put Option: Option giving the holder the right – not obligation – to sell a futures contract at a specified strike price; bought to profit from price declines.
Qualifying Facility (QF): Power producer meeting FERC efficiency and ownership standards; granted QF status via filing or self-certification.
Quantity: Number of units or lots in a futures contract; also called size.
Quote: (1) Actual bid/ask or transaction price of a commodity or future; (2) Current market indication of bids and offers.
Quote Currency: Currency used to pay for a transaction.
Rally: Upward price movement following a decline.
Range: Difference between the highest and lowest prices during a set period or session.
Ratio Spread: Option strategy of buying/selling unequal numbers at different strikes for the same expiration.
Reciprocal of European Terms: Exchange-rate quote method showing U.S. dollars per foreign unit.
Reference Price: Futures price used as a benchmark for openings, algorithms, or index calculations – usually the settlement or prior close.
Refinery: Company processing crude into fuels or petrochemicals, often with wholesale/retail operations.
Reforming Process: Heat-and-catalyst process rearranging hydrocarbons to raise octane quality.
Registered Representative: Individual employed by a futures commission merchant to solicit and service accounts.
Regular Trading Hours (RTH): Exchange-designated hours for open-outcry trading.
Reporting Levels: Position sizes at which traders must report holdings daily to exchanges / CFTC.
Repurchase Agreement (Repo): Transaction where a security is sold with an agreement to repurchase later, typically in government securities.
Request for Quote (RFQ): Electronic Globex message soliciting bids/offers for specified contracts or spreads.
Reserve Requirements: Minimum cash/liquid reserves banks must hold against deposits per Fed rules.
Residual Fuel Oil: Heavy fuel from distillation residue rather than lighter fractions.
Resistance Line: Chart level where selling pressure halts price advances.
Resting Order: Limit order waiting execution away from current market.
Retender: Action allowing assigned longs (e.g., cattle futures) to re-short and pay a retender fee to avoid delivery.
Retracement: Partial price move opposite to the prevailing trend.
Reverse Crush Spread: Sale of soybeans and purchase of meal and oil futures to reverse the traditional crush.
Risk: Exposure to potential loss; dollar difference between current and liquidation price; portion of margin covering daily price change risk.
Risk Management: Identification, measurement, and mitigation of price risk.
Rollover: Closing a current-month futures position and opening one in the next month.
Round Turn: A complete trade involving both entry and exit (buy + sell or sell + buy).
Swap: Over-the-counter contract in which two parties exchange payment streams based on price, interest-rate, or currency differences; used for hedging or risk transfer.
Synthetic Call Option: Long futures + long put (synthetic long call) or short futures + short put (synthetic short call).
Synthetic Futures: Combination of put + call with identical strikes producing bullish (long) or bearish (short) futures equivalents.
Synthetic Option: Futures-and-option combination where one side is bullish and the other bearish.
Synthetic Put Option: Short futures + long call = synthetic long put; long futures + short call = synthetic short put.
Synthetic Spot: Futures-implied price adjusted by forward points to match spot-market convention.
Target Price: Expected selling / buying price factoring futures, basis, and option premiums.
Tariff (Energy): Schedule of rates charged by pipelines or utilities for transporting crude, refined products, or gas.
TAS (Trade at Settlement): Order type specifying execution at the day’s settlement price.
Technical Analysis: Price-forecasting approach using patterns of price, volume, and open interest rather than fundamentals.
Telestat: CME automated phone system allowing traders to cancel and check Globex orders via ID and PIN.
Tender (Intent): Notice of intention to deliver under a futures contract submitted to the clearinghouse.
Theoretical Value: Option value derived from pricing models given time, volatility, and rate assumptions.
Therm: 100,000 BTU (1 dekatherm = 1 million BTU).
Theta: Option-premium sensitivity to time decay (premium change per day until expiration).
Throughput (Energy): Total volume processed by a refinery or moved through a pipeline or terminal in a given period.
Tick: Minimum price fluctuation allowed for a futures or options contract.
Ticker: Scrolling exchange display showing instrument symbols and last-trade prices.
Underlying: The stock, commodity, futures contract, or cash index on which a futures or options contract is based.
Underlying Futures Contract: The futures contract that may be purchased (in the case of a call) or sold (in the case of a put) upon exercise of an option.
User-Defined Spreads: Custom spreads allowing the trader to choose specific legs when no predefined exchange spread exists.
Variation: Daily or intraday payment made by a clearing member to the clearinghouse to cover losses from adverse price movements.
Vega: Measures how an option’s premium changes for a 1 percent change in the underlying’s volatility.
Vertical Spread: Buying and selling puts or calls with the same expiration but different strike prices.
Virtual Private Network (VPN): Private data network using public infrastructure while maintaining security through tunneling and encryption protocols.
Viscosity: Measurement of a liquid’s resistance to flow; decreases as temperature rises.
Volatility: Degree of price change over a given period; a measure of market variability.
Volatility Quote: Quoting options by implied volatility instead of price; cleared using exchange pricing models.
Volume: Total number of futures or options contracts traded during a specified time.
Warehouse Receipt: Document indicating contract and storage-location details for a commodity; used to transfer ownership.
Warrant (Metals): Document of title for a specific lot of metal meeting exchange delivery standards.
West Texas Intermediate (WTI): Benchmark grade of U.S. crude oil deliverable against the NYMEX Light Sweet Crude contract.
Wet Barrel (Energy): A physical barrel of crude oil or refined product, as opposed to a paper barrel.
Wet Gas: Natural gas containing condensable hydrocarbons.
Whaley Approximation Option Pricing Model: Model for valuing American-style options under the Black-Scholes framework, incorporating early-exercise premium.
With Discretion (Disc) or Disregard the Tape (Drt): Order note allowing the broker discretion in execution.
Writer: The issuer or seller of an option contract.
Yard: Market slang term for one billion.
Yield: (1) Annual investment return expressed as a percentage; (2) Proportion of heavy or light products obtainable from a barrel of crude oil.
Yield Change: One day’s change in futures interest rates—equal and opposite to the change in settlement price.
Yield Curve: Chart plotting yields of bonds with identical credit quality across different maturities.
Yield-to-Maturity (YTM): The total return expected if a fixed-income security is held until maturity.
Z-Score (Finance): Statistical measure expressing a value’s distance from the mean in standard deviations; used for risk analysis and anomaly detection.
Full Disclaimer
The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades, statistical services, and other sources that Paradigm Futures believes to be reliable. We do not guarantee that such information is accurate or complete, and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice given will result in profitable trades.
