Futures Trading Glossary
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Source: National Futures Association; published here with permission. This publication (Glossary of Futures Terms - An Introduction to the Language of the Futures Industry)
is the property of the National Futures Association.
Actuals
See Cash Commodity
Aggregation
The policy under which all futures positions owned or controlled by one trader or a group of traders are combined to determine
reportable positions and speculative limits.
Arbitrage
The simultaneous purchase and sale of similar commodities in different markets to take advantage of price discrepancy.
Arbitration
The process of settling disputes between parties by a person or persons chosen or agreed to by them. NFA's arbitration
program provides a forum for resolving futures-related disputes between NFA Members or between Members and customers.
Associated Person (AP)
An individual who solicits orders, customers or customer funds on behalf of a Futures Commission Merchant, an Introducing Broker,
a Commodity Trading Advisor or a Commodity Pool Operator and who is registered with the Commodity Futures Trading Commission.
At-the-Money-Option
An option whose strike price is equal - or approximately equal - to the current market price of the underlying futures contract.
Backwardation
A futures market in which the relationship between two delivery months of the same commodity is abnormal. The opposite of
Contango.
See also Inverted Market
Basis
The difference between the current cash price of a commodity and the furriers price of the same commodity.
Bear Market (Bear/Bearish)
A market in which prices are declining. A market participant who believes prices will move lower is called a "bear." A news
item is considered bearish if it is expected to result in lower prices.
Bid
An expression of willingness to buy a commodity at a given price; the opposite of Offer.
Board of Trade
See Contract Market
Broker
A company or individual that executes futures and options orders on behalf of financial and commercial institutions and/or
the general public.
Bucketing
Directly or indirectly taking the opposite side of a customer's order into the broker's own account or into an account in which
the broker has an interest, without open and competitive execution of the order on an exchange.
Bull Market (Bull/Bullish)
A market in which prices are rising. A market participant who believes pries will move higher is called a "bull." A news item
is considered bullish if it is expected to result in higher prices.
Source: National Futures Association; published here with permission. This publication (Glossary of Futures Terms - An Introduction to the Language of the Futures Industry)
is the property of the National Futures Association.
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