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.
Scalper
A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.
Segregated Account
A special account used to hold and separate customer's assets from those of the broker or firm.
Self-Regulatory Organization (SRO)
Self-regulatory organizations (i.e., the futures exchanges and National Futures Association) enforce minimum
financial and sales practice requirements for their members.
Sell Also Designated Self-Regulatory Organization.
Settlement Price
The last price paid for a futures contract on any trading day. Settlement prices are used to determine open trade
equity, margin calls and invoice prices for deliveries.
Short
One who has sold futures contracts or plans to purchase a cash commodity (e.g., a food processor).
Speculator
A market participant who tries to profit from buying and selling futures and options contracts by anticipating
future price movements. Speculators assume market price risk and add liquidity and capital to the futures markets.
Spot
Usually refers to a cash market price for a physical commodity that is available for immediate delivery.
Spot Month
See Nearby Delivery Month.
Spreading
The simultaneous buying and selling of two related markets or commodities in the expectation that a profit
will be made when the position is offset.
Stop Order
An order that becomes a market order when the futures contract reaches a particular price level. A sell stop
is placed below the market, a buy stop is placed above the market.
Strike Price
The price at which the buyer of a call (put) option may choose to exercise his right to purchase (sell)
the underlying futures contract. Also called Exercise Price.
Swap
In general, the exchange of one asset or liability for a similar asset or liability for the purpose of
lengthening or shortening maturities, or raising or lowering coupon rates, to maximize revenue or minimize financing costs.
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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