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Backwardation is when the current price of the underlying asset is higher than the prices traded in the futures market. Backwardation could occur as a result of higher demand for the asset now than contracts maturing in the coming months through the futures market. Traders use backwardation to profit by selling at the current price and buying at a lower futures price. E-Mini
September 25, 2022 E-mini are futures contracts traded electronically, the value of which is a fraction of the value of the corresponding standard futures contracts. Variable Price Limit
September 25, 2022 A variable price cap is a method of controlling volatility in commodity futures exchanges. Buying on Margin
September 25, 2022 Buying on margin means you are investing borrowed money. Cheapest to Deliver (CTD)
September 25, 2022 Cheapest delivery is the cheapest security that can be long in a futures contract to meet the contract specifications. Contango
September 25, 2022 Contango is a situation where the futures price of a commodity is higher than the spot price. Contract For Differences (CFD)
September 25, 2022 A Contract for Difference (CFD) is a financial contract that pays for the difference in settlement price between an open and a closed trade. Floor Trader (FT)
September 25, 2022 A trader on the trading floor is a member of the exchange who makes transactions on the trading floor of the exchange solely at his own expense. Futures Contract
September 25, 2022 Futures contracts are financial derivatives that oblige the buyer to purchase some underlying asset (or the seller to sell that asset) at a predetermined price and date in the future. Futures Market
September 25, 2022 A futures market is an exchange where futures contracts are traded by participants interested in buying or selling these derivatives. Horizontal Spread
September 25, 2022 A horizontal spread is a simultaneous long and short position in derivatives for the same underlying asset and strike price, but with different expiration dates. Hundredweight (Cwt)
September 25, 2022 centner (abbreviated as CWT) is a standard unit of weight or mass used in some commodity markets. It can also be used to determine the price of small batches of goods. Initial Margin
September 25, 2022 Initial margin is the percentage of the purchase price that must be paid in cash when using a margin account. Intercontinental Exchange (ICE)
September 25, 2022 Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity markets and exchanges. Introducing Broker (IB)
September 25, 2022 An introducing broker (IB) advises clients on the futures market, but delegates trade execution and back office operations to others. Job Lot
September 25, 2022 A job lot is a futures contract, the par value of which is less than a standard lot. Last Trading Day
September 25, 2022 The last trading day is the last day the derivative contract is traded. Typically, the last trading day is the day before the actual expiration date. Natural Gas Liquids
September 25, 2022 Natural gas liquids are components of natural gas that are released from the gaseous state as liquids. Omnibus Account
September 25, 2022 Aggregate account allows you to manage the transactions of more than one person and ensures the anonymity of the persons in the account. Open Outcry
September 25, 2022 Open protest was the main method of transmission of trading orders by stock traders. Renewable Resource
September 25, 2022 The demand for renewable resources is growing as the population grows. Resource Curse
September 25, 2022 The resource curse refers to countries that lag behind economically despite benefiting from valuable natural resources. Roll Yield
September 25, 2022 Extended yield is the income from adjusting a futures position from one futures contract to a longer-term contract. Tick Size
September 25, 2022 Tick size - the minimum change in the price increment of a trading instrument.
– Tick sizes used to be in fractions (e.g. 1/16th of $1), but today they are mostly decimal based and expressed in cents. Warehouse Financing
September 25, 2022 Warehouse financing is a way for businesses to borrow money against their inventory. Warehouse Receipt
September 25, 2022 A warehouse receipt is used in the futures markets to guarantee the quantity and quality of goods held in a warehouse.