Commodity exchange

Commodity exchange

Industry: Financial services

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Commodity exchange

Trade option

Financial services; Commodity exchange

A commodity option transaction in which the taker is reasonably believed by the writer to be engaged in business involving use of that commodity or a related commodity.

Ring

Financial services; Commodity exchange

A circular area on the trading floor of an exchange where traders and brokers stand while executing futures trades. Some exchanges use pits rather than rings.

Positive carry

Financial services; Commodity exchange

The cost of financing a financial instrument (the short-term rate of interest), where the cost is less than the current return of the financial instrument.

Point

Financial services; Commodity exchange

A measure of price change equal to 1/100 of one cent in most futures traded in decimal units. In grains, it is of one cent; in T-bonds, it is one percent of par.

Rules

Financial services; Commodity exchange

The principles for governing an exchange. In some exchanges, rules are adopted by a vote of the membership, while regulations can be imposed by the governing board.

The purchase (or sale) of a large number of stocks contained in or comprising a portfolio. Originally called "program" trading when index funds and other institutional investors began to embark on ...

Speculative bubble

Financial services; Commodity exchange

A rapid, but usually short-lived, run-up in prices caused by excessive buying which is unrelated to any of the basic, underlying factors affecting the supply or demand for the commodity. Speculative ...