支撑架期货期权术语详解(英文版)

2021年1月22日发(作者：volleyball)

期货期权术语详解（英文版）
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Futures and Options Market Terminology

----------------------------- -------------------------------------------------- -







GLOSSARY TERMS (English)



INDEX



A




Across the Board

Actuals

Arbitrage

Arbitration

Ask

Assignment

At the market

At-the-money







B




Back Months

Bar chart

Basis

Bear call spread

Bear market

Bear put spread

Bear spread

Bearish

Beta

Bid

Board of trade

Board orders

Break

Break-even

Broker

Bull call spread



Bull market

Bull put spread

Bull spread

Bullish

Butterfly spread

Buy On Close

Buy On Opening

Buy stop/sell stop orders

Buyer




C




Cabinet Trade

Calendar spread

Call

Call option

Carrying charges

Carryover

Cash commodity/cash market

Cash flow

Cash forward contract

Cash market

Cash price

Cash settlement

Certificate of Deposit (CD)

Certificated stock

Charting

Churning

Clearinghouse

Clearing margin

Clearing member

Close or closing range

Commercials

Commission

Commission house

Commodity

Commodity Credit Corporation (CCC)

Commodity Futures Trading Commission (CFTC)

Commodity pool

Commodity Pool Operator (CPO)

Commodity-Product Spread

Commodity Trading Advisor (CTA)

Confirmation statement

Congestion



Contract

Contract market

Contract month

Controlled account

Contrarian Theory

Convergence

Conversion

Conversion factor

Cover

Covered position

Crack spread

Cross-Margining

Cross-hedge

Crush spread







D




Day order

Day-trader

Dealer option

Debt instruments

Deck

Deep in-the-money

Deep out-of- the-money

Default

Deferred delivery

Deferred pricing

Delivery

Delivery month

Delivery notice

Delivery point

Delta

Demand

Derivative

Diagonal spread

Direct hedge

Discount

Discount rate

Discretionary accounts

Downtrend

Drawdown









E




Economic good

Economy of scale

Efficiency

Elasticity

Equity

Eurodollar Time Deposits

Even up

Exchange

Exchange rates

Exercise

Expiration

Expiration date

Ex-pit transactions







F




Federal Reserve Board

Fill or Kill order (FOK)

Financial futures

First notice day

Floor broker

Floor trader

Forward contract

Forward pricing

Free market

Full carry

Fundamental analysis

Futures Commission Merchant (FCM)

Futures contract

Futures Industry Association (FIA)







G




Gambler

Gap

Geometric index

Give-up

Good till Cancelled (GTC)

Grantor

Guarantee Fund



Guided account







H




Hedge ratio

Hedger

Hedging

High

Holder







I




Inelasticity

Index

Inflation

Initial margin

Interest

Interest rate futures

Inter-market

In-the- money

Intra-market

Intrinsic value

Introducing Broker (IB)

Inverted market







J




K







L




Last Trading Day

Law of Demand

Law of Supply

Letter of acknowledgment

Leverage

Liability

Limit

Limit move

Limit orders



Limit Price

Limited Risk

Limited Risk Spread

Line-bar chart

Liquidate

Liquidity (liquid market)

Locals

Long

Long hedge

Long- the-basis

Low







M




Maintenance margin

Managed Account

Margin

Margin call

Market order

Market-if-touched order (MIT)

Market-share weighted index

Market-value weighted index

Mark-to- market

Maturity

Maximum price fluctuation

Minimum price fluctuation

Monthly statement

Moving average







N




Naked

Narrow-Based Index Futures

National Futures Association (NFA)

Nearby

Net position

Neutral calendar spread

Nominal price (or nominal quotation)

Normal market

Notice of intention to deliver









O




Offer

Offset

Offsetting

Offsetting positions

Omnibus account

One Cancels Other (OCO)

Open

Open interest

Open outcry

Open trade equity

Opening range

Opportunity cost

Option seller

Option contract

Order

Original margin

Out-of-the-money

Out-Trade

Overbought

Oversold







P




Pit

Pit broker

Pit trader

Point

Point and figure chart

Point balance

Pool

Portfolio

Position

Position limit

Position trader

Power of attorney

Premium

Price

Price discovery mechanism

Price limit

Price weighted index

Primary markets



Purchase and sale statement

Purchaser

Pure hedging

Put

Pyramiding







Q




Quotation







R




Rally

Range

Ratio writing

Reaction

Recovery

Registered Commodity Representative (RCR)

Regulations (CFTC)

Reparations

Reportable positions

Reporting level

Resistance

Retender

Ring

Risk Disclosure Document

Rolling hedge

Round turn







S




Scalper

Security deposit

Segregated account

Selective hedging

Sell stop order

Selling hedge

Settlement

Settlement price

Sharpe Ratio

Short



Short covering

Short hedge

Short-the-basis

Sideways

Single-Stock Futures

Special account

Speculation

Speculator

Spot

Spread

Spreading

Standard Deviation

Sterling Ratio

Stock Index Futures

Stop orders

Stopped out

Storage

Straddle

Strangle spread

Strike price

Strong basis

Summary Suspension

Supply

Support

Surplus fund

Swaps

Symbols

Synthetic position

Systematic risk







T




Technical analysis

Technician

Terms

Tick

Time Value

Trading range

Trend







U






Underlying futures contract

Unsystematic risk

Uptrend







V




Value

Variable limits

Variation margin call

Vertical spreads

Volatile

Volume







W




Wash sales

Wasting asset

Weak basis

Writer







X




Y




Yield







Z







----------------------------------------- --------------------------------------




Across
the
board:
All
the
months
of
a
particular
futures
contract
or
futures
option contract, for example, if all the copper contracts open limit up, they were
limit up




Actuals:
The
physical
or
cash
commodity,
which
is
different
from
a
futures
contract. See Cash commodity.




Arbitrage:
The
purchase
of
a
commodity
against
the
simultaneous
sale
of
a
commodity to profit from unequal prices. The two transactions may take place


on
different
exchanges,
between
two
different
commodities,
in
different
delivery months, or between the cash and futures markets. See Spreading.




Arbitration:
The
procedure
available
to
customers
for
the
settlement
of
disputes.
Brokers
and
exchange
members
are
required
to
participate
in
arbitration
to
settle
disputes.
Arbitration
is
available
through
the
exchanges,
the NFA, and the CFTC.




Ask:
Also
called
“asking
price”
or
“offer.”
It’s
the
price
at
which
the
seller
is
willing to sell his/her futures contract (asset).




Assignment: Options are exercised through the option purchaser's broker, who
notifies
the
clearinghouse
of
the
option's
exercise.
The
clearinghouse
then
notifies the option seller that the buyer has exercised. When futures options
are exercised, the buyer of a call is assigned a long futures contract, and the
seller
receives
the
corresponding
short.
Conversely,
the
buyer
of
a
put
is
assigned a short futures contract upon exercise, while the seller receives the
corresponding long.




At
the
market: When
issued, this order is to
buy
or sell
a futures or options
contract as soon as possible at the best possible price. See Market order.




At-the-money:
An
option
is
at-the-money
when
its
strike
price
is
equal,
or
approximately
equal,
to
the
current
market
price
of
the
underlying
futures
contract.




Back Mon
ths: Also known as “back contracts” are the futures or futures options
contracts that are the farthest from delivery/expiration.




Bar chart: A graphic representation of price movement disclosing the high, low,
close, and sometimes the opening prices for the day. A vertical line is drawn to
correspond with the price range for the day, while a horizontal
the left reveals the opening price, and a tick to the right indicates the closing
price.
After
days
of
charting,
patterns
start
to
emerge,
which
technicians
interpret for their price predictions.




Basis:
The
difference
between
the
cash
price
and
the
futures
price
of
a
commodity.
CASH
-
FUTURES
=
BASIS.
Basis
also
is
used
to
refer
to
the
difference between prices at different markets or between different commodity
grades.




Bear call
spread: The
purchase of
a
call
with
a
high
strike
price against
the
sale of a call with a lower strike price. The maximum profit receivable is the net
premium
received
(premium
received
-
premium
paid),
while
the
maximum


loss is calculated by subtracting the net premium received from the difference
between the high strike price and the low strike price (high strike price
- low
strike price net premium received). A bear call spread should be entered when
lower prices are expected. It is a type of vertical spread.




Bear market (bear/bearish): When prices are declining, the market is said to be
a
believed to bring with them lower prices are considered




Bear put spread: The purchase of a put with a high strike price against the sale
of
a
put
with
a
lower
strike
price
in
expectation
of
declining
prices.
The
maximum profit is calculated as follows: (high strike price - low strike price) -
net
premium
received
where
net
premium
received
=
premiums
paid
-
premiums received.




Bear spread: Sale of a near month futures contract against the purchase of a
deferred month futures
contract
in
expectation of
a
price
decline
in
the
near
month
relative
to
the
more
distant
month.
Example:
selling
a
December
contract and buying the more distant March contract.




Bearish: When market prices tend to go lower, the market is said to be bearish.
Someone who expects prices to trend lower is




Beta:
A
measure
correlating
stock
price
movement
to
the
movement
of
an
index.
Beta
is used
to
determine
the
number of
contracts
required
to
hedge
with stock index futures or futures options.




Bid: The request to buy a futures contract at a specified price; the opposite of
offer.




Board
of
trade:
An
exchange
or
association
of
persons
participating
in
the
business
of
buying
or
selling
any
commodity
or
receiving
it
for
sale
on
consignment. Generally, an exchange where commodity futures and/or futures
options are traded. See also Contract market and Exchange.




Board orders: See Market if touched order.




Break: A sudden price move; prices may break up or down.




Break-even:
Refers
to
a
price
at
which
an
option's
cost
is
equal
to
the
proceeds
acquired
by
exercising
the
option.
The
buyer
of
a
call
pays
a
premium. His break- even point is calculated by adding the premium paid to the
call's strike price. For example, if you purchase a May 58 cotton call for 2.25
￠

per pound when May cotton futures are at 59.48
￠
/lb., the break-even price is


60.25
￠
/lb.
(58.00
￠
/lb.
+
2.25
￠
/lb.
=
60.25
￠
/lb.).
For
a
put
purchaser,
the
break-even point is calculated by subtracting the premium paid from the put's
strike price. Please note that, for puts, you do not exercise unless the futures
price is below the break-even point.




Broker: An agent who executes trades (buy or sell orders) for customers. He
receives
a
commission
for
these
services.
Other
terms
used
to
describe
a
broker
include:
a)
Account
Executive
(AE),
b)
Associated
Person
(AP),
c)
Registered Commodity Representative (RCR), d) NFA Associate.






Bull call spread: The purchase of a call with a low strike price against the sale
of a call with a higher strike price; prices are expected to rise. The maximum
potential profit is calculated as follows: (high strike price - low strike price) - net
premium cost, where net premium cost = premiums paid - premiums received.
The maximum possible loss is the net premium cost.




Bull
market
(bull/bullish): When
prices
are
rising,
the
market
is
said
to
be
a

Situations arising which are expected to bring higher prices are called




Bull put spread: The purchase of a put with a low strike price against the sale
of a call with a higher strike price; prices are expected to rise. The maximum
potential
profit
equals
the
net
premium
received.
The
maximum
loss
is
calculated
as
follows:
(high
strike
price
-
low
strike
price)
-
net
premium
received where net premium received = premiums paid - premiums received.




Bull spread: The purchase of near month futures contracts against the sale of
deferred
month
futures
contracts
in
expectation
of
a
price
rise
in
the
near
month relative to the deferred. One type of bull spread, the limited risk spread,
is placed only when the market is near full carrying charges. See Limited risk
spread.




Bullish: A tendency for prices to move up.




Butterfly
spread:
Established
by
buying
an
at-the-money
option,
selling
2
out-of-the money options, and buying an out-of-the money option. A butterfly is
entered anytime a credit can be received; i.e., the premiums received are more
than those paid.




Buy
On
Close:
The
“close”
is
the
last
two
(depending
on
the
exchange)
minutes of the trading day. During the close there is a range of prices known as
the closing range. To “buy on close” means that you buy during the close.




Buy On Opening: The “open” or “opening” is the first two (depending on the


exchange) minutes of the trading day. During the opening, there is a range of
prices known as he opening range. To “buy on opening” means that you buy
during the opening.




Buy stop/sell stop orders: See Stop orders.




Buyer:
Anyone
who
enters
the
market
to
purchase
a
good
or
service.
For
futures, a buyer can be establishing a new position by purchasing a contract
(going long), or liquidating an existing short position. Puts and calls can also be
bought,
giving
the
buyer
the
right
to
purchase
or
sell
an
underlying
futures
contract at a set price within a certain period of time.




Cabinet
Trade
or
cab:
A
trade
at
a
half
tick
used
to
liquidate
deep
out-of-the-money options.




Calendar spread: The sale of an option with a nearby expiration against the
purchase of an option with the same strike price, but a more distant expiration.
The loss is limited to the net premium paid, while the maximum profit possible
depends on the time value of the distant option when the nearby expires. The
strategy takes advantage of time value differentials during periods of relatively
flat prices.




Call:
The
period
at
market
opening
or
closing
during
which
futures
contract
prices are established by auction.




Call option: A contract giving the buyer the right to purchase something within
a
certain period of
time
at
a
specified
price.
The
seller receives
money
(the
premium)
for
the
sale
of
this
right.
The
contract
also
obligates
the
seller
to
deliver, if the buyer exercises his right to purchase.




Carrying
charges:
The
cost
of
storing
a
physical
commodity,
consisting
of
interest
on
the
invested
funds,
insurance,
storage
fees,
and
other
incidental
costs.
Carrying
costs
are
usually
reflected
in
the
difference
between
futures
prices for different delivery months. When futures prices for deferred contract
maturities are higher than for nearby maturities, it is a carrying charge market.
A full carrying charge market reimburses the owner of the physical commodity
for its storage until the delivery date.




Carryover: The portion of existing supplies remaining from a prior production
period.




Cash commodity/cash market: The actual or physical commodity. The market
in which the physical commodity is traded, as opposed to the futures market,
where contracts for future delivery of the physical commodity are traded. See


also Actuals.




Cash flow: The cash receipts and payments of a business. This differs from net
income after taxes in that non-cash expenses are not included in a cash flow
statement. If more cash comes in than goes out, there is a positive cash flow,
while more outgoing cash causes a negative cash flow.




Cash forward contract: See Forward contract.




Cash market: A market in which goods are purchased either immediately for
cash,
as
in
a
cash
and
carry
contract,
or
where
they
are
contracted
for
presently,
with
delivery
occurring
at
the
time
of
payment.
All
terms
of
the
contract are negotiated between the buyer and seller.




Cash
price:
The
cost
of
a
good
or
service
when
purchased
for
cash.
In
commodity trading, the cash price is the cost of buying the physical commodity
on
the
current
day
in
the
spot
market,
rather
than
buying
contracts
in
the
futures market.




Cash settlement: Instead of having the actuals delivered, cash is transferred
upon settlement.




Certificate of Deposit (CD): A large time deposit with a bank, having a specific
maturity date and yield stated on the certificate. CDs usually are issued with
$$100,000 to $$1,000,000 face values.




Certificated stock: Stocks of a physical commodity that have been inspected by
the exchange
and found
to
be
acceptable for delivery
on
a futures
contract.
They are stored at designated delivery points.




Charting: When technicians analyze the futures markets, they employ graphs
and
charts
to
plot
the
price
movements,
volume,
open
interest,
or
other
statistical indicators of price movement. See also Technical analysis and Bar
chart.




Churning: When a broker engages in excessive trading to derive a profit from
commissions while ignoring his client's best interests.




Clearing margin: Funds deposited by a futures commission merchant with its
clearing member.




Clearing
member:
A
clearinghouse
member
responsible
for
executing
client
trades. Clearing members also monitor the financial capability of their clients
by requiring sufficient margins and position reports.






Clearinghouse: An agency associated with an exchange which guarantees all
trades,
thus
assuring
contract
delivery
and/or
financial
settlement.
The
clearinghouse
becomes
the
buyer
for
every
seller,
and
the
seller
for
every
buyer.




Close or closing range: The range of prices found during the last two minutes
of trading. The average price during the
from which the allowable trading range is set for the following day.




Commercials: Firms that are actively hedging their cash grain positions in the
futures markets; e.g., millers, exporters, and elevators.




Commission:
The
fee
which
clearing-houses
charge
their
clients
to
buy
and
sell
futures
and
futures
options
contracts.
The
fee
that
brokers
charge
their
clients is also called a commission.




Commission house: Another term used to describe brokerage firms because
they earn their living by charging commissions. See also Futures Commission
Merchant.




Commodity:
A
good
or
item
of
trade
or
commerce.
Goods
tradable
on
an
exchange, such as corn, gold, or hogs, as distinguished from instruments or
other intangibles like T-Bills or stock indexes.




Commodity
Credit
Corporation
(CCC):
A
government-owned
corporation
established in 1933 to support prices through purchases of excess crops, to
control
supply
through
acreage
reduction
programs,
and
to
devise
export
programs.




Commodity Futures Trading Commission (CFTC): A federal regulatory agency
established in 1974 to administer the Commodity Exchange Act. This agency
monitors
the
futures
and
futures
options
markets
through
the
exchanges,
futures commission merchants and their agents, floor brokers, and customers
who use the markets for either commercial or investment purposes.




Commodity
pool:
A
venture
where
several
persons
contribute funds
to
trade
futures or futures options. A commodity pool is not to be confused with a joint
account.




Commodity
Pool
Operator
(CPO):
An
individual
or
firm
who
accepts
funds,
securities, or property for trading commodity futures contracts, and combines
customer funds into pools. The larger the account, or pool, the more staying
power the CPO and his clients have. They may be able to last through a dip in


prices until the position becomes profitable. CPOs must register with the CFTC
and NFA, and are closely regulated.




Commodity-product
spread:
The
simultaneous
purchase
(or
sale)
of
a
commodity
and
the
sale
(or
purchase)
of
the
products
derived
from
that
commodity; for example, buying soybeans and selling soybean oil and meal.
This is known as a crush spread. Another example is the crack spread, where
the crude oil is purchased and gasoline and heating oil are sold.




Commodity
Trading
Advisor
(CTA):
An
individual
or
firm
who
directly
or
indirectly
advises
others
about
buying
or
selling
futures
or
futures
options.
Analyses, reports, or newsletters concerning futures may be issued by a CTA;
he may also engage in placing trades for other people's accounts. CTAs are
required to be registered with the CFTC and to belong to the NFA.




Confirmation statement: After a futures or options position has been initiated, a
statement
must
be
issued
to
the
customer
by
the
commission
house.
The
statement contains the number of contracts bought or sold, and the prices at
which the transactions occurred, and is sometimes combined with a purchase
and sale statement.




Congestion:
A
charting
term
used
to
describe
an
area
of
sideways
price
movement. Such a range is thought to provide support or resistance to price
action.




Contract:
A
legally
enforceable
agreement
between
two
or
more
parties
for
performing, or refraining from performing, some specified act; e.g., delivering
5,000 bushels of corn at a specified grade, time, place, and price.




Contract
market:
Designated
by
the
CFTC,
a
contract
market
is
a
board
of
trade
set
up
to
trade
futures
or
option
contracts,
and
generally
means
any
exchange on which futures are traded. See Board of trade and Exchange.




Contract
month:
The
month
in
which
a
contract
comes
due
for
delivery
according to the futures contract terms.




Controlled account: See Discretionary accounts.




Contrarian
theory:
A
theory
suggesting
that
the
general
consensus
about
trends is wrong. The contrarian takes the opposite position from the majority
opinion to capitalize on overbought or oversold situations.




Convergence: The coming together of futures prices and cash market prices
on the last trading day of a futures contract.






Conversion: The sale of a cash position and investment of part of the proceeds
in the margin for a long futures position. The remaining money is placed in an
interest- bearing instrument. This practice allows the investor/dealer to receive
high rates of interest, and take delivery of the commodity if needed.




Conversion factor:
A figure
published
by
the
CBOT used
to adjust
a
T-Bond
hedge for the difference in maturity between the T-Bond contract specifications
and the T-Bonds being hedged.




Cover:
Used
to
indicate
the
repurchase
of
previously
sold
contracts
as,
he
covered
his
short
position.
Short
covering
is
synonymous
with
liquidating
a
short position or evening up a short position.




Covered
position:
A
transaction
which
has
been
offset
with
an
opposite
and
equal transaction; for example, if a gold futures contract had been purchased,
and later a call option for the same commodity amount and delivery date was
sold,
the
trader's
option
position
is

He
holds
the
futures
contract
deliverable on the option if it is exercised. Also used to indicate the repurchase
of previously sold contracts as, he covered his short position.




Crack spread: A type of commodity-product spread involving the purchase of
crude oil futures and the sale of gasoline and heating oil futures.




Cross-Margining: The practice employed when related positions are cleared by
different
clearinghouses.
For
example,
someone may
hold a
position
in
IBM
stock, a single stock futures contract on IBM, and an option on IBM stock. This
lends the account to cross- margining.




Cross-hedge: A hedger's cash commodity and the commodities traded on an
exchange
are
not
always
of
the
same
type,
quality,
or
grade.
Therefore,
a
hedger
may
have
to
select
a
similar
commodity
(one
with
similar
price
movement) for his hedge. This is known as a




Crush
spread:
A
type
of
commodity- product
spread
which
involves
the
purchase of soybean futures and the sale of soybean oil and soybean meal
futures.




Day order: An order which, if not executed during the trading session the day it
is
entered,
automatically
expires
at
the
end
of
the
session.
All
orders
are
assumed to be day orders unless specified otherwise.




Day-trader: Futures or options traders (often active on the trading floor) who
usually initiate and offset position during a single trading session.






Dealer option: A put or call on a physical good written by a firm dealing in the
underlying
cash
commodity.
A
dealer
option
does
not
originate
on,
nor
is
it
subject to the rules of an exchange.




Debt instruments: 1) Generally, legal IOUs created when one person borrows
money from (becomes indebted to) another person; 2) Any commercial paper,
bank CDs, bills, bonds, etc.; 3) A document evidencing a loan or debt. Debt
instruments such as T-Bills and T-Bonds are traded on the CME and CBOT,
respectively.




Deck:
All
orders
in
a
floor
broker's
possession
that
have
not
yet
been
executed.




Deep
in-the-money:
An
option
is

in-the
money
when
it
is
so
far
in-the-money that it is unlikely to go out-of-the-money prior to expiration. It is
an
arbitrary
term
and
can
be
used
to
describe
different
options
by
different
people.




Deep
out-of-the-money:
Used
to
describe
an
option
that
is
unlikely
to
go
into-the-money prior to expiration. An arbitrary term.




Default: Failure to meet a margin call or to make or take delivery. The failure to
perform on a futures contract as required by exchange rules.




Deferred delivery: Futures trading in distant delivery months.




Deferred
pricing:
A
method
of
pricing
where
a
producer sells
his commodity
now and buys a futures contract to benefit from an expected price increase.
Although some people call this hedging, the producer is actually speculating
that he can make more money by selling the cash commodity and buying a
futures
contract
than
by
storing
the
commodity
and
selling
it
later.
(If
the
commodity has been sold, what could he be hedging against?)




Delivery:
The
transportation
of
a
physical
commodity
(actuals
or
cash)
to
a
specified destination in fulfillment of a futures contract.




Delivery
month:
The
month
during
which
a
futures
contract
expires,
and
delivery is made on that contract.




Delivery notice: Notification of delivery by the clearinghouse to the buyer. Such
notice is initiated by the seller in the form of a




Delivery
point:
The
location
approved
by
an
exchange
for
tendering
and


accepting goods deliverable according to the terms of a futures contract.




Delta:
The
correlation
factor
between
a
futures
price
fluctuation
and
the
change in premium for the option on that futures contract. Delta changes from
moment to moment as the option premium changes.




Demand:
The
desire
to
purchase
economic
goods
or
services
(and
the
financial ability to do so) at the market price constitutes demand. When many
purchasers
demand
a
good
at
the
market
price,
their
combined
purchasing
power
constitutes

As
this
combined
demand
increases
or
decreases, other things remaining constant, the price of the good tends to rise
or fall.




Derivative:
An
investment
vehicle
whose
value
depends
on
the
value
of
an
underlying asset or index. For example, a futures contract for the delivery of
gold
depends
on
the
value
of
gold
(the
underlying
asset).
A
futures
option
which, upon exercise, delivers a gold futures contract depends on the value of
the underlying gold futures contract.




Diagonal
spread:
Uses
options
with
different
expiration
dates
and
different
strike
prices;
for example,
a
trader might
purchase
a
26
December German
Mark put and sell a 28 September German Mark put when the futures price is
$$.2600/DM.




Direct
hedge: When
the
hedger
has
(or
needs)
the
commodity
(grade,
etc.)
specified for delivery in the futures contract, he is
does not have the specified commodity, he is cross hedging.




Discount: 1) Quality differences between those standards set for some futures
contracts and the quality of the delivered goods. If inferior goods are tendered
for delivery, they are graded below the standard, and a lesser amount is paid
for them. They are sold at a discount; 2) Price differences between futures of
different
delivery
months;
3)
For
short-term
financial
instruments,

may be used to describe the way interest is paid. Short-term instruments are
purchased at a price below the face value (discount). At maturity, the full face
value is paid to the purchaser. The interest is imputed, rather than being paid
as coupon interest during the term of the instrument; for example, if a T-Bill is
purchased for $$974,150, the price is quoted at 89.66, or a discount of 10.34%
(100.00 - 89.66 = 10.34). At maturity, the holder receives $$1,000,000.






Discount rate: The interest rate charged by the Federal Reserve to its member
banks
(banks
which
belong
to
the
Federal
Reserve
System)
for
funds
they
borrow. This rate has a direct bearing on the interest rates banks charge their
customers.
When
the
discount
rate
is
increased,
the
banks
must
raise
the


rates they charge to cover their increased cost of borrowing. Likewise, when
the discount rate is lowered, banks are able to charge lower interest rates on
their loans.




Discretionary
accounts:
An
arrangement
in
which
an
account
holder
gives
power of attorney to another person, usually his broker, to make decisions to
buy
or
to
sell
without
notifying
the
owner
of
the
account.
Discretionary
accounts often are called




Downtrend: A channel of downward price movement.




Drawdown: The worst percentage cumulative loss (from peak to valley) for an
investment in the managed futures industry is known as a drawdown.




Economic good: That which is scarce and useful to mankind.




Economy
of
scale:
A
lower
cost
per
unit
produced,
achieved
through
large-scale
production.
The
lower
cost
can
result
from
better
tools
of
production,
greater
discounts
on
purchased
supplies,
production
of
by-products,
and/or
equipment
or
labor
used
at
production
levels
closer
to
capacity.
A
large
cattle
feeding
operation
may
be
able
to
benefit
from
economies such as lower unit feed costs, increased mechanization, and lower
unit veterinary costs .




Efficiency:
Because
of
futures
contracts'
standardization
of
terms,
large
numbers of traders from all walks of life may trade futures, thus allowing prices
to be determined readily (it is more likely that someone will want a contract at
any given price). The more readily prices are discovered, the more efficient are
the markets.




Elasticity: A term used to describe the effects price, supply, and demand have
on one another for a particular commodity. A commodity is said to have elastic
demand when a price change affects the demand for that commodity; it has
supply elasticity when a change in price causes a change in the production of
the
commodity.
A
commodity
has
inelastic
supply
or demand
when
they
are
unaffected by a change in price.




Equity: The value of a futures trading account with all open positions valued at
the going market price.




Eurodollar Time
Deposits:
U.S. dollars on
deposit
outside
the
United
States,
either with a foreign bank or a subsidiary of a U.S. bank. The interest paid for
these dollar deposits generally is higher than that for funds deposited in U.S.
banks
because
the
foreign
banks
are
riskier
－
they
will
not
be
supported
or


nationalized by the U.S. government upon default. Furthermore, they may pay
higher
rates
of
interest
because
they
are
not
regulated
by
the
U.S.
government.




Even up: To close out, liquidate, or cover an open position.




Exchange: An association of persons who participate in the business of buying
or selling futures contracts or futures options. A forum or place where traders
gather
to
buy
or
sell
economic
goods.
With
the
advent
of
the
computerized
exchange, it is difficult to say exactly
for example, the Eurex is
its
business
is
conducted
in
the
U.S.
See
also
Board
of
trade
or
Contract
market.




Exchanges in the US: International Exchanges:


Cantor Exchange (CX)




Chicago Board of Trade (CBT)




Chicago Mercantile Exchange (CME)




Kansas City Board of Trade (KCBT)




Minneapolis Grain Exchange (MGEX)




New York Board of Trade (NYBOT)




New York Mercantile Exchange (NYMEX)


Bourse de Montreal (ME)




EUREX Frankfurt (EUREX)




Euronext Amsterdam/Brussels/Paris (ENP)




Hong Kong Exchange and Clearing Ltd. (HKEx)




International Petroleum Exchange of London (IPE)




London International Financial Futures Exchange (LIFFE)




Singapore Commodity Exchange Ltd. (SICOM)




Singapore Exchange Ltd. (SGX)






Sydney Futures Exchange Corporation Ltd. (SFE)




The Tokyo Commodity Exchange (TOCOM)




The Tokyo International Financial Futures Exchange (TIFFE)




Winnipeg Commodity Exchange (WCE)







Exchange
rates:
The
price
of
foreign
currencies.
If
it
costs
$$.42
to
buy
one
Swiss Franc, the exchange rate is .4200. As one currency is inflated faster or
slower than the other, the exchange rate will change, reflecting the change in
relative
value.
The
currency
being
inflated
faster
is
said
to
be
becoming
weaker
because
more
of
it
must
be
exchanged
for
the
same
amount
of
the
other
currency.
As
a
currency
becomes
weaker,
exports
are
encouraged
because others can buy more with their relatively stronger currencies.




Exercise: When a call purchaser takes delivery of the underlying long futures
position, or when a put purchaser takes delivery of the underlying short futures
position. Only option buyers may
passive position.




Expiration: An option is a wasting asset; i.e., it has a limited life, usually nine
months. At the end of its life, it either becomes worthless (if it is at- the-money
or out-of-the-money), or is automatically exercised for the amount by which it is
in-the-money.




Expiration
date:
The
final
date
when
an
option
may
be
exercised.
Many
options expire on a specified date during the month prior to the delivery month
for the underlying futures contract.




Ex-pit transactions: Occurring outside the futures exchange trading pits. This
includes
cash
transactions,
the
delivery
process,
and
the
changing
of
brokerage
firms
while
maintaining
open
positions.
All
other
transactions
involving futures contracts must occur in the trading pits through open outcry.




Federal
Reserve
Board:
The
functions
of
the
board
include
formulating
and
executing
monetary
policy,
overseeing
the
Federal
Reserve
Banks,
and
regulating
and
supervising
member
banks.
Monetary
policy
is
implemented
through
the
purchase
or
sale
of
securities,
and
by
raising
or
lowering
the
discount
rate
—
the
interest
rate
at
which
banks
borrow
from
the
Federal
Reserve. A board of Directors comprised of seven members which directs the
federal banking system, is appointed by the President of the United States and