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.
The process where a gap between two market makers' prices is exploited by buying from one while simultaneously selling to the other to lock in a profit.
An individual who solicits orders, customers or customer funds on behalf of a Futures Commission Merchant, an Introducing Broker, a Commodity Trading Adviser or a Commodity Pool Operator.
The price at which you can buy.
An option where the strike price is equal - or approximately equal - to the current market price of the underlying asset.
Allowing someone to deal on your behalf. This will require your written notification.
A market condition in which a futures price is lower in the distant delivery months than in the near delivery months.
The interest rate at which the Bank of England provides liquidity to the GBP money market.
A hundredth of 1% (0.01%).
A 'bear' is pessimistic about the market and expects it to fall. A 'bear market' is a term used to describe a falling market, or one that is trending lower.
The minimum movement you can bet on. This may differ from the underlying market tick size.
The price at which you can sell.
Blue Chip companies are large, well established and conservatively managed. The term refers to the highest valued chip in poker.
Medium-term (five-year) German Government Bond.
A bond is an IOU. You effectively lend money to a company or government in return for a fixed level of income (coupon) and the guaranteed return of your investment at the end of the bond's life (known as 'the maturity date'). In return you receive a certificate that you can sell on in the secondary market.
A company or individual that executes orders on behalf of financial and commercial institutions and/or the general public.
A market in which prices are rising. A market participant who believes prices will move higher is called a ‘bull’. A news report is considered bullish if it is expected to result in higher prices.
Long-term (ten-year) German Government Bond.
Trading on our higher (offer) price because you think the market will rise.
Market nickname for GBP/USD pair rate.
A ‘call’ option gives the purchaser the right, but not the obligation, to buy at a pre-arranged fixed price. A 'put' is the opposite of a 'call'.
A tax on investment profits. Spread betting winnings are currently free of any UK Capital Gains Tax under current laws.
A member of a futures exchange, usually a clearing-house member, through which another firm, broker or customer chooses to clear all or some trades.
The cost of storing a physical commodity. The carrying charge includes insurance, storage and interest on the invested funds as well as other incidental costs. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of the funds necessary to buy the instrument. Also referred to as ‘cost of carry’.
An actual physical commodity as opposed to the futures contract relating to it.
A place where people buy and sell actual commodities. See also Forward (cash) contract and Spot.
A method of settling certain futures or options contracts whereby the market participants settle in cash (rather than delivery of the commodity).
The current level of an underlying market.
The use of graphs and charts in the technical analysis of markets to plot price movements, volume, open interest or other statistical indicators of price movement. See also Technical analysis.
A system of trading halts and price limits on equities and derivatives markets designed to provide a cooling-off period during large, intraday market declines.
The process by which a clearinghouse maintains records of all trades and settles margin flow on a daily mark-to-market basis for its clearing members.
An agency or separate corporation of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting trade data. The clearinghouse becomes the buyer to each seller (and the seller to each buyer) and assumes responsibility for protecting buyers and sellers from financial loss by assuring performance on each contract.
A member of an exchange clearinghouse responsible for the financial commitments of its customers. All trades of a non-clearing member must be registered and eventually settled through a clearing member.
See Settlement price.
A range of prices at which futures transactions took place during the close of the market.
A fee charged by a broker to a customer for executing a transaction.
See Futures Commission Merchant.
An enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures or options contracts. The concept is similar to a mutual fund in the securities industry. Also referred to as a ‘pool’.
An individual or organisation that operates or solicits funds for a commodity pool.
A person who, for compensation or profit, directly or indirectly advises others as to the prudence of buying or selling futures or commodity options. Providing advice includes exercising trading authority over a customer’s account.
A futures market in which prices in succeeding delivery months are progressively higher. The opposite of backwardation.
A document sent out to confirm a trade. Can be emailed or sent by post.
Commonly used to mean any exchange on which futures are traded.
The month in which delivery is to be made in accordance with the terms of the futures contract. Also referred to as ‘delivery month’.
The tendency for prices of physical commodities and futures to approach one another, usually during the delivery month.
See Carrying charge.
A short call or put option position that is covered by the sale or purchase of the underlying futures contract or physical commodity.
Credit accounts are available to all clients subject to financial status and original proof of funds, and subject to certain financial conditions. See Account opening application
Allows a client to maintain unrealised losses without paying a margin. As the markets move up and down positions will acquire unrealised profit or loss, as long as the clients open positions remain within the credit allocation then no funds will be due.
Hedging a cash commodity using a different but related futures contract. Usually when there is no futures contract for the cash commodity being hedged and the cash and futures market follow similar price trends.
See Segregated account.
A speculator initiates and offsets a position within a single trading session.
The failure to perform a contractual obligation as required by exchange rules, such as a failure to meet a margin call or to make or take delivery.
The distant delivery months in which futures trading is taking place, as distinguished from the nearby futures delivery month.
The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific procedures for the delivery of a commodity. Some futures contracts, such as stock index contracts, are cash settled.
See Contract month.
Funds that need to be on your account in order to place or hold a bet. It is not the total amount that can be lost on a trade.
See Standard account.
Financial contracts, such as futures and options, whose value is derived from an underlying asset, rate or index.
The statement that must be provided to prospective customers that describes trading strategy, fees and performance.
(1) The amount a price would be reduced to purchase a commodity of a lesser grade (2) sometimes used to refer to the price differences between futures of different delivery months, as in July is trading at a discount to May, indicating that the price of the July future is lower than that of May (3) applied to cash grain prices that are below the futures price.
An arrangement by which the owner of the account gives written power of attorney to someone else, usually the broker or a Commodity Trading Adviser, to buy and sell without prior approval of the account owner. Also referred to as a ‘managed account’.
A distribution of profits to company shareholders, usually shown in pence per share. Dividends are paid at the company's discretion.
The index that tracks the performance of a representative selection of 30 Blue Chip US equities.
Dual trading occurs when a floor broker executes customer orders and, on the same day, trades for his own account or an account in which he has an interest.
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