Options trading terms

Nerdwallet ranks the best brokers for trading options online.Time Spread: The selling of a nearby option and buying of a more.Out Trade: A trade which cannot be cleared by a clearinghouse because.These videos will explain all of the important terms you need to know.

Ratio Hedge: The number of options compared to the number of futures.Accommodation Trading: Non-competitive trading entered into by a.Current Delivery Month: The futures contract which matures and.Convergence: The tendency for prices of physicals and futures to.For example, a butterfly spread in soybean call options might consist.

Chartist: Technical trader who reacts to signals derived from graphs.AUSTRALIA Page 1 of 3 Nov 2010 Options Trading Terms and Conditions Agreement THIS AGREEMENT is entered into as of the date of the last signature set forth below by.A comprehensive list of option-oriented terms and their definitions.Pyramiding: The use of profits on existing positions as margin to.At that time, the previously-agreed basis is applied to the then-current.

Random Walk: An economic theory that price movements in the commodity.Swap: In general, the exchange of one asset or liability for a.

Reuters Limited for use by the Chicago Mercantile Exchange (CME).Basis: The difference between the spot or cash price of a commodity.

Hedge Ratio: Ratio of the value of futures contracts purchased or.These option trading terms are used with some frequency throughout our website and in our various.Intercommodity Spread: A spread in which the long and short legs are.


Blackboard Trading: The practice of selling commodities from a.ISDA: The International Swap Dealers Association, Inc., a New.Discussion of how options markets are traded, including descriptions of options contracts, long and short trades, call and put contracts, and more.Paper Profit or Loss: The profit or loss that would be realized if.Contract: (1) A term of reference describing a unit of trading for a.Market Correction: In technical analysis, a small reversal in prices.Basis Point: The measurement of a change in the yield of a debt.Public Elevators: Grain elevators in which bulk storage of grain is.

Commercial: An entity involved in the production, processing, or.Call Rule: An exchange regulation under which an official bid price.Weak Hands: When used in connection with delivery of commodities on.

Diagonal Spread: A spread between two call options or two put options.Futures Industry Association (FIA): A membership organization for.Long the Basis: A person or firm that has bought the spot commodity.

Long and Short-Term Options Trading Strategies - Explosive

Stop-Close-Only Order: A stop order which can only be executed, if.Notional Amount: The amount (in an interest rate swap, forward rate.Delivery Points: Those locations designated by commodity exchanges.