Search results for: “futures”
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Nominal Price
Price quotations on futures for a period in which no actual trading took place….
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Nearby
The nearest active trading month of a financial or commodity futures market. Related: deferred futures…
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Marked-To-Market
An arrangement whereby the profits or losses on a futures contract are settled each day….
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Maintenance Margin Requirement
A sum, usually smaller than -but part of the original margin, which must be maintained on deposit at all times. If a customer’s equity in any futures position drops to, or under, the maintenance margin level, the broker must issue a margin call for the amount at money required to restore […]
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Long Hedge
The purchase of a futures contract(s) in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: Hedge, short hedge…
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Last Trading Day
The final day under an exchange’s rules during which trading may take place in a particular futures or options contract. Contracts outstanding at the end of the last trading day must be settled by delivery of underlying physical commodities or financial instruments, or by agreement for […]
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Invoice Price
The price that the buyer of a futures contract must pay the seller when a Treasury Bond is delivered….
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Inverted Market
A futures market in which the nearer months are selling at price premiums to the more distant months. Related: premium….
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International Monetary Market (Imm)
A division of the CME established in 1972 for trading financial futures. Related: Chicago Mercantile Exchange (CME)….
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Initial Margin Requirement
When buying securities on margin, the proportion of the total market value of the securities that the investor must pay for in cash. The Security Exchange Act of 1934 gives the board of governors of the Federal Reserve the responsibility to set initial margin requirements, but individual […]
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Index Arbitrage
An investment/trading strategy that exploits divergences between actual and theoretical futures prices….
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In-The-Money
A put option that has a strike price higher than the underlying futures price, or a call option with a strike price lower than the underlying futures price. For example, if the March COMEX silver futures contract is trading at $6 an ounce, a March call with a strike price of $5.50 would be […]
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Implied Repo Rate
The rate that a seller of a futures contract can earn by buying an issue and then delivering it at the settlement date. Related: cheapest to deliver issue…
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First Notice Day
The first day, varying by contracts and exchanges, on which notices of intent to deliver actual financial instruments or physical commodities against futures are authorized….
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Fair Price
The equilibrium price for futures contracts. Also called the theoretical futures price, which equals the spot price continuously compounded at the cost of carry rate for some time interval….