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Accrued interest
Interest deemed to be earned on a security but not yet paid to the investor.
Margin
The amount of money or collateral deposited by a customer with his broker, by a broker with a clearing member, or by a clearing member with a clearing organization. The margin is not partial payment on a purchase.
Call
An option contract giving the buyer the right but not the obligation to purchase a commodity or other asset or to enter into a long futures position
Abandon
To elect not to exercise or offset a long option position
Exercise Price (Strike Price)
The price, specified in the option contract, at which the underlying futures contract, security, or commodity will move from seller to buyer.
Basis Swap
A swap whose cash settlement price is calculated based on the basis between a futures contract and the spot price of the underlying commodity or a closely related commodity on a specified date.
Artificial Price
A futures price that has been affected by a manipulation and is thus higher or lower than it would have been if it reflected the forces of supply and demand.
Carrying Charges
Cost of storing a physical commodity or holding a financial instrument over a period of time. These charges include insurance, storage, and interest on the deposited funds, as well as other incidental costs.
Arbitrage
A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets in order to benefit from a discrepancy in their price relationship. In a theoretical efficient market, there is a lack of opportunity for profitable arbitrage. See Spread.
Hedge Exemption
An exemption from speculative position limits for bona fide hedgers and certain other persons who meet the requirements of exchange and CFTC rules.
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