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1. Actuals
   Specifications and details regarding physical commodities per se or as cargoes for delivery as part of a spot deal or underlying a derivatives contract; as opposed to wholly derivatives deals wherein physical commodity details are manifested as part of strictly paper swaps.
2. Aggregation
   Policy or strategy wherein all derivatives positions owned and/or controlled by one trader or a group of traders are combined to review, audit, and ultimately determine reportable positions and speculative limits.
3. Arbitrage
   The simultaneous purchase and sale of identical commodity cargoes in different markets to take advantage of inherent spot price differentials.
4. Arbitration
   The process of resolving any form of dispute between parties by a person or persons (arbitrators) chosen or agreed to by all disputing parties involved .
5. Associated Person (AP)
   An individual who solicits orders, customers or customer funds on behalf of a futures commission merchant, a broker, or a commodity trading adviser and who is both licensed by MAS and registered with The Exchange.
6. At-the-Money Option
   An option whose strike price is equal, or very approximately equal, to current market prices of the underlying futures contract.
7. Basis
   The difference between the current cash / spot price and derivatives / futures price of any given commodity.
8. Basis Grade
   Specifications and details about a commodity used as the standard or par grade of a futures contract.
9. Bear Market (Bear/Bearish)
   Downward trend in financial or commercial benchmarks. An example would be a market in which prices are declining. A market participant who believes prices will move lower is called a bear.A news item is considered bearish if it is expected to result in lower prices.
10. Bid
    An expression of willingness to buy a commodity at a given price; the opposite of Offer.
11. Board
    Directors for the time being of the Exchange or such number of them as having the authority to act for the Exchange.
12. Board of Trade
    Designated entity or platform to trade futures or options contracts for a particular commodity. Commonly used to mean any exchange on which futures are traded. Also referred to as an Exchange.
13. Broker Member
    A company or individual that executes futures and options orders on behalf of financial and commercial institutions and/or the general public.
14. Bull Market (Bull/Bullish)
    Upward trend in financial or commercial benchmarks. An example would be a market in which prices are rising. A market participant who believes prices will move higher is called a bull. A news item is considered bullish if it is expected to influence higher prices.
15. Business Day
    It describes any day other than a Saturday, Sunday or official Public Holiday in Singapore.
16. Buyer
    It defines either the direct buying counterparty in a cash-settled Contract or the direct counterparty responsible for taking delivery of the underlying Commodity in a deliverable Contract, as the context may require.
17. Call Option (American Style)
    An option which gives the buyer the right, but not the obligation, to purchase (go long) the underlying futures contract at the strike price on or before the expiration date.
18. Carrying Broker
    A member of a futures exchange, usually a clearinghouse member, through which another firm, broker or customer chooses to clear all or some trades.
19. Cash Commodity
    The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also referred to as Actuals.
20. Cash Market
    A place where people buy and sell the actual commodities (i.e., grain elevator, bank, etc.). See also Forward (Cash) Contract and Spot.
21. Cash Settlement
    Conclusion / completion of futures or options contracts whereby market participants settle the deal in cash (payment of money rather than delivery of the commodity).
22. Charting
    The use of graphs and charts in the technical analysis of futures markets to plot price movements, volume, open interest or other statistical indicators of price movement. See also Technical Analysis.
23. Churning
    Unrestrained and excessive trading that results in brokers deriving rapidly incremental profit from commissions while disregarding the best interests of their customers. This practice is unethical and illegal according to most securities regulations worldwide.
24. Circuit Breaker
    A system of trading halts and price limits in equities and derivatives markets designed to provide a cooling-off period during large, intraday market declines or rises.
25. Clearing
    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.
26. Clearinghouse
    Entities including banks, corporations or divisions of an Exchange 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 ensuring full performance from every contract.
27. Clearing Member
    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 (Refer to Trading on SMX Glossary).
28. Closing Price
    The final price for a futures contract at the close of any trading day. Settlement prices are used to determine open trade equity, margin calls and invoice prices for deliveries. Also referred to as Closing Price.
29. Closing Range
    A range of prices at which futures transactions took place during the close of the market.
30. Commission
    A fee charged by a broker to a customer for executing a transaction.
31. Commodity Pool
    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.
32. Commodity Pool Operator (CPO)
    An individual or organization which operates or solicits funds for a commodity pool.
33. Connected Person
    In respect of any person (whether an individual or otherwise), a connected person as defined in the Securities and Futures Act.
34. Contango
    Market condition wherein distant term futures prices are higher than prices for nearer-term contracts. The reverse market condition wherein spot /current prices are higher than prices months or years ahead is known as backwardation. Contango generally encourages stockpiling in the physical trading sphere.
35. Contract
    It defines a contract in respect to a specified Commodity approved by the Exchange and the Authority for trading on the Markets.
36. Contract Market
    A board of trade designated by the regulatory authority to trade futures or options contracts for a particular commodity. Commonly used to mean any exchange on which derivatives are traded. Also referred to as an Exchange.
37. Contract Month
    The month in which delivery is to be made in accordance with the terms of the futures contract. Also referred to as Delivery Month.
38. Convergence
    A movement in the price of a futures contract towards the price of the underlying cash commodity. From the onset a contract price is usually higher as a result of time valuation. Traditionally, as a futures contract nears expiration, the futures price and the cash price eventually converges.
39. Covered Option
    Pertaining to options trading wherein a call or put option is written while simultaneously being supported and supplemented by actual physical trading of the underlying asset or sale / purchase of the underlying futures contract itself.
40. Covered Position
    Pertaining to hedging strategies describing a futures position which represents a substitute for transactions to be made or positions to be taken at a later time in a spot, spread or arbitrage position.
41. Cross-Hedging
    A hedging strategy describing positions for a cash commodity using a different but related futures contract when there is no fappropriate or immediately available futures contract for the cash commodity being hedged but the cash and related futures contract follow similar price trends; for example using crude oil futures to hedge natural gas positions.
42. Current Delivery Month
    The futures contract which has matured and becomes deliverable during the present month. It is also called Spot Month.
43. Customer
    This refers to a person whose account, or for whose benefit an account, is carried on the books of a Member except when such account is the Member's House Account or is otherwise for the benefit of a Member itself.
44. Customer Account
    An account carried on the books of a Member for its client, otherwise known as a Customer.
45. Customer Segregated Funds
    A special account used to hold and separate customers assets for trading on futures exchanges from those of the broker or firm.
46. Day Order
    An order that if not executed expires automatically at the end of the trading session on the day it was entered.
47. Day Trader
    A participant who will initiate and offset single or (usually) multiple positions within a single trading session. Such trading patterns are traditionally executed by speculators.
48. Default
    The failure to perform on a futures contract as required by exchange rules, such as a failure to meet a margin call or to make or take delivery.
49. Deferred Delivery Month
    The distant delivery month contract for which futures trading is taking place, as distinguished from the nearby futures delivery month contract.
50. Delivery Obligations
    It defines the delivery obligations of a Seller or a Buyer under a Contract.
51. Delivery
    The transfer of the cash commodity from the seller of a futures contract to the same contract's buyer. Each futures exchange has specific procedures for delivery of a cash commodity. Some futures contracts, such as stock index contracts, are cash settled.
52. Delivery Month
    See Contract Month.
53. Delivery Month
    See Contract Month.
54. Delivery Price
    The price fixed by the clearing organization at which deliveries on futures are invoiced generally the price at which the futures contract is settled when deliveries are made. It is also known as invoice price.
55. Derivative
    A financial instrument, for example futures, options or swap contracts, traded on or outside an exchange, the price of which is directly dependent upon the value of one or more underlying securities, equity indices, debt instruments, commodities, or other asset/product types, or any agreed upon pricing index or arrangement. The derivatives market involves the futures trading of selling or buying rights or obligations based on a pre-determined and agreed underlying product not limited to actual physical transactions of the underlying product. Derivatives trading serve mainly two purposes: trading risk management and broad-based speculative trading.
56. Direct Market Access
    Direct access to Exchange System via an Exchange-provided or Exchange-approved Order Management System.
57. Disclosure Document
    A statement that must be provided to prospective customers that describes trading strategy, potential risk, commissions, fees, performance obligations and all other relevant information, for purposes of optimal trading transparency and contract terms clarity.
58. Discount
    (1) The amount a price would be reduced by for the purchase of a commodity with lesser grade specifications; (2) Price differentials between futures of different delivery months, as in the phrase July is trading at a discount to May, indicating that the price of the July contract is lower than that of May; (3) applied to cash gain prices that are below the futures price.
59. Discretionary Account
    An arrangement by which the owner of the account gives written power of attorney to someone else, usually the broker or a Commodity Trading Advisor, to buy and sell without prior approval of the account owner. Also referred to as a Managed Account.
60. Divergence
    The price trend does not corroborate with an indicator's trend.
61. Dollar Cost Averaging
    Dollar cost averaging refers to the practice of purchasing securities at predetermined intervals and at set amounts, protecting the investor against dramatic movements in price.
62. Double Hedging
    Pertaining to hedging strategies wherein a trader holds a long position in the futures market in excess of the speculative position limit as an offset to a fixed price sale, despite having an ample supply of the commodity on hand to fill all current sales commitments not taking into account the additional long position taken up.
63. Dual Trading
    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. Also a situation wherein a futures commission merchant carries customer accounts and also trades or permits its employees to trade in accounts in which it has a proprietary interest, also on the same trading day.
64. Equity
    As used on a trading account statement, refers to the residual dollar value of a futures or option trading account, assuming it was liquidated at current prices.
65. Even Lot
    Pertaining to commodities trading wherein a unit is used to provide official price quotes.
66. Electronic Order
    An order placed without the use of a broker either via electronic trading systems or the Internet via Independent Software Vendors (ISV).
67. Electronic Trading Systems
    Systems that allow participating exchanges to list their products for trading electronically. These systems may replace, supplement or run along side of open outcry trading.
68. Equity
    1) The value of a futures trading account if all open positions were offset at the current market price; 2) an ownership interest in a company, such as stock.
69. Exchange
    See Contract Market.
70. Exchange for Physical or EFP
    Pertaining to traded contracts which sees an exchange of a commodity (which is physically deliverable under any Contract) for another equivalent Contract (which may or may not also be settled by physical delivery) between two Members.
71. Exercise
    Action taken by the holder of a call option if he chooses to execute his right to purchase the underlying futures contract or by the holder of a put option if he chooses to execute his rights to sell the underlying futures contract.
72. Exercise Price
    The price at which the buyer of a call / put option may choose to exercise his right to purchase / sell the underlying futures contract.
73. Exhaustion Gap
    A price gap that occurs after an important upward trend, which signals that buy demand is reaching exhaustion. Such a gap is often considered a temporary pause in an uptrend market condition.
74. Exhaustion Spike
    A spike in price creating a new high or low, and then retracing back significantly with the price unable to hold at the new high or low.
75. Expiration Date
    Generally, the last date on which an option may be exercised. It is not uncommon for an option to expire on a specified date during the month prior to the delivery month for the underlying futures contracts.
76. Extrinsic Value
    The amount of money options buyers are willing to pay for an option in anticipation that over time a change in the underlying futures price will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value.
77. Fiat Money
    Monies declared by governments to be legal tender.
78. Fiat System
    The Fiat System refers to the use of money as a storage medium for purchasing power as opposed to the barter system.
79. Fictitious Trading
    Wash trading, bucketing, cross trading, or other schemes which give the appearance of trading when actually no bona fide, competitive trade has occurred.
80. Fill
    Execute an order or to buy and sell a security or commodity.
81. First Notice Day
    The first day on which notice of intent to deliver a commodity in fulfilment of an expiring futures contract can be given to the clearinghouse by a seller and assigned by the clearinghouse to a buyer. Varies from contract to contract.
82. Forced Liquidation
    The situation in which a customer's account is liquidated (open positions are offset) by the brokerage firm holding the account, usually after notification that the account is under-margined due to adverse price movements and failure to meet margin calls.
83. Forward (Cash) Contract
    An official agreement requiring a seller to deliver a specified cash commodity to a buyer sometime in the future, wherein both parties are obligated to and expect delivery to occur. All terms of the contract may be customized, in contrast to futures contracts whose terms are standardized.
84. Fully Disclosed
    An account carried by a Futures Commission Merchant in the name of an individual customer; the opposite of an Omnibus Account.
85. Fundamental Analysis
    The anticipation and forecast of future price movements based on current demand and supply data.
86. Futures Contract
    A legally binding agreement to buy or sell a commodity physically or financial instrument such as a derivatives contract at a later date. Futures contracts are normally standardized according to the quality, quantity, delivery time and location for each commodity, with price as the only variable.
87. Gamma
    A measurement of how fast the delta of an option changes, given a unit change in the underlying futures price.
88. Give Up
    A contract executed by one broker for the client of another broker that the client orders to be turned over to the second broker. The broker accepting the order from the customer collects a fee from the carrying broker for the use of the facilities. It is often used to consolidate many small orders or to disperse large ones.
89. Good Till Canceled Order (GTC)
    An order which is valid at any time of an Open Order.
90. Hedging
    The practice of offsetting the price risk inherent in any cash market position by taking an opposite position in the futures market. A long hedge involves buying futures contracts to protect against possible increasing prices of commodities. A short hedge involves selling futures contracts to protect against possible declining prices of commodities.
91. Hedge Ratio
    The ratio of the value of futures contracts purchased or sold to the value of the cash commodity being hedged, a computation necessary to minimize basis risk.
92. High
    With regards to futures trading, the peak traded price achieved within any given trading day for a particular futures or options contract.
93. Holiday
    It defines any day declared to be a holiday under the Rules or by a resolution of the Board and any public holiday in Singapore.
94. Horizontal Spread
    It is an option spread involving the simultaneous purchase and sale of options of the same class and strike prices but different expiration dates.
95. Implied Volatility
    The volatility of a futures contract, security, or other instrument as implied by the prices of an option on that instrument, calculated using an option pricing model.
96. In Sight
    It means the amount of a particular commodity that arrives at a terminal or central locations in or near producing areas. When a commodity is "in sight, it is inferred that reasonably prompt delivery can be made. The quantity and quality also become known factors rather than estimates.
97. In-the-Money Option
    An option with intrinsic value beneficial to its buyer, while traditionally forcing losses on the option's writer limited only to how much higher (call) or lower (put) current prices fluctuate. A call option is in-the-money if its strike price is below the current price of the underlying futures contract. A put option is in-the-money if its strike price is above the current price of the underlying futures contract.
98. Indirect Bucketing
    It refers to a floor broker who effectively trades opposite his customer in a pair of non-competitive transactions by buying (selling) opposite to an accommodating trader to fill a customer order, and by selling (buying) for his personal account opposite to the same accommodating trader. The accommodating trader assists the floor broker by making it appear that the customer traded against him rather than against the floor broker.
99. Insider Trading
    Trading activity exploiting sensitive information that has not yet been made public wherein yet-to-be-disclosed information will with an almost certain measure of certainty effect predictable price movements upon release of data to the general public. The fact that the information is not available to other market participants upsets the transparency of the marketplace and its use is considered unfair and illegal.
100. Instrument
     Refers to trade-able assets such as a commodity, security, or derivative, or an index or value that underlies a derivative, or could underlie a derivative.
101. Initial Margin
     The amount a futures market participant must deposit into a margin account at the time an order is placed to buy or sell a futures contract.
     See also Margin.
102. Intrinsic Value
     The amount by which an option is in-the-money.
103. Introducing Broker (IB)
     A firm or individual that solicits and accepts commodity futures orders from customers but does not accept money, securities or property from the customer. All Introducing Brokers must be registered with the local regulatory authority (MAS).
104. Inverted Hammer
     The Inverted Hammer is a bullish reversal of the Japanese Candlestick pattern. In a downtrend, the security opens lower, then trades higher, but closes near where it opened. The candlestick has a long upper shadow/wick and a small real body at the lower end of the session.
105. Inverted Market
     It is a futures market in which the nearer months are selling at prices higher than the more distant months; a market displaying inverse carrying charges, characteristic of markets with supply shortages. Traders sometimes refer to this market condition as being in backwardation. The reverse market condition, or more traditional market state, is known as contango. (See Contango)
106. Inverted Yield Curve
     The yield curve is a graph showing the range of interest rates available to investors. An inverted yield curve shows long term rates falling below short term rates. This situation can occur when a slowing of the economy is expected or during a period of instability where investors look to the safety of the longer term bonds.
107. Invisible Supply
     It means uncounted stocks of a commodity in the hands of wholesalers, manufacturers and producers that cannot be identified and quantified accurately, or stocks that are outside commercial channels but are theoretically available to the market via non-traditional conduits.
108. Invoice Price
     It is the price fixed by the clearing house in which deliveries on futures are invoicedgenerally the price at which the futures contract is settled when deliveries are made. It is also known as Delivery Price.
109. Key Reversal
     It is a sharp reversal pattern that occurs during a trend. During an uptrend, prices open above that previous day's close, make a high and then close below the previous day's low. Conversely, during a downtrend, prices open below the previous day's close, make a new low and then close higher than previous day's high. The greater the price range and volume on the key reversal day is, the more reliable the signal will be.
110. Last Trading Day
     The last day on which trading may occur in a given futures or option.
111. Last Notice Day
     It is the final day on which notices of intent to deliver on futures contracts may be issued.
112. Leaps
     Acronym for Long-term Equity Anticipation Securities, indicating long-dated, exchange-traded options.
113. Leverage
     The advantageous ability to control large dollar amounts of a commodity with a comparatively small amount of capital.
114. Life of Contract
     It is the period between the commencement and expiration of trading for a particular futures contract. Life of Contract also refers to the period already passed in which trading has already occurred.
115. Limit
     See Position Limit, Price Limit, Variable Limit.
116. Line Chart
     Chart depicting a line connecting the closing prices of a market or contract over a specified period of time.
117. Liquidate
     To sell a previously purchased futures or options contract or to buy back a previously sold futures or options position. Also referred to as Offset.
118. Liquidity (Liquid Market)
     A characteristic of a security or commodity market with enough units outstanding and enough buyers and sellers to allow large transactions without a substantial change in price.
119. Local
     A member of an exchange who trades for his own account.
120. Long
     One who has bought futures contracts or options on futures contracts or owns a cash commodity.
121. Lot
     A unit of trading, usually representing the minimum volume for contract participation.
122. Low
     The lowest price achieved during the course of any single trading day for any specified contract.
123. Manipulation
     Planned, premeditated operation, transaction, or trading practice to cause and maintain an 'artificial' price. Specific types include corners and squeezes as well as unusually large purchases or sales of a commodity or security in a short period of time in order to distort prices, and putting out false information in order to distort prices by effecting market sentiment.
124. Manipulation
     Planned, premeditated operation, transaction, or trading practice to cause and maintain an 'artificial' price. Specific types include corners and squeezes as well as unusually large purchases or sales of a commodity or security in a short period of time in order to distort prices, and putting out false information in order to distort prices by effecting market sentiment.
125. Maintenance Margin
     A set minimum amount (per outstanding futures contract) that a customer must maintain in his margin account to retain his position.
126. Managed Account
     See Discretionary Account.
127. Margin
     An amount of money deposited by both buyers and sellers of futures contracts and by sellers of options contracts to ensure performance of the terms of the contract (the making or taking delivery of the commodity or the cancellation of the position by a subsequent offsetting trade). Margin in commodities is not a down payment, as in securities, but rather a performance bond.
128. Margin Call
     A call from a clearinghouse to a clearing member, or from a broker or firm to a customer, to bring margin deposits up to a required minimum level.
129. Mark-to-Market
     To debit or credit on a daily basis a margin account based on the close of that day's trading session. In this way, buyers and sellers are protected against the possibility of contract default.
130. Market Order
     An order to buy or sell a futures or options contract at whatever price is obtainable when the order reaches the trading floor.
131. Market Maker
     A professional securities dealer or person with trading privileges on an exchange who has an obligation to buy when there is an excess of sell orders and to sell when there is an excess of buy orders. By maintaining an offering price sufficiently higher than their buying price, these firms are compensated for the risk involved in allowing their inventory of securities to act as a buffer against temporary order imbalances. In the futures industry, this term is sometimes loosely used to refer to a floor trader or local who, in speculating for his own account, provides a market for commercial users of the market.
132. Maturity
     The period wherein a futures contract is settled by delivery of the actual commodity.
133. Member
     It describes a Clearing Member, a Trade Member, a Remote Member, a Non-Clearing Broker Member or an Individual Member.
134. Maximum Price Fluctuation
     The maximum advance or decline, from the previous day's settlement price, permitted for a futures contract in one trading session. Also referred to as Maximum Price Fluctuation.
135. Minimum Price Fluctuation
     The smallest increment of price movement for a futures contract.
136. Naked Option
     A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity.
137. National Futures Association (NFA)
     Authorized by Congress in 1974 and designated by the CFTC in 1982 as a registered futures association, the NFA is an industry-wide accepted self-regulatory organization for futures trading.
138. Nearby Delivery Month
     The futures contract month closest to expiration. Also referred to as the Spot Month.
139. Net Asset Value
     The value of each unit of participation in a commodity pool. Basically a calculation of assets minus liabilities plus or minus the value of open positions when marked to the market, divided by the total number of outstanding units.
140. Net Performance
     An increase or decrease in net asset value exclusive of additions, withdrawals and redemptions.
141. Net Position
     The difference between open long contracts and open short contracts held by a trader for any one commodity or derivative asset class.
142. Non-Clearing Member
     It defines a firm which is a member of an exchange, but is not able to clear transactions on its own. Non-clearing member firms pay another firm to clear their trades. (Refer to Trading on SMX Glossary).
143. Notice Day
     It defines any day on which notices of intent to deliver on futures contracts may be issued.
144. Notice of Intent to Deliver
     Notice that must be presented by the seller of a futures contract to the clearing organization prior to delivery. The clearing organization then assigns the notice and subsequent delivery instrument to a buyer.
145. Offer
     An indication of willingness to sell a futures contract at a given price; the opposite of a Bid.
146. Offset
     To sell a previously purchased futures or options contract or to buy back a previously sold futures or options position.
147. Open Interest
     The total number of futures or options contracts of a given commodity that have not yet been offset by an opposite futures or option transaction nor fulfilled by delivery of the commodity or option exercise. Each open transaction has a buyer and a seller, but for calculation of open interest, only one side of the contract is counted.
148. Open Position
     An open position exists where a Contract held by a party has not been closed out or where the obligations under the Contract are yet to be performed.
149. Open Order
     An order that remains in force until it is canceled or until the futures contracts expire.
150. Open Outcry
     A method of public auction for making bids and offers in the trading pits of futures exchanges.
151. Open Trade Equity
     The unrealized gain or loss on open positions.
152. Opening Range
     The range of prices at which buy and sell transactions took place during the start of any given trading session.
153. Option Buyer
     The purchaser of either a call or put option. Option buyers have the right, but not the obligation, to execute a futures position. Also referred to as a Holder.
154. Option Writer
     A person who sells an option and assumes the potential obligation to sell (in the case of a call) or buy (in the case of a put) the underlying futures contract at the exercise or strike price. Also referred to as an Option Grantor or Option Seller.
155. Option Contract
     A contract which gives the buyer the right, but not the obligation, to buy or sell a specified quantity of a commodity or a futures contract at a specific price within a specified period of time. The seller of the option is obligated to sell the commodity or futures contract or to buy it from the option buyer at the exercise price if the option is exercised.
156. Option Premium
     The price a buyer pays (and a seller receives) for an option. It is an immediate cash gain for option writers (seller) in order for them to willingly undertake what would be a disadvantageous obligation if and when a buyer exercises the option. Premiums are derived through agreed market processes. There are two components in determining this price extrinsic (or time) value and intrinsic value.
157. Out Trade
     It defines a trade that cannot be cleared by a clearing organization because the trade data submitted by the two clearing members or two traders involved in the trade differ in either price or quantity.
158. Out-of-the-Money Option
     A call option with a strike price higher or a put option with a strike price lower than the current market value of the underlying asset (i.e., an option that does not have any intrinsic value).
159. Over-the-Counter Market (OTC)
     A market where products such as stocks, foreign currencies and other cash items are bought and sold by telephone, Internet and other electronic means of communication rather than on a designated futures exchange.
160. Overnight Trade
     It is a trade which is not liquidated during the same trading session during which it was established.
161. Paper Profit or Loss
     Profit or loss that would be realized if open contracts were liquidated as of a certain time or at a certain price.
162. Paper Trade
     It is a mock trade that does not involve any actual money changing hands, undertaken for the purpose of practice and learning.
163. Par
     It refers to the standard delivery point or quality of a commodity that is deliverable on a futures contract. It serves as a benchmark to base discounts or premiums for varying quality and delivery locations.
164. Parity
     It defines the state of an option at the time of expiration - when the premium reflects intrinsic value and no time value.
165. Pit
     The area on the trading floor where trading in futures or options contracts is conducted by open outcry. Also referred to as a ring.
166. Pool
     See Commodity Pool.
167. Position
     A commitment, either long or short, in the market.
168. Position Limit
     The maximum number of speculative futures contracts one can hold as determined by the CFTC and/or the exchange where the contract is traded.
169. Position Trader
     A trader who either buys or sells contracts and holds them for an extended period of time, as distinguished from a day trader. The former is usually a hedging strategy as opposed to the more speculative nature of the latter.
170. Premium
     Refers to (1) the price paid by the buyer of an option; (2) the price received by the seller of an option; (3) cash prices that are above the futures price; (4) the amount a price would be increased to purchase a better quality commodity; or (5) a futures delivery month selling at a higher price than another.
171. Price Discovery
     The determination of the price of a commodity taking into account all market trading processes and outcomes.
172. Price Limit
     The maximum advance or decline, from the previous day's settlement price, permitted for a futures contract in one trading session. Also referred to as Maximum Price Fluctuation.
173. Put Option
     An option which gives the buyer the right, but not the obligation, to sell the underlying futures contract at a particular price (strike or exercise price) on or before a particular date.
174. Put
     It is an option contract that gives the holder the right but not the obligation to sell a specified quantity of a particular commodity or other interest at a given price prior to or on a future date.
175. Put-Call Ratio
     The Put-Call Ratio shows the ratio of trading volume in put options versus call options and is used to measure the mood of market participants, with regards to sentiment for higher or lower price levels for far-away contracts / time period.
176. Proprietary Account 1
     This can be an account that a Non-Clearing Broker Member carries for itself or a closely related person, such as a parent, subsidiary or affiliate company, general partner, director, associated person, or an owner of ten percent or more of the capital stock. The Broker Member must segregate customer funds from funds related to proprietary accounts. 2) This can also, with respect to a General Clearing Member, mean an account in the books of the Clearing Member to which the Proprietary Positions of a Clearing Member are designated. (See Trading on SMX Glossary)
177. Proprietary Trade
     Trades executed by a Member on the Member's Proprietary Account.
178. Proprietary Position
     A position arising from any Contract entered into for the account of the Clearing Member itself or for any of its Related Customers, whether the position is open or has been liquidated.
179. Quotation
     The guarantee of a Clearing Member to accept liability for all Contracts executed on the Market by a person which the Clearing Member has agreed to qualify. To qualify is to guarantee and accept the person's liability on the Contracts.
180. Quant
     Quant is an abbreviation of Quantitative Analyst, and refers to a specialist that develops mathematical models to assist traders and risk managers at financial institutions.
181. Rally
     It refers to an upward movement of prices, across the board to a good extent.
182. Range
     The difference between the high and low price of a commodity during a given trading session week, month, year, etc.
183. Ratio Hedge
     The number of options compared to the number of futures contracts bought or sold in order to establish a hedge that is neutral or delta neutral.
184. Ratio Spread
     A strategy which applies to both puts and calls, and involves buying or selling options at one strike price in greater number than those bought or sold at another strike price. Ratio spreads are typically designed to be delta neutral.
185. Reaction
     A downward price movement after a somewhat unanticipated price advance.
186. Recovery
     It defines an upward price movement after a decline.
187. Registered Representative
     An individual (other than an Approved Trader) who is sponsored by a Clearing Member or Non-Clearing Broker Member and approved by the Exchange to act as a sales representative of such Member for Commodities.
188. Reversal Days
     A reversal day occurs at a market top or bottom. A top reversal day occurs when a new high is made during an uptrend and is followed by a lower close than the previous day's closing price. A bottom reversal day occurs when a new low is made during a downtrend and is followed by a higher close than the prior daily session. The range of trading and the volume of trading influence the significance of the pattern.
189. Reverse Conversion
     Pertaining to options trading wherein a position is created by buying a call option, selling a put option, and selling the underlying instrument, for example, a futures contract.
190. Ring
     It defines a circular area on the trading floor of an exchange where traders and brokers stand while executing futures trades. Some exchanges use pits rather than rings.
191. Risk/Reward Ratio
     It defines the relationship between the probability of loss and profit. This ratio is often used as a basis for trade selection or comparison.
192. Roll-Over
     It is a trading procedure involving the shift of one month of a straddle into another future month while holding the other contract month. The shift can take place in either the long or short straddle month. The term also applies to lifting a near futures position and re-establishing it in a more deferred delivery month.
193. Round Lot
     A quantity of a commodity equal in size to the corresponding futures contract for the commodity.
194. Round Turn
     A completed futures transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.
195. Rules
     It defines the principles for governing an exchange. On some exchanges, rules are adopted by a vote of the membership. In other exchanges, they can be imposed by the governing board.
196. Runners
     Messengers or clerks who deliver orders received by phone clerks to brokers for execution in the pit.
197. Sample Grade
     It is usually the lowest quality of a commodity, too low to be acceptable for delivery in satisfaction of futures contracts.
198. Scalper
     A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight. Scalping is employed to a larger extent by intra-day traders or speculative trades.
199. Securities and Futures Act
     The Securities and Futures Act, Chapter 289 of Singapore or any statutory modification, amendment or re-enactment thereof for the time being in force and any reference to any provisions of the Securities and Futures Act is to that provision as modified, amended or re-enacted from time to time or contained in any such subsequent Securities and Futures Act.
200. Security
     It defines a transferable instrument representing an ownership interest in a corporation (equity security or stock) or the debt of a corporation, government or organization. Other forms of debt such as mortgages can be converted into securities. Certain derivatives on securities (e.g., options on equity securities) are also considered securities for the purposes of the securities laws. Security Futures Products are considered to be both securities and futures products. Futures contracts on Broad-Based Securities Indexes are not considered securities.
201. Security Deposit
     It defines an amount required to be deposited with the Exchange by each Clearing Member as a security for its obligations to the Clearing House (Refer to Trading on SMX Glossary).
202. Segregated Account
     A special account used to hold and separate customers assets for trading on futures exchanges from those of the broker or firm. Also referred to as Customer Segregated Funds.
203. Self-Regulatory Organization (SRO)
     Exchanges and registered futures associations that enforce financial and sales practice requirements for their members.
204. Seller
     It defines either the direct selling counterparty in a cash-settled Contract or the direct counterparty responsible for making delivery of the underlying Commodity in a deliverable Contract, as the context may require.
205. Seller's Call
     Seller's Call, also referred to as call purchase, is the same as a buyer's call, except that the seller has the right to determine the time to fix the price.
206. Seller's Market
     It is a condition of the market where there is a scarcity of goods available and sellers can obtain better conditions of sale or higher prices.
207. Seller's Option
     It defines the right of a seller to select, within the limits prescribed by a contract, the quality of the commodity delivered and the time and place of delivery.
208. Selling Hedge (or Short Hedge)
     It means selling futures contracts to protect against possible decreased prices of commodities
209. Series (of Options)
     It defines options of the same type (like either puts or calls, but not both), and covering the same underlying futures contract or other underlying instrument by having the same strike price and expiration date.
210. Settlement
     It is an act of fulfilling the delivery requirements of the futures contract. In relation to a Contract, it refers to the procedures for cash settlement or physical delivery as set out in the relevant Contract Specifications and in accordance with the Rules.
211. Settlement Price
     The last price paid for a futures contract on any trading day. Settlement prices are used to determine open trade equity, margin calls and invoice prices for deliveries. Also referred to as Closing Price.
212. Settlement Variation
     It defines the dollar amount due each Trading Day to or from the Clearing House by Clearing Members calculated by applying the daily settlement price to their open positions.
213. The Securities and Futures Regulations (Financial and Margin Requirements for Holders of Capital Markets Services Licenses) SFFMRR
     The Securities and Futures Regulations (Financial and Margin Requirements for Holders of Capital Markets Services Licenses) promulgated under the Securities and Futures Act or any statutory modification, amendment or re-enactment thereof for the time being in force and any reference to any provision of the SFFMRR is to that provision as modified, amended or re-enacted from time to time or contained in any such subsequent SFFMRR.
214. Short
     One who has sold futures contracts or plans to purchase a cash commodity.
215. Slippage
     Broadly speaking, slippage refers to a failure to meet expectation with regard to the execution of an order. Slippage reflects the extent to which an order fill price differs negatively from the price level at which it was entered. Slippage also describes the difference between estimated transaction costs for a trade and the amount paid due to market conditions, poor execution etc.
216. Soft
     It is a description of a price that is gradually weakening. The term also refers to certain soft commodities such as sugar, cocoa, and coffee.
217. Speculator
     A market participant who tries to profit from buying and selling futures and options contracts by anticipating future price movements. Speculators assume market price risk and add liquidity and capital to the futures markets.
218. Spot
     Usually refers to a cash market for a physical commodity where the parties generally expect immediate delivery of the actual commodity.
219. Spot Month
     See Nearby Delivery Month.
220. Spreading
     The buying and selling of two different delivery months or related commodities in the expectation that a profit will be made when the position is offset.
221. Squeeze
     It describes a market situation in which the lack of supplies tends to force shorts to cover their positions by offsetting at higher prices.
222. Stop Limit Order
     A stop limit order is an order that goes into force as soon as there is a trade at the specified price. The order, however, can only be filled at the stop limit price or better.
223. Stop Order
     An order that becomes a market order when the futures contract reaches a particular price level. A sell stop is placed below the market, a buy stop is placed above the market.
224. Strike Price
     The price at which the buyer of a call (put) option may choose to exercise his right to purchase (sell) the underlying futures contract. Also called Exercise Price.
225. Straddle
     It describes an option position consisting of the purchase of put and call options having the same expiration date and strike price.
226. Strangle
     It describes an option position consisting of the purchase of put and call options having the same expiration date, but different strike prices.
227. Strong hands
     When used in connection with delivery of commodities on futures contracts, the term usually means that the party receiving the delivery notice probably will take delivery and retain ownership of the commodity. When used in connection with futures positions, the term usually means positions held by trade interests or well-financed speculators.
228. Support
     In technical analysis, it describes a price area where new buying is likely to come in and stem any decline.
229. Swing Trading
     It describes trading in a time frame of one to four days, when Swing Traders attempt to exploit short-term price momentum.
230. Switch
     Offsetting a position in one delivery month of a commodity and simultaneous initiation of a similar position in another delivery month of the same commodity, a tactic referred to as rolling forward.
231. Synthetic Futures
     A position created by combining call and put options. A synthetic long futures position is created by combining a long call option and a short put option for the same expiration date and the same strike price. A synthetic short futures contract is created by combining a long put and a short call with the same expiration date and the same strike price.
232. Systematic Risk
     It describes market risk due to factors that cannot be eliminated by diversification.
233. Technical Analysis
     An approach to analysis of futures markets which examines patterns of price change, rates of change, and changes in volume of trading, open interest and other statistical indicators.
234. Theta
     Theta is the measurement of the time decay of an option position. It is the ratio of the change in an option's price to the decrease in the time remaining to the option's expiration.
235. Tick
     The smallest increment of price movement for a futures contract. Also referred to as Minimum Price Fluctuation.
236. Time Decay
     The tendency of an option to decline in value as the expiration date approaches, especially if the price of the underlying instrument is exhibiting low volatility.
237. Time Spread
     The selling of a nearby option and buying of a more deferred option with the same strike price. It is also called Horizontal Spread.
238. Time Spread Strategy
     The Time Spread Strategy consists of buying or selling an option with the same exercise (strike) price but different expirations in an attempt to profit from divergence in the premiums of the options.
239. Time Value
     The amount of money options buyers are willing to pay for an option in anticipation that over time a change in the underlying futures price will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value. Also referred to as Extrinsic Value.
240. Trade
     It defines any purchase or sale of a Commodity during trading hours pursuant to the Rules (Refer to Trading on SMX Glossary).
241. Trade Member
     A Non-Clearing Member of the Exchange (Refer to Trading on SMX Glossary).
242. Trading Facility
     A person or group of persons that provide a physical or electronic facility or system for which multiple participants have the ability to execute or trade agreements, contracts, or transactions by accepting bids and offers made by other participants in the facility or system.
243. Trading Floor
     It describes a physical trading facility where traders make bids and offers via open outcry or the specialist system.
244. Transaction
     It describes the entry or liquidation of a trade.
245. Trend
     It means the general direction, either upward or downward, in which prices have been moving.
246. Troy Ounce
     Most metals are measured in troy ounces (oz). One troy ounce is equal to 31.10 grams. The name Troy is derived from the town in the Champagne region of France called Troyes, which was an important center of commerce for precious metals during the middle ages.
247. Uncovered Option
     A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity. Also referred to as a Naked Option.
248. Underlying Commodity
     It describes the cash commodity underlying a futures contract, and the commodity or futures contract on which a commodity option is based, and which must be accepted or delivered if the option is exercised.
249. Vanilla
     It is an option with no special or unusual features.
250. Variable Limit
     A price system that allows for larger than normal allowable price movements under certain conditions. In periods of extreme volatility, some exchanges permit trading at price levels that exceed regular daily price limits (Refer to Trading on SMX Glossary).
251. Variation Margin
     Additional margin required to be deposited by a clearing member firm to the clearinghouse during periods of great market volatility or in the case of high-risk accounts.
252. Vault Receipt
     A document indicating ownership of a commodity stored in a bank or other depository and frequently used as a delivery instrument in precious metal futures contracts.
253. Vertical Spread
     Any of several types of option spread involving the simultaneous purchase and sale of options of the same class and expiration date but different strike prices, including bull vertical spreads, bear vertical spreads, back spreads, and front spreads.
254. Volatility
     A measurement of the change in price over a given time period.
255. Volume
     The number of purchases and sales of futures contracts made during a specified period of time, often the total transactions for one trading day.
256. Warehouse
     It defines a warehouse described in the Contract Specifications as the context may require.
257. Warehouse Receipt
     A document certifying possession of a commodity in a licensed warehouse that is recognized for delivery purposes by an exchange.
258. Wash Trading
     Entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position.
259. Writer
     A person who sells an option and assumes the potential obligation to sell (in the case of a call) or buy (in the case of a put) the underlying futures contract at the exercise price.
260. Year to Date (YTD)
     It defines the period from the beginning of the calendar year up to the present.
261. Yield
     A measure of the annual return on an investment.
262. Zero Minus Tick
     It describes a transaction at the same price as the preceding trade, and less than the most recent different transaction price. It is also called zero downtick.
263. Zero-Plus Tick
     It describe a transaction at the same price as the preceding trade, and greater than the most recent different transaction price. It is also called zero up tick.
264. Zeta
     Zeta refers to the percentage change in an options price, per 1% change in implied volatility

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