A Guide to Futures and Options Market Terminology [Inc. Center for Futures Education] on Amazon.com. *FREE* shipping on qualifying offers. Over 300 futures and futures options related terms defined. This booklet is a must for anyone wanting to learn futures terminology and its meaning. A great way to become familiar with the industry jargon! The lingo of commodity futures trading can be foreign to many investors. This guide translates common industry terminology for you. It covers futures and options terminology from A to Z! Terminologies are broken down into: Basic Terminology Options Terminology Regulatory Terminology Stock Index and Single-Stock Futures Terminology Technical Analysis Terminology… Futures and Options Glossary. Courtesy of the CFTC (Commodity Futures Trading Commission) this is the most extensive commodity market glossary that we have found, enjoy. Futures and Options Glossary A - B Hits: 4816 Futures and Options Glossary C - D Hits: 4563 Futures and Options Glossary E - G This glossary contains definitions of the many terms, phrases and abbreviations used in the world of options trading and is a continual work in progress. To start using the glossary, click on the above alphabetical hyperlink corresponding to the first letter of the term you wish to understand. Futures Trading Terms Glossary. Welcome to the RJO Futures trading terms glossary. Within this glossary, you will find an expansive list of trading terms covering commodity, option, and futures trading terminology. Bookmark this section as a quick reference for definitions of trading terms as you browse the Internet and our site for more An option is the right, not the obligation, to buy or sell a futures contract at a designated strike price for a particular time. Buying options allow one to take a long or short position and speculate on if the price of a futures contract will go higher or lower. The futures or options on futures contracts being traded that are further from expiration that the current or “front month” contract. Also called deferred or distant months. Backspreads. Selling one or more at-the-money options and buying a larger number of out-of-the-money options. Backspreads may generate trading profits if implied
In finance, a futures contract (more colloquially, futures) is a standardized legal agreement to amount of money deposited by both a buyer and seller of a futures contract or an options seller to ensure performance of the term of the contract. In finance, an option is a contract which gives the buyer the right, but not the obligation, to buy A financial option is a contract between two counterparties with the terms of the option The most common way to trade options is via standardized options contracts that are listed by various futures and options exchanges. Terminology. Futures – An agreement to buy or sell a particular commodity at a predetermined price at a specified time in the future. Options – An option is a Example of Commodity Futures Contract:The terms of Matif milling wheat futures for at-the-money options on futures, that is – the option with a strike price
Unlike options, a futures contract is binding and the contract must be fulfilled per the terms of the agreement. Popularity in the financial industry. Futures and options are a significant part of the financial trading industry and are roughly equally popular, with options having a slight advantage in volume. For futures options, each one is different. However, most commodity-based futures options expire in the month before the future expires. Fair Value. A term used to describe the theoretical worth of an option or futures contract; determined generally by a mathematical model, with volatility sometimes being a subjective variable. Futures
Although both are derivatives, futures and options are entirely different in terms of their potential risk and return.
The simultaneous purchase and sale of options on futures contracts of the same strike price, but different expiration dates. Call option. A contract between a buyer A company or individual that executes futures and options orders on behalf of financial and commercial institutions or the general public. Call option. An option that The clearinghouse then notifies the option seller that the buyer has exercised. When futures options are exercised, the Options are similar to insurance in several ways, including some of the related terminology. Options bought or sold through a commodity futures broker do not