Glossary

Speculators who take positions in commodities and then liquidate those positions prior to the close of the same trading day.

Making an open and close trade in the same product in one day.

A term that denotes a trade done at the current market price. It is a live trade as opposed to an order.

An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.

The difference between the buying and selling price of a contract.

Action taken by a trader, or group of traders, to prevent a product from trading at a certain price or price zone, usually because they hold a vested interest in doing so, such as a barrier option.

A negative balance of trade or payments.

Removing a stock’s listing on an exchange.

A trade where both sides make and take actual delivery of the product traded.

The ratio between the change in price of a product and the change in price of its underlying market.

A monthly survey produced by the DCLG that uses a very large sample of all completed house sales to measure the price trends in the UK real estate market.

A composite of tradable rates for lending and borrowing a currency over a specific time period (tenor), quoted as a yearly rate. The best bid and offer are taken to present a competitive picture of the cost of borrowing. When a deposit rate is used for financing, the 1-month rate will typically be used for consistency.

The decrease in value of an asset over time.

A financial contract whose value is based on the value of an underlying asset. Some of the most common underlying assets for derivative contracts are indices, equities, commodities, and currencies.

When a pegged currency is allowed to weaken or depreciate based on official actions; the opposite of a revaluation.

Interest rate that an eligible depository institution is charged to borrow short-term funds directly from the Federal Reserve Bank.

In technical analysis, a situation where price and momentum move in opposite directions, such as prices rising while momentum is falling. Divergence is considered either positive (bullish) or negative (bearish); both kinds of divergence signal major shifts in price direction. Positive/bullish divergence occurs when the price of a security makes a new low while the momentum indicator starts to climb upward. Negative/bearish divergence happens when the price of the security makes a new high, but the indicator fails to do the same and instead moves lower. Divergences frequently occur in extended price moves and frequently resolve with the price reversing direction to follow the momentum indicator.

A technical observation that describes moving averages of different periods moving away from each other, which generally forecasts a price trend.

The amount of a company’s earning distributed to its shareholders – usually described as a value per share.

Abbreviation for the Dow Jones Industrial Average or US30.

Dovish refers to data or a policy view that suggests easier monetary policy or lower interest rates. The opposite of hawkish.

Price action consisting of lower lows and lower highs.

Symbol for the US Dollar Index.