A swap whereby the notional value is increasing over time. This type of swap is used mainly by companies willing to pay a fixed rate in return for an…

A momentum indicator that attempts to gauge supply and demand by determining whether investors are generally "accumulating" (buying) or "distributing…

The physical commodity that underlies a futures contract or is traded in the physical market. This is the homogeneous commodity that is the basis for…

A transaction generally used by two hedgers who want to exchange futures for cash positions. Also referred to as against actuals (AA), exchange for physical…

1. Used in corporate financial planning, aggregation is a process whereby a number of a firm's smaller projects are combined and treated as an individual…

An interest rate swap whose notional value adjusts according to rising interest rates by indexing the floating portion to a constant maturity swap (CMS)…

A deviation from the basis grade or location allowable when delivering commodities under the terms of a futures contract. Allowances represent a premium…

An exchange authorized facility used as a location for the delivery of commodities tendered upon future contracts. These are generally banks, storehouses…

A program used to place simultaneous orders for stock index futures and the underlying stocks. The ATP attempts to exploit price variations (market arbitrage)…

1. The theoretical future price of a security or commodity based on the relationship between spot prices, interest rates, carrying costs, convenience…

An interest rate swap in which the floating payment is based on the interest rate at the end of the period. The payment is made at the end of the period…

An option feature whereby a reference price is activated at the end of an option should the underlying fall below a specified average before option expiry…

The act of testing the purity of precious metals. In futures contracts where the underlying commodities are precious metals, the quality must be assayed…

A redit default swap wherein the reference asset is an asset-backed security rather than a corporate credit instrument. The buyer of an asset backed credit…

Similar in structure to a plain vanilla swap, the key difference is the underlying of the swap contract. Rather than regular fixed and floating loan interest…

The act of clearing houses and brokerages selecting short option and future contract holders to deliver underlying securities or commodities of maturing…

A futures contract with a provision permitting the contract holder to convey his or her rights of assignment to a third party. This enables the contract…

The name given to participants within the futures market that are involved in the solicitation or facilitation of transacting customer orders, the maintenance…

An order to buy or sell a futures contract at the best available price upon entrance into the exchange for execution. This is identical to a market order…

A type of futures contract that expires in any month past the front month futures contract. The price of the first back month futures contract is often…

The available futures contracts for a particular commodity that possess expirations or delivery dates furthest into the future. Also referred to as deferred…

A pricing method used in specific futures contracts whereby the price of the commodity to be delivered is priced by the purchaser at some future date…

A theory developed in respect to the price of a futures contract and the contract's time to expire. Backwardation says that as the contract approaches…

A British merchant bank that was started in 1762, and for centuries was considered the largest and most stable bank in the world. In 1995, Barings - then…

A measure of oil output, represented by the number of barrels of oil produced in a single day. For example, you might hear "country ABC has the potential…

1. The variation between the spot price of a deliverable commodity and the relative price of the futures contract for the same actual that has the shortest…

The minimum accepted standard that a deliverable commodity must meet to be used as the actual of a futures contract. Also known as "par grade" or "contract…

A method for simplifying and shortening the quoted price of a futures contract. Used in the futures markets, a basis quote gives the variation above or…

The risk that offsetting investments in a hedging strategy will not experience price changes in entirely opposite directions from each other. This imperfect…

A BAX contract is a short-term investment instrument that uses a Canadian banker's acceptance (BA) as its underlying security. The specific BA underlying…

1. An option strategy seeking maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale…

The process of consolidating swap agreements between two parties into a single agreement. As a result, instead of each swap agreement leading to a stream…

A natural gas industry term typically used to measure the amount of natural gas that is either untapped in reserves, or being pumped and delivered over…

A fuel derived from organic oils, such as vegetable oil, rather than petroleum. Biodiesel’s use and production are increasing. It’s typically used for…

A variation of the Black-Scholes model that allows for the valuation of options on futures contracts. In 1976, Fisher Black, one of the developers of…

The trading of commodities and futures contracts off a blackboard found on the wall of a commodity exchange.Not all commodity- and futures-contract transactions…

A member or member nominee of a commodity exchange who is entrusted with the responsibility of executing and matching orders, providing price quotations…

The system used by many commodity exchanges in which members are assigned specific commodities to manage.A board broker system is similar to the systems…

A futures contract with medium term debt that is issued by the Federal Republic of Germany as its underlying asset. The contract has a notional contract…

A bond future is a contractual obligation for the contract holder to purchase or sell a bond on a specified date at a predetermined price. A bond future…

A type of swap arrangement in which two parties agree to exchange interest rates on debt obligations, where the floating rate is based on the bond market…

An arrangement made between a buyer and seller giving either party the ability, at some future date, to determine the cash price of the forward sales…

A term used in futures markets to describe a rapid and sharp price decline. Breaks generally occur due to unforeseen natural occurrences that affect…

A type of sweet crude oil that is used as a benchmark for the prices of other crude oils. The brent blend is a mix of crude oil from several facilities…

An acronym for "basket of un-hedged gold stocks". The BUGS index is the AMEX's index measuring gold companies that do not hedge their gold production…

A slang term used to describe a rapid advance in prices within the commodities market.A bulge is similar to a rally on equity exchanges.

A type of options strategy that is used when the investor expects a moderate rise in the price of the underlying asset. This strategy is constructed by…

Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins. Traditionally, bullion…

The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength. These types…

An agreement between a buyer and seller whereby a commodity purchase occurs at a specific price above a futures contract for an identical grade and quantity…