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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.
Amortization
Liquidation of a debt through installment payments.
Security
Generally, a transferable instrument representing an ownership interest in a corporation (equity security or stock) or the debt of a corporation, municipality, or sovereign. Other forms of debt such as mortgages can be converted into securities.
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.
Buy (or Sell) On Opening
To buy (or sell) at the beginning of a trading session within the open price range.
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.
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
Basis Grade
The grade of a commodity used as the standard or par grade of a futures contract.
Buy (or Sell) On Close
To buy (or sell) at the end of the trading session within the closing price range.
Ponzi Scheme
Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture, as the investors expected, and gives investors the impression that a legitimate profit-making business or investment opportunity exists, where in fact it is a mere fiction.
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