Glossary of Commodity Market Terms
Nearby (Delivery) Month: – The futures agreement or contract month closest to the expiration. Also referred to as the spot month.
Offer: – An expression representative one’s longing to sell a goods at a given rates opposite of bid.
Offset: – Taking a next futures position conflicting to the initial or opening trading position. See Liquidate.
Open Interest – The whole number of futures agreements of a known commodity that have not so far been offset by an conflicting futures deal nor fulfilled by the delivery of commodity or option implement. Every open deal has a buyer & seller, but for the calculation of open interest, only single side of the agreement is counted.
Position: – A marketplace commitment. A purchaser of a futures agreement is said to have a long term position and equally, a seller of the futures agreements is said to have a short trading position.
Price Discovery: – The age group of information regarding “future” cash market rates through futures markets.
Price Limit: – The maximum proceed or refuse from the previous day’s resolution rate permitted for a agreement in single trading session by the regulations of the exchange.
Settlement Close Out Rate: – The last rate paid for a commodity good’s on any type of trading day. The trading exchange clearing house measure a firm’s net margin requirements, profits or losses and the subsequently day’s rate limits, based on every futures & options agreement settlement rate. If, there is a final range of rates, the settlement shut out rate is measured by the averaging those rates.
Short: – One, who has sold commodity futures contracts or agreements or plans to buy a cash commodity. The selling futures agreements or starting a cash forward agreement sale without offsetting a special market position.
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