FAQ

The instructions to activate your account will be sent to your email once you have submitted the registration form. If you did not receive this email, your email service provider’s mailing software may be blocking it. You can try checking your junk / spam folder or contact us at ask@investingpie.com

Arbitrage is a strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other financial instruments across two or more markets in order to benefit from a discrepancy in their price relationship. In a theoretical efficient market, there is a lack of opportunity for profitable arbitrage.

Arbitration is a process for settling disputes between parties that is less structured than court proceedings. The National Futures Association arbitration program provides a forum for resolving futures-related disputes between NFA members or between NFA members and customers. Other forums for customer complaints include the American Arbitration Association.

Ask price, also called Offer Price, is the price level of an offer that a seller states they accept, as in bid-ask spread. Bid is the price the buyer is willing to pay. Ask Price is always higher than the Bid Price.

An Assignable Contract is a futures contract that allows the holder to convey his rights to a third party. Exchange-traded contracts are not assignable.

Associated Person is an individual who solicits or accepts orders (other than in a clerical capacity), discretionary accounts, or participation in a commodity pool, or supervises any individual so engaged, on behalf of a futures commission merchant, an introducing broker, a commodity trading advisor, a commodity pool operator, or an agricultural trade option merchant.    

At –the–Market Offering (ATM) is an order to buy or sell a futures contract at whatever price is obtainable when the order reaches the trading facility.

It’s a situation in which an option's strike price is the same as the current trading price of the underlying commodity.

The difference between in the money and out of the money options is the difference is in the strike price’s position, also called moneyness.

Automatic Exercise is a provision in an option contract specifying that it will be exercised automatically on the expiration date if it is in-the-money by a specified amount, absent instructions to the contrary. All long options are subject to automatic exercise by the Options Clearing Corporation (OCC) unless you instruct otherwise. The option is exercised automatically if it's in-the-money by a predetermined amount.

Automatic Exercise is a provision in an option contract specifying that it will be exercised automatically on the expiration date if it is in-the-money by a specified amount, absent instructions to the contrary. All long options are subject to automatic exercise by the Options Clearing Corporation (OCC) unless you instruct otherwise. The option is exercised automatically if it's in-the-money by a predetermined amount.

You can trade them by market close at 4 PM Eastern time.

The weekly options will expire on the Friday of that week, also with a last trading time of 4 PM Eastern time.

As a holder of an American style option, you can choose to exercise your option at any point up until the expiration date. Typically, options are only exercised when they are in-the-money. If the option is out-of-the-money, exercising would mean either paying more than market price to buy shares or receiving less than market price to sell shares.

If you exercise your call option, you will be given stock at the strike price of the call option. When you exercise a put option, you have the right to sell your stock at the strike price of the put option.

When a put option expires in-the-money, the buyer of the put option has the right, but not the obligation, to sell. The seller of a put option that expires in the money is required to buy.

When a put option expires out of the money, the buyer loses the debit that they paid for the trade. The seller of a put option that expires out of the money gets to keep the credit they collected.

Back Months in Futures Trading are futures delivery months other than the spot or front months (also called deferred months).

The Back Office is the department in a financial institution that processes, deals, handles delivery, settlement, and regulatory procedures.

A delta-neutral ratio spread in which more options are bought than sold. A back spread will be profitable if volatility increases.

A manipulative or disruptive trading practice whereby a trader buys or sells a large number of futures contracts during the closing period of a futures contract (that is, the period during which the futures settlement price is determined) in order to benefit from an even larger position in an option, swap, or other derivative that is cash settled based on the futures settlement price on that day.

Basis in futures contract is the difference between the spot or cash price of a commodity and the price of the nearest futures contract for the same or a related commodity (typically calculated as cash minus futures). Basis is usually computed in relation to the futures contract next to expire, and may reflect different time periods, product forms, grades, or locations.

Basis is the difference between the local cash price of a commodity and the price of a specific futures contract of the same commodity at any given point in time.
Cash Price - Futures Price = Basis.

The Basis Point in trading is the measurement of a change in the yield of a debt security. One basis point equals 1/100 of one percent.

One basis point is equal to one one-hundredth of one percentage point (0.01%). Therefore, 100 basis points would be equivalent to 1%.

The Basis Risk is the risk associated with an unexpected widening or narrowing of the basis between the time a hedge position is established and the time that it is lifted.

Definition: Bear Market is a market in which prices generally are declining over a period of months or years; opposite of a bull market.

Definition: Bear Market is a market in which prices generally are declining over a period of months or years; opposite of a bull market.

A market trend is a tendency of financial markets to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, and secondary for short time frames.

Rally (stock market) A rally is a period of sustained increases in the prices of stocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively.

1. Bear Spread is a strategy involving the simultaneous purchase and sale of options of the same class and expiration date, but different strike prices. In a bear spread, the option that is purchased has a lower delta than the option that is sold. For example, in a bear call spread, the purchased option has a higher exercise price than the option that is sold. Also called bear vertical spread.

2. The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a decline in prices but at the same time limiting the potential loss if this expectation does not materialize. In agricultural products, this is accomplished by selling a nearby delivery and buying a deferred delivery.

A put spread is an option spread strategy that is created when equal number of put options are bought and sold simultaneously. Unlike the put buying strategy in which the profit potential is unlimited, the maximum profit generated by put spreads are limited.

A bear put spread is a type of options strategy used when a trader expects a decline in the price of the underlying asset. Bear Put Spread is achieved by purchasing put at a specific strike price while also selling the same number of puts at a lower strike price.

Bear Call Spread is a type of options strategy, which will theoretically increase in value with a decline in the price of the underlying asset. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price.

Bear Call Spread is a type of options strategy, which will theoretically increase in value with a decline in the price of the underlying asset. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price.

A put spread is an option spread strategy that is created when equal number of put options are bought and sold simultaneously. Unlike the put buying strategy in which the profit potential is unlimited, the maximum profit generated by put spreads are limited.

A bear put spread is a type of options strategy used when a trader expects a decline in the price of the underlying asset. Bear Put Spread is achieved by purchasing put at a specific strike price while also selling the same number of puts at a lower strike price.

Bear Call Spread definition is a type of options strategy, which will theoretically increase in value with a decline in the price of the underlying asset. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price.

Bear Call Spread is a type of options strategy, which will theoretically increase in value with a decline in the price of the underlying asset. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price.

It consists of the purchase of one put in hopes of profiting from a decline in the underlying asset, and selling another put with the same expiration, but with a lower strike price, as a way to offset some of the cost.

A Beta Coefficient measures the variability of rate of return or value of a stock or portfolio compared to that of the overall market, typically used as a measure of risk.

Beta coefficient is a measure of sensitivity of a share price to movement in the market price. It measures systematic risk which is the risk inherent in the whole financial system. Beta coefficient is an important input in capital asset pricing model to calculate required rate of return on a stock.

Bid is an offer to buy a specific quantity of a commodity or financial instrument at a stated price. The ask price is what sellers are willing to take for it.

Bid is an offer to buy a specific quantity of a commodity or financial instrument at a stated price. The ask price is what sellers are willing to take for it.

Bid is an offer to buy a specific quantity of a commodity or financial instrument at a stated price. The ask price is what sellers are willing to take for it.

Bid is an offer to buy a specific quantity of a commodity or financial instrument at a stated price. The ask price is what sellers are willing to take for it.

Bid is an offer to buy a specific quantity of a commodity or financial instrument at a stated price. The ask price is what sellers are willing to take for it.

The ask price is generally higher than the bid price, but sometimes they can be virtually the same.

The difference between the bid price and the ask price.

The difference between the bid price and the ask price.

The difference between the bid price and the ask price.

If the bid price is $0.50 and the ask price (offer price) is $0.60. The bid-ask spread in this example is 10 cents. The spread in percentage is 100x$0.05/$0.6 or 8.3%.

If the bid price is $0.50 and the ask price (offer price) is $0.60. The bid-ask spread in this example is 10 cents. The spread in percentage is 100x$0.05/$0.6 or 8.3%.

If the bid price is $0.50 and the ask price (offer price) is $0.60. The bid-ask spread in this example is 10 cents. The spread in percentage is 100x$0.05/$0.6 or 8.3%.

A spread is the difference between the prices quoted for sale (bid) and purchase (offer) for stocks, futures, options and currency pairs.

A bear call spread is a type of options strategy used when a decline in the price of the underlying asset is expected. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price.

A bull call spread is an options strategy that involves purchasing call options at a specific strike price while also selling the same number of calls of the same asset and expiration date but at a higher strike. A bull call spread is used when a moderate rise in the price of the underlying asset is expected.

It contains two calls with the same expiration but different strikes. The strike price of the short call is higher than the strike of the long call.

Vertical Put Spread consists of purchasing one put in hopes of profiting from a decline in the underlying asset, and writing another put with the same expiration, but with a lower strike price, as a way to offset some of the cost.

A put spread is an option spread strategy that is created when equal number of put options are bought and sold simultaneously. The maximum profit generated by put spreads are limited.

A Black Scholes is an option pricing model initially developed by Fischer Black and Myron Scholes for securities options and later refined by Black for options on futures.

An option pricing model initially developed by Fischer Black and Myron Scholes for securities options and later refined by Black for options on futures.

A Block Trade is a large transaction that is negotiated off an exchange's trading facility and then posted on the trading facility, as permitted under exchange rules.

Search InvestingPie
Search
Share on Twitter Share on Facebook Share on Google Plus
New comments
Very informative
05-03 04:23 by Liam
The same day Trump spoke with Reynolds
01-29 04:43 by Yavor737347
More from InvestingPie
Advertise with us

Find out our advertising solutions. Our Team will be in touch with you with a program that suits your needs. Please contact us.