Centralized securities trading markets where securities are bought and sold in an orderly manner through security brokers. Securities, including equities, bonds, options, closed-end funds, and futures, are traded based on bid and offer prices.
The Chicago Mercantile Exchange (CME), often nicknamed 'MERC,' is a prominent financial exchange that facilitates trading in various types of futures, futures options, and foreign currency futures contracts.
A distress sale occurs when assets, such as property, stocks, bonds, mutual funds, or futures positions, are sold urgently, often at a loss, due to immediate financial pressure.
An action taken to reduce or eliminate the risk involved in having an open position in a financial, commodity, or currency market.
An exchange in London where financial futures and options products are traded. Known for its influential role in the global financial markets.
In financial markets, a long position refers to the purchase of a security, commodity, or currency with the expectation that its value will increase over time. This term is often used in the context of stock trading, futures contracts, and foreign exchange markets.
A naked position, also known as an uncovered or open position, refers to the practice of entering into a derivatives contract—such as options or futures—without holding the underlying asset involved in the contract.
Netting is the process of offsetting matching sales and purchases against each other, particularly in the context of futures, options, and forward foreign exchange. It helps firms manage risks such as exchange-rate exposure and is often facilitated by a clearing house.
An underlying security refers to the financial instrument (like stocks, bonds, commodities, or indexes) on which derivatives such as options, futures, or other securities are based. It is the asset that must be delivered when specific financial contracts, like put options or call options, are exercised.
