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Glossary of Terms
As the commerce and industry have evolved, each sector has developed a vocabulary that uniquely describes its products,
technology, and business practices, known as a jargon of respective domain. Often, these words seem incomprehensible to
the layman. This short lexicon is not meant to be a comprehensive dictionary of markets; nevertheless it would be a useful
guide for the beginners who are keen to no more about financial markets and futures industry.
E
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EFP :-
See Exchange of Futures for Physicals. .
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Electronic Trader :-
A person who is authorized to enter orders
for his own account and/or for customers' accounts on the NYMEX ACCESS(r)
electronic trading system.
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End-User :-
The ultimate consumer of petroleum products
or natural gas; most commonly refers to large commercial, industrial,
or utility consumers.
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European Option :-
An option that may be exercised only on its
expiration date.
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Exchange Certified Stocks :-
Stocks of commodities held in depositories
or warehouses certified by an Exchange-approved inspection authority as
constituting good delivery against a futures contract position. Current
total certified stocks are reported in the press for many important commodities
such as platinum.
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Exchange of Futures for
Cash :-
A transaction in which the buyer of a cash
commodity transfers to the seller a corresponding amount of long futures
contracts, or receives from the seller a corresponding amount of short
futures, at a price difference mutually agreed upon. In this way, the
opposite hedges in futures of both parties are closed out simultaneously.
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Exchange of Futures for Physicals :-
A futures contract provision involving an
agreement for delivery of physical product that does not necessarily conform
to contract specifications in all terms from one market participant to
another and a concomitant assumption of equal and opposite futures positions
by the same participants at the time of the agreement.
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Exercise :-
The process of converting an options contract
into a futures position.
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Exercise Price :-
The price at which the underlying futures
contract will be bought or sold in the event an option is exercised. Also
called the strike price.
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Expiration Date :-
The date and time after which trading in
an options contracts terminates, and after which all contract rights or
obligations become null and void.
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Extrinsic Value :-
The amount by which the premium exceeds its
intrinsic value. Also known as time value.
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