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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.
L
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Landed Price :-
The actual delivered cost of oil to a refiner,
taking into account all costs from production or purchase to the refinery.
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Last Notice Day :-
The final day on which notices of intent
to deliver on futures contracts may be issued.
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Last Trading Day :-
The final trading day for a particular delivery
month futures contract or options contract. Any futures contracts left
open following this session must be settled by delivery.
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Lease :-
Financial instrument based upon the contango
in the gold or silver market to finance precious metals inventory.
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Legal Tender :-
Coins that have been authorized by government.
This includes circulating coins and all commemorative coins legislated
by government.
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Licensed warehouses :-
Warehouses which have been approved for the
storage of copper deliverable against the COMEX Division copper futures
contract.
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Licensed Weighmaster :-
An organization approved by the Exchange
to witness and verify the weighing of copper delivered against the COMEX
Division copper futures contract.
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Limit :-
The maximum daily allowable amount a futures
price may advance or decline in any one day's trading session. Limits
are also placed on the number of positions a participant may hold in the
market.
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Limit Order :-
A contingent order for an options or futures
trade specifying a certain maximum (or minimum) price, beyond which the
order (buy or sell) is not to be executed. .
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Liquidation :-
The closing out of futures and options positions.
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Liquidity :-
A market is said to be "liquid" when it has
a high level of trading activity and open interest.
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Liquid Market :-
A market characterized by the ability to
buy and sell with relative ease.
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Long :-
1) The market position of a futures contract
buyer whose purchase obligates him to accept delivery unless he liquidates
his contract with an offsetting sale. 2) One who has bought a futures
contract to establish a market position. 3) In the options market, position
of the buyer of a call or put options contract. Opposite of short.
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Long Hedge :-
Purchase of futures against the future market
price purchase or fixed price forward sale of a cash commodity to protect
against price increases.
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Long the Basis :-
A person or firm that has bought the spot
commodity and hedged with a sale of futures is said to be long the basis.
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Lot :-
Any definite quantity of a futures commodity
of uniform grade; the standard unit of trading.
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