P C M O F N O R T H P L A T T E 3 0 8 . 5 3 4 . 7 2 8 2

GLOSSARY
ARBITRAGE	The simultaneous purchase and sale of identical or equivalent financial instruments or commodity futures in order to benefit from a discrepancy in their price relationship.
ASSIGNED TRADE	A short option position which is converted to a futures position at the traded strike price If a CALL . . . the subsequent futures position will a sell (short) at the strike price. If a PUT . . . the subsequent futures position will a buy (long) at the strike price.
ASK	Also called "offer". Indicates a willingness to sell a futures contract at a given price.
ASSOCIATED PERSION	A person employed by, and soliciting business for, an Inroducing Broker or a Futures Commission Merchant and is registered with the NFA.
BACK MONTH	The futures or options on futures months being traded that are furthest from expiration
BEAR	One who believes prices will decrease.
BEAR MARKET	A market in which prices are declining.
BEAR SPREAD	Typically represents selling a nearby contract while buying a deferred contract.
BID	The price that the market participants are willing to pay.
BREAK	A drop in market price.
BULL	One who expects prices to rise.
BULL MARKET	A market in which prices are rising.
BULL SPREAD	Typically represents buying a nearby contract while selling a deferred contract.
BUY ON CLOSE	To buy at the end of a trading session at a price within the closing range.
BUY ON OPENING	To buy at the beginning of a trading session at a price within the opening range.
CABINET TRADE (CAB)	A trade that allows options traders to liquidate deep out-of-the-money options by trading the option at a price equal to one-half tick.
CALL	An option to buy a commodity, security or futures contract at a specified price any time between now and the expiration date of the option contract.
CASH COMMODITY	The actual physical commodity as distinguished from a futures commodity.
CLOSE	The period at the end of the trading session.
CLOSING RANGE	The high and low prices, or bids and offers, recorded during the period designated as the official close.
COMMISSION	The one-time fee charged by a broker to a customer when a futures or options on futures position is liquidated either by offset or delivery.
CFTC	The Commodity Futures Trading Commission as created by the Commodity Futures Trading Commission Act of 1974. This government agency currently regulates the US commodity futures industry.
CONTRACT	Unit of trading for a financial or commodity future. Also, actual bilateral agreement between the parties (buyer and seller) of a futures or options on futures transaction as defined by an exchange.
CONTRACT MONTH	Unit of trading for a financial or commodity future. Also, actual bilateral agreement between the parties (buyer and seller) of a futures or options on futures transaction as defined by an exchange.
DAY ORDER	An order that is placed for execution during only one trading session. If the order cannot be executed that day, it is automatically cancelled.
DAY TRADING	Refers to establishing and liquidating the same position or positions within one day's trading, thus ending the day with open position in the market.
DEFERRED	Another term for "back months."
DELIVERY	The tender and receipt of an actual commodity or financial instrument, or cash in settlement of a futures contract.
DELIVERY MONTH	The month which a contrract expires.
EXCHANGE	An entity which provides for an auction of trades, such as the Chicago Board of Trade.
EXERCISE (STRIKE) PRICE	The price at which the holder (buyer) may purchase or sell the underlying futures contract upon the exercise of an option.
EXERCISED TRADE	A long option position which is converted to a futures position at the traded strike price If a CALL . . . the subsequent futures position will a buy (long) at the strike price. If a PUT . . . the subsequent futures position will a sell (short) at the strike price.
EXPIRATION DATE	The last day that an option may be exercised into the underlying futures contract. Also, the last day of trading for a futures contract.
EXPIRED OPTION	An option position that has surpassed the expiration date. Typically with the premium at cabinet (no value).
FIRST NOTICE DAY	First day for which position holders can submit intent to make or take delivery of the underlying cash product.
FLOOR BROKER	An exchange member who is paid a fee for executing orders for Clearing Members or their customers. A Floor Broker executing orders must be licensed by the CFTC.
FLOOR TRADER	An exchange member who generally trades only for his/her own account or for an account controlled by him/her. Also referred to as a "local."
FUTURES	A Futures Contract is an agreement between a buyer and a seller to receive and deliver on a future date a specified amount of a product at an agreed price.
FUTURES COMMISSION MERCHANT	A firm or person engaged in soliciting or accepting and handling orders for the purchase or sale of futures contracts, subject to the rules of a futures exchange and, who, in connection with solicitation or acceptance of orders, accepts any money or securities to margin any resulting trades or contracts. The FCM must be licensed by the CFTC.
HALF-TURN	A single transaction (either initiating a long or short position).
HEDGE	Hedgers are individuals and firms that make purchases and sales in the futures market solely for the purpose of establishing a known price level--weeks or months in advance--for something they later intend to buy or sell in the cash market.
HIGH	The highest price traded during a defined period, such as a trading session.
HOLDER	One who purchases an option.
INITIAL MARGIN	The funds required when a futures position (or a short options on futures position) is opened.
INTRODUCING BROKER	Aka IB. A registered entity with the NFA. Has a clearing arrangement with an FCM. If non- guaranteed, the IB might introduce clients through multiple FCM's.
LIMIT ORDER	An order given to a broker by a customer that specifies a price; the order can be executed only if the market reaches or betters that price.
LIMIT PRICE	The maximum amount the contract price can change, up or down, during one trading session, as stipulated by Exchange rules.
LIQUIDATION	Any transaction that offsets or closes out a long or short futures position.
LONG	One who has bought a futures or options on futures contract to establish a market position through an offsetting sale; the opposite of Short.
LONG HEDGE	The purchase of a futures contract in anticipation of an actual purchase in the cash market. Used by processors or exporters as protection against and advance in the cash price.
LOW	The lowest price traded in a contract during a defined period, such as a trading session.
MAINTENANCE MARGIN	A sum, usually smaller than--but part of--the initial margin, which must be maintained on deposit in the customer's account at all times. If a customer's equity in any futures position drops to, or under, the maintenance margin level, a "margin call" is issued for the amount of money required to restore the customer's equity in the account to the initial margin level.
MARGIN	Funds that must be deposited as a margin by a customer with his or her broker, by a broker with a clearing member, or by a clearing member, with the Clearing House. The margin helps to ensure the financial integrity of brokers, clearing members and the Exchange as a whole.
MARGIN CALL	A demand for additional funds because of adverse price movement.
MARK-TO- MARKET	The daily adjustment of margin accounts to reflect profits and losses.
MARKET ORDER	An order for immediate execution given to a broker to buy or sell at the best obtainable price.
MINIMUM PRICE FLUCTUATION	Smallest increment of price movement possible in trading a given contract, often referred to as a tick.
MIT	Market-If-Touched. A price order that automatically becomes a market order if the price is reached.
NEARBY	The nearest active trading month of a futures or options on futures contract. Also referred to as "lead month."
NFA	National Futures Association. Regulates and audits brokers in the futures industry.
OFFER	Also called "ask". Indicates a willingness to sell a futures contract at a given price.
OFFSET	Selling if one has bought, or buying if one has sold, a futures or options on futures contract.
OPEN INTEREST	Total number of futures or options on futures contracts that have not yet been offset or fulfilled by delivery. An indicator of the depth or liquidity of a market (the ability to buy or sell at or near a given price) and of the use of a market for risk- and/or asset-management.
OPEN ORDER	An order to a broker that is good until it is canceled or executed.
OPENING	The period at the beginning of the trading session during which all transactions are considered made or first transactions were completed.
OPENING PRICE	The range of prices at which the first bids and offers were made or first transactions were completed.
OPTION	A contract giving the holder the right, but not the obligation, hence, "option," to buy or sell a futures contract in a given commodity at a specified price at any time between now and the expiration of the option contract.
OUT TRADES	A situation that results when there is some confusion or error on a trade. A difference in pricing, with both traders thinking they were buying, for example, is a reason why an out- trade may occur.
POSITION	An interest in the market, either long or short, in the form of open contracts.
PREMIUM	1.) The excess of one futures contract price over that of another, or over the cash market price. 2.) The amount agreed upon between the purchaser and seller for the purchase or sale of a futures option --purchasers pay the premium and sellers (writers) receive the premium.
PUT	An option to sell a commodity, security, or futures contract at a specified price at any time between now and the expiration of the option contract.
P+S	Purchase and Sell of a contract. See OFFSET.
RALLY	An upward movement of prices following a decline; the opposite of a reaction.
RANGE	The high and low prices or high and low bids and offers, recorded during a specified time.
REACTION	A decline in prices following an advance. The opposite of rally.
REGISTERED REPRESENTATIVE	A person employed by, and soliciting business for, an Inroducing Broker or a Futures Commission Merchant and is registered with the NFA.
ROUND-TURN	Procedure by which a long or short position is offset by an opposite transaction or by accepting or making delivery of the actual financial instrument or physical commodity. ( see P+S )
SCALP	To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day, hour or even just a few minutes.
SELLER (OPTION)	See WRITER
SETTLEMENT PRICE	A figure determined by the closing range that is used to calculate gains and losses in futures market accounts. Settlement prices are used to determine gains, losses, margin calls, and invoice prices for deliveries.
SHORT	One who has sold a futures contract to establish a market position and who has not yet closed out this position through an offsetting purchase; the opposite of long.
SHORT HEDGE	The sale of a futures contract in anticipation of a later cash market sale. Used to eliminate or lessen the possible decline in value of ownership of an approximately equal amount of the cash financial instrument or physical commodity.
SPECULATOR	One who attempts to anticipate price changes and, through buying and selling futures contracts, aims to make profits; does not use the futures market in connection with the production, processing, marketing or handling of a product. The speculator has no interest in making or taking delivery.
SPREAD	The simultaneous purchase and sale of futures contracts for the same commodity or instrument for delivery in different months, or in different but related markets. A spreader is not concerned with the direction in which the market moves, but only with the difference between the prices of each contract.
STOP ORDER	An order to buy or sell at the market when and if a specified price is reached.
TICK	Refers to a change in price, either up or down.
TREND	The general direction of the market.
VOLUME	The number of transactions in a futures or options on futures contract made during a specified period of time.
WRITER	An individual who sells an option.