Futures trading
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Understanding Cheapest to Deliver (CTD) in Futures Contracts
What Is Cheapest to Deliver? The term cheapest to deliver (CTD) refers to the cheapest security delivered in a futures contract to a long position to satisfy the contract specifications. It is
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Understanding Pay/Collect in Futures Trading: A Comprehensive Guide
What Is Pay/Collect? Pay/collect is an abbreviated reference to the payment and collection of funds—after futures positions have been marked to market (MTM)—between clearing members and their r
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Inverse Sector ETFs: A Strategy for Navigating Bear Markets
Inverse ETFs move in the opposite direction of major indexes like the S&P 500 or Dow Jones Industrial Average. By buying an inverse ETF, you can protect yourself and/or profit fro
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Natural Gas Liquids (NGL): Definition, Types & Applications
What Are Natural Gas Liquids? Natural gas liquids (NGL) are components of natural gas that are separated from the gas state in the form of liquids. This separation occurs in a field facility or
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Understanding Open Interest in Futures Markets: A Trader's Guide
Open interest, the total number of open contracts on a security, applies primarily to the futures market. Open interest is a concept all futures traders should understand because it is often used to
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CFDs: Understanding Contracts for Differences | [Your Brand/Company]
What Is a Contract for Differences (CFD)? A contract for differences (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and c
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Futures Contracts: How to Hedge Your Investments
A futures contract is a standardized, legal agreement to buy or sell an asset at a predetermined price at a specified time in the future. At this specified date, the buyer must purchase the ass
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Floor Trader: Definition, Role & How They Work
What Is a Floor Trader? A floor trader is an exchange member who executes transactions from the floor of the exchange, exclusively for their own account. Floor traders used to use the
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Understanding Zero-Sum Games: Definition, Examples & Implications
What Is a Zero-Sum Game? Zero-sum is a situation in game theory in which one person’s gain is equivalent to another’s loss, so the net change in wealth or benefit is zero. A zero-sum game may h
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Futures Market: Definition & How Commodity Contracts Work
What Is a Futures Market? A futures market is an auction market in which participants buy and sell commodity and futures contracts for delivery on a specified future date. Futures are exchange-
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Commodities Trading: A Beginner's Guide to Diversification
Commodities are an important aspect of most Americans daily life. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of
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Understanding Futures Contracts: A Comprehensive Guide
What Is a Futures Contract? A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future. Futures
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Understanding Cash Settlements in Futures and Options
What Is a Cash Settlement? A cash settlement is a settlement method used in certain futures and options contracts where, upon expiration or exercise, the seller of the financial instrument does
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Omnibus Accounts: Definition, Benefits & How They Work
What Is an Omnibus Account? An omnibus account allows for managed trades of more than one person, and allows for anonymity of the persons in the account. Omnibus accounts are used by futures co
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Hedging vs. Speculation: Understanding the Key Differences
Hedging vs. Speculation: An Overview Hedging and speculation refer to strategic activities relating to investing, and speculators and hedgers describe traders and investors of a particular sort
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Initial Margin Explained: What You Need to Know
What Is Initial Margin? Initial margin is the percentage of the purchase price of a security that must be covered by cash or collateral when using a margin account. The current initial margin r
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Renewable Resources: Definition, Types & Importance
What Is a Renewable Resource? A renewable resource is one that can be used repeatedly and does not run out because it is naturally replaced. Examples of renewable resources include solar, wind,
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Margin Trading: A Comprehensive Guide for Investors
What Is Buying on Margin? Buying on margin occurs when an investor buys an asset by borrowing the balance from a bank or broker. Buying on margin refers to the initial payment made to the broke
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Contango vs. Backwardation: Understanding Futures Curve Dynamics
Contango vs. Normal Backwardation: An Overview The shape of the futures curve is important to commodity hedgers and speculators. Both care about whether commodity futures markets are contango m
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Forward Rate vs. Spot Rate: Understanding the Key Differences
Forward Rate vs. Spot Rate: An Overview The precise meanings of the terms forward rate and spot rate are somewhat different in different markets. But what they have in common is that they refer
Futures trading
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Unit Price Contracts: Definition, Benefits & When to UseNot all construction jobs can be perfectly priced at the outset. Often, the scope of work is hard to pin down u...
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Schedule D: Capital Gains & Losses - IRS Reporting Guide
You survived a turbulent stock market, and made a little profit on your investments. Buckle up and get ready to report your transactions to the Internal Revenue Service (IRS) on Schedule D and see ho...
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Free Unlimited Coffee Subscription - Limited Time Offer (Ends 2021)Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opi...
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Car Insurance for Teens: A Parent's Guide to Affordable CoverageTake (some of) the terror out of letting your teenager behind the wheel and figure out how to cover them in case of an accident. See car safety pictures. No two words can fill parents with mor...