Weather futures are financial contracts that allow traders to speculate on the future price of a weather-related commodity, such as natural gas or heating oil. The price of these contracts is based on factors such as the expected temperature and precipitation for a specific location and time period. What is a CME weather? A CME … Read more
When a commodity is traded on a futures exchange, the price that is quoted is the cash price. The cash price is the price at which the commodity is currently trading in the spot market. The cash price is used as the basis for the futures price, which is the price at which the commodity … Read more
A zero-sum game is a mathematical representation of a situation in which each participant’s gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants. In game theory and economic theory, a zero-sum game is a situation in which each participant’s gain or loss of utility … Read more
A retender definition is a statement issued by a commodities exchange that clarifies the rules governing the retendering process for a particular commodity. Retendering is a process whereby a commodities exchange allows trading members to submit new bids for a contract that they have already been awarded. This can be done in order to try … Read more
A floor trader is an individual who trades futures contracts or other derivatives products on behalf of their own account, directly on the floor of an exchange. Floor traders are typically very experienced and well-capitalized traders who have extensive knowledge of the market and the products they trade. Floor traders generally trade for their own … Read more
Futures contracts are used in trading to hedge against risk or speculate on the price of an asset.. Futures Contract Definition: Types, Mechanics, and Uses. When can you trade futures? You can trade futures on most major exchanges during regular trading hours. Some exchanges also offer extended trading hours for futures contracts, which may be … Read more
An omnibus account is a futures account in which all the transactions of a single customer are combined into one account. This is done for convenience and to save on transaction costs. The account is managed by a single broker, who is responsible for all the trades. What is an omnibus crypto wallet? An omnibus … Read more
Eligible Contract Participants (ECPs) are generally institutions, like banks and insurance companies, rather than individuals. ECP status is important for two reasons. First, ECPs are not subject to many of the restrictions placed on regular investors, such as the prohibition on naked short selling. Second, ECPs can trade in products that are not registered with … Read more
A cash settlement is a type of financial transaction in which two parties agree to exchange cash according to the terms of a contract. The contract may be for the purchase or sale of a security, commodity, or other asset, or it may be a derivatives contract. Derivatives contracts are financial instruments whose value is … Read more
A commodity trader is an individual or firm who trades in commodities for profit. Commodity traders can be either speculators, who take bets on the future price of a commodity, or hedgers, who trade in order to protect themselves from price fluctuations. There are a variety of different commodities that can be traded, including metals, … Read more
