Here is a set of terms Investors need to understand when starting to participate in the commodity derivatives market:
A. BASIC TERMS OF TERMS
An agreement between two parties to buy or sell a quantity of a commodity at a certain time in the future at a predetermined price at the time of the contract agreement.
A forward contract that has been standardized on contract parameters such as: Contract size, futures months, price step, currency unit, etc. These contracts are listed and traded at the Exchange. Commodity translation.
A contract that gives the holder the right (not the obligation) to buy or sell an underlying asset at a certain time in the future at a pre-determined price.
An agreement between two parties whereby the parties agree to make periodic payments to each other, or agree to exchange future cash flows in a predetermined manner and for a specified period of time. estimate.
A document that describes the detailed characteristics of a contract prescribed by the Commodity Exchange.
The amount of the underlying commodity traded in each contract.
The smallest difference between two prices of a contract. Each contract will have a different price step and is published in the Contract Specification.
Is the fluctuation of the specified contract price during the trading day.
Is the total contract volume arising in the transaction but not yet fulfilled or fulfilled the delivery obligation.
The maximum number of contracts for each commodity or all commodities that a trading account is allowed to hold at a time.
It is the execution of counter-trades in order to partially or completely close an open position.
Is the process of recording transactions, confirming positions and calculating financial obligations between the parties to the transaction.
Is the price determined by the Commodity Exchange at the end of the trading day to calculate the daily profit and loss of positions.
Is the ratio determined as a percentage between the margin net worth and the required margin at a specified time.
The date on which the holder of the purchase contract begins to participate in the physical delivery of goods. If the buyer does not want to fulfill the obligation to deliver the physical goods, the holder of the buy contract will have to close off all his open positions.
The date on which the contract holders begin to participate in the physical delivery of goods. If they do not want to fulfill the obligation to deliver physical goods, the parties holding the contract will have to close all their open positions.
B. TERMS OF TRANSACTION INFORMATION ONLY
The party that will have to perform the obligation to sell/buy the quantity of goods at the committed price (strike price) in the call/put option transaction if the buyer decides to exercise the right. The option seller is entitled to the option premium (premium) paid by the option buyer immediately upon selling the option (whether or not the buyer exercises the option). The option seller will be required to make a deposit to secure the performance obligation of the sold option contract and is revalued on a daily basis.
Is the party with the right to exercise (but not the obligation) to buy/sell the quantity of goods at the price committed in the call/put option transaction. The option buyer will have to pay the option premium to the seller immediately upon purchasing the option (whether exercised or not).
Is the fluctuation of the specified futures contract price during the trading day, expressed as a percentage (%) compared to the reference price.
The exchange rate information received by the client in the trading platform includes both of those prices. The current spread of a currency pair or asset class is an important part of its liquidity.
The effect of different price movements on certain asset portfolios and avoid market volatility. In fact, hedging refers to buying and selling at forward prices or opening positions with similar assets. Hedging becomes popular as market volatility increases.
The cumulative indicator is based on the volume index and reflects the relationship between the volume of contracts executed and the price movement of the asset.
Costs to be incurred by Investors when trading commodity derivatives.
The price of one or more goods aggregated and offered by an organization and referenced by international business practice in international transactions.
A technical indicator designed to gauge the strength of money inflows into an asset by comparing price increases and decreases over a certain period of time, taking into account the volume of transactions.
The indicator shows changes in the current market volatility, it confirms the trend, shows the possibility of trend continuation or stops, periods of consolidation, increases volatility on breakouts, as well as indicates local peaks and troughs.
Technical indicators are an integral part of technical analysis. Their goal is to help traders forecast market trends. There are a large number of directives in use. Some traders prefer to use previously well-reviewed indicators, others experiment with new ones. Examples of indicators: B. Williams indicator, oscillator indicator, trend indicator and volume indicator. The technical indicator created by quite famous trader Bill Williams is based on several quite successful systems and strategies. Three moving averages with different periods are built on the average price. This indicator due to the behavior in the market is quite similar to the behavior of the alligator. Thus, the body of the “Alligator” is divided into three parts: teeth, jaws, and lips. This indicator is used to help traders identify trends in the market and make sound decisions. The Alligator indicator is useful when traders are looking for the right time to enter the market, or want to determine the strength of a trend or establish Stop Loss levels.
The process of transferring trading positions is open from day to day.
In case of strong market fluctuations affecting the interests of customers, MXV will apply an automatic trading suspension mechanism based on the change of futures trading prices. MXV will announce the mechanism to activate trading suspension and when to apply this mechanism.
It is a contract between two sellers that pays the buyer the difference between the current price of the underlying asset and the price at the time of signing that contract in the event of an increase in price, and vice versa. With CFD traders can trade assets without directly owning it.
A member uses his or her trading system to connect directly with the Commodity Exchange’s trading system or directly uses the Commodity Exchange’s trading system to perform commodity transactions.
Trades in Futures, Swaps, Options, or any combination of the above commodity derivatives, whose underlying asset is a commodity or indices. price.
Are commodities that are eligible to be included as the underlying assets of the Futures Contract. The commodity used for delivery on the final settlement date of the Futures Contract is a commodity of comparable quality to the commodity used as the underlying asset and meets the conditions set forth by the Exchanges. commodity translation.
Are physical products that are used as the underlying assets for commodity derivatives contracts.
A technology system used for commodity trading.
C. RISK MANAGEMENT TERMS
This order allows you to fix the financial result when the instrument reaches a certain price. The parameters of “Stop Loss” can be set before or after the option is opened. “Stop Loss” helps traders avoid large losses, automatically closing orders. Mandatory condition when setting up a “Stop Loss” order – the price of the financial instrument should not be lower than the current market price for a sell order and not higher for a buy order.
Means that the Investor’s open positions are evaluated (compare the trading price with the assessed price) on a daily basis by the Clearing Center. Temporary Gains/Lots calculated from this assessment will be debited or credited to Investor’s Margin Account on a daily basis.
Is the minimum value of the indicator or price at a certain area on the chart. It is easy to see that the price on the chart moves in a zigzag pattern (not simply up-down), forming peaks and troughs. To maintain the uptrend, the peaks and troughs will alternately increase and vice versa, when reversing to the downtrend, the troughs and peaks will alternately decrease. To be sure that the trend has changed, it is necessary to retest the bottom (Bottom).
The price a broker offers a trader to buy a financial instrument. It is understood as the price at which the seller is willing to sell his product. On the quote, this price is on the right. Ask price is always higher than Bid price.
The price at which a trader can sell a financial instrument. At the quote, the Bid Price is written to the left and will always be lower than the Ask price. Market orders, close orders, pending orders as well as Stop Loss and Take Profit are executed at the Bid price.
Is the price published by the Clearing House for each contract at a certain time of each trading session and used as a basis for evaluating open positions.
Is the difference between the price of the futures contract and the value of the underlying asset. Over time, the “basis” undergoes certain changes. Therefore, the guaranteed price may differ from the spot price at the time of purchase of the futures contract. The longer the time between opening and closing a futures option, the more secure the price will be.
Is the price of the contract determined from the result of order matching.
Is the price of the Future Contract listed by the customers on the trading system.
Is the price determined by the Commodity Exchange and used as the basis for determining the highest price (ceiling price) and lowest price (floor price) during the trading day.
Is the matching price for futures contracts between customers through the Commodity Exchange’s trading system.
Is the price determined at the end of the trading day to calculate the daily profit and loss of positions.
Is the price determined at the last trading day to determine the payment obligation when performing the contract.
Used to execute orders with leverage, which gives clients the opportunity to trade with amounts significantly larger than the amount on the account.
This term means the business hours specified by the Commodity Exchanges.
Is the maximum total volume of commodity derivative contracts (also known as total open positions) that an Investor is allowed to hold at a time.
