Commodities Futures and Options Brokerage

Glossary


CME Group
actuals
An actual physical commodity someone is buying or selling, e.g., soybeans, corn, gold, silver, Treasury bonds, etc.
adjusted futures price
The cash-price equivalent reflected in the current futures price. This is calculated by taking the futures price times the conversion factor for the particular financial instrument (e.g., bond or note) being delivered.
against actuals
A transaction generally used by two hedgers who want to exchange futures for cash positions. Also referred to as "Exchange for Physicals" (EFP) or "versus cash".
Allocation Claim System (ACS)
CME's electronic give-up system. ACS allows executing firms to give-up (allocate) trades at the execution price to the designated carrying firms(s), utilizing their current trade entry systems and CME's Trade Management System. ACS may be utilized for trades executed and given up to a single firm, as well as trades given up to multiple firms (see Give-up System).
american-style option
Type of option contract that can be exercised at the buyer's discretion on any trading day up to and including the expiration date. This differs from a European style option, which may only be exercised on its expiration date.
all or none (AON)
An order type, if the order can execute in total, then it executes. Otherwise it stays in the order book until it can execute in total.
application program interface (API)
The specific method prescribed by a computer operating system or by an application program by which a programmer writing an application program can communicate with the operating system or another application.
Application Service Provider (ASP)
Application service provider (ASP); a company that offers individuals and firms access via the Internet to applications and related services that would otherwise have to be located in their personal computers.
approved delivery facility
Any bank, depository, stockyard, mill, warehouse, plant or elevator authorized by the Exchange for delivery of Exchange contracts.
approved warehouse
Any warehouse which has been officially approved by the exchange and from which actual deliveries of commodities may be made on futures contracts.
arbitrage
The simultaneous purchase of cash, futures, or options in one market against the sale of cash, futures or options in a different market in order to profit from a price disparity.
ask price
Also called the "offer." Indicates a willingness to sell a futures or options on futures contract at a given price.
as-of trade
An unmatched trade from a previous day that is resubmitted to the CME clearing system; trade is submitted "as of" the original trade date.
assignment (options)
The process by which the CME clearing house, in response to a long exercising its option, randomly selects a seller to fulfill its obligation to buy or sell the underlying futures contract at its strike price. The assigned seller of a put must buy the underlying futures contract; the assigned seller of a call must sell the underlying futures contract.
assignments (delivery)
The process by which the CME clearing house selects the long position to accept delivery on a contract for which a seller has submitted a delivery notice.
Associated Person (AP)
A person, commonly called a commodity broker, associated with and soliciting customers and orders for a futures commission merchant or introducing broker. The AP must pass a Series 3 examination, be licensed by the Commodity Futures Trading Commission and be a member of the National Futures Association.
At-the-money
An option with a strike price equal to the underlying futures price.
Automated trading system (ATS)
Automated trading system (ATS); a trading method in which a computer makes decisions and enters orders without a person entering those orders. This is a programmatic way of representing the trader.
average daily volume
Volume for a specified time period divided by the number of business days within that same time period.
Average Price System (APS)
CME Rule 553 enables clearing firms, in defined circumstances, to confirm average prices when multiple prices are received on the execution of an order or a series of orders ("series averaging") during a single trading session. The APS is the vehicle through which the exchange computes an average price. Firms then allocate such trades (at the average price) to the carrying firm(s) or may sub-allocate those trades to customer accounts on their books.
average temperature
The average of a day's high and low temperatures, from midnight to midnight.