o Lower - Prices for most contracts are significantly lower.
Put Option - An option that givesthe buyer the right to be short the underlying futures contractat a specific price (strike price) on or before the expirationdate. Put Option buyers are not obligated to be short, they havethe right to be short. See also "Call Option," and"Strike Price."
Rally - Upward price movement.
Range - The difference between thehighest and lowest prices recorded during a specified tradingperiod, such as the range for the day or week.
Re-Tender - Traders offering forsale on the open market, the commodity for which the trader wasissued a Notice of Intent to Deliver. If completed, a trader canliquidate their obligation to take delivery of the commodity. Canalso mean offering to buy a commodity after passing on an tender,such as South Korea re-tendering for 54,000 tonnes US Corn afterpassing at higher prices.
Roll Over - Moving from one deliverymonth in a futures contract to a delivery month farther away,such as a holder of long July corn offsetting that position andbuying a Sep contract. Usually done on the same order andexecuted at the same time.
Round Turn - Generally refers to theoffsetting of a position.
Sell Hedge - (Short Hedge) - sellingfutures contracts/call options or buying put options to protectagainst the possible decrease of physical commodity prices whichwill be sold in the future. See also "Hedge."
Settlement price - Established by anExchange as the official price for any particular future oroption at the close of each trading session. Also referred to asthe closing price. See also "Closing Range."
Short - To sell or have sold afutures contract and/or call options on futures, withoutoffsetting a long position. Can also mean to be in need of thephysical commodity such as a hog producer that buys soybean mealto feed hogs.
Short Covering - The buying offutures/options in order to offset a short position. Generallyreferred to when traders are taking a profit or trying to controllosses.
Sideways - Typically a period inwhich market prices trade within a range, and not trending upwardor downward.
Speculator - An individual whotrades futures/options contracts in an attempt to profit fromprice movement. The individual has no intention of owning orselling the physical commodity. Speculators assume risk fromHedgers and add liquidity to markets.
Spot Commodity - The physicalcommodity.
Spot Month - See "NearbyMonth."
Spot Price - The price at which aphysical commodity is selling at a given time and place.
Spread - Generally, the pricedifference of physical commodity values or over another physicalcommodity value or of one futures/options contract price overanother futures/options contract. See also "Premium."
Spreading - Buying and sellingfutures contracts on the same order to be executed at the sametime. An example is placing an order to buy Dec Corn futures @3.00 and to sell Sep Corn futures @ 3.00 (0 cents premium) withthe anticipation that Dec futures will gain value faster than SepCorn futures (as in prices building "Full Carry").
Squeeze - A characteristic of amarket where traders are forced to liquidate at unfavorableprices. An example would be a market where there are more longpositions willing to take delivery than commodity available fordelivery. Holders of short positions wanting to get out of themarket are forced to offset at higher prices.
Stop - (Stop Order) - A buy stop isan order that is placed above current prices and is activated(becomes a market order to buy) when prices reach that level orabove or are bid at that level or above. A sell stop is an orderthat is placed below the market and activated (becomes a marketorder to sell) when prices reach that level or below or areoffered at that level or below. Generally used to establish a newposition at a certain level or to manage risk once a position isestablished (prevent losses).
Stop Limit Order - Similar to theStop Order with the exception that the order must be filled atthe stop level or at better prices.
Strike - (Strike Price) - An option=sprice at which the underlying futures contract can be bought(call option) or sold (put option). An example would be a Nov8.00 Soybean Call, could be exercised to establish a long NovSoybean position at the $8.00 price level. See also "CallOption," "Put Option" and "Underlying FuturesContract."
Technical Analysis - The study ofcharts which includes price movement, volume, open interest, etc.Typically performed with graphical analysis as to anticipatefuture direction of prices or trends, etc.
Tender - An act on the part of theholder of short futures contracts to deliver the physicalcommodity in accordance to the contract specifications.Typically, the exchange or clearinghouse will issue to the oldestbuyer of long futures positions, the seller's "Notice ofIntention to Deliver." Can also mean offering to buy aphysical commodity, such as South Korea tendering for 54,000tonnes US Corn.
Tick - The least amount of pricemovement in a futures/options contract.
Time & Sales - An officialrecord of trading (buying & selling) including prices andtime.
Trading Limit - Can also mean thelargest quantity of a futures/options, which may be bought orsold by one person during one trading day and/or the largestfutures/options position any individual is allowed to hold at anytime under CFTC regulations. See also "Limit Move."
Trading Range - A range of pricesfor any given period such as the day's trading range from high tolow.
Trend - In prices, means the generaldirection, either upward or downward price movement. See also"Price Trend." Can also mean a pattern in which thesame characteristic is occurring over a period of time, such as agovernment's trend to reduce inflation by raising interest ratesover one year.
Underlying Futures Contract - Thespecific futures contract established (such as Dec Corn) when anoption buyer exercises their option right to buy or sell. Seealso "Call Option," "Put Option" and"Strike Price."
Vertical Call Spread - Spreading twodifferent strike prices of options of the same commodity andexpiration date.
Volume - The number of trades (buysor sells) in a given period such as one day