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ACC American Commodities Corporation.
ALJ See Administrative Law Judge.
AP See Associated Person.
ARA See Associate Responsibility Action.
ATM See Agricultural Trade-Option Merchant.
Abandon The act of an option holder in electing not to exercise or offset an option.
Accommodation Trading Non-competitive trading entered into by a trader, usually to assist another with illegal trades.
Action Type An Action Type is a uniform category of rule violation, such as floor recordkeeping violations, sales practice violations and trade practice violations.
Actuals The physical or cash commodity, as distinguished from a commodity futures contract. See also Cash Commodity or Spot Commodity.
Adjudication The determination of a controversy and a pronouncement of a judgment based on evidence presented. Implies a final judgment of the court or other body deciding the matter, as opposed to a proceeding in which the merits of the cause of action were not reached.
Adjudication Committee A committee empowered by a self-regulatory organization for the purpose of determining an issue of fact and reaching a decision on the basis of evidence presented.
Administrative Hearing A proceeding wherein evidence is taken for the purpose of determining an issue of fact and reaching a decision on the basis of that evidence. An Administrative Hearing may take place outside the judicial process, before officials who have been granted judicial authority expressly for the purpose of conducting such hearings.
Administrative Law Law created by administrative agencies by way of rules, regulations, orders and decisions.
Administrative Law Judge (ALJ) The presiding officer of an administrative hearing. An ALJ does not sit as a law judge, and his power is essentially one of recommendation. In the federal system, the ALJ is empowered to administer oaths and affirmations, issue subpoenas, rule on evidence presented, take depositions, regulate the course of the hearing and make or recommend decisions.
Affidavit A written statement made under oath.
Affirm The act of an appellate body upholding a decision of a trial court, an adjudication committee or a lower appellate court is called affirming the decision.
Against Actuals A transaction generally used by two hedgers who want to exchange futures for cash positions. Also referred to as Exchange for Physicals or Versus Cash.
Aggregation The policy under which all futures positions owned or controlled by one trader or group of traders are combined to determine reporting status and speculative limit compliance.
Agricultural Trade-Option Merchant (ATM) An individual or organization which solicits or offers trade options for sale. Must be registered with the Commodity Futures Trading Commission.
Aid and Abet To actively, knowingly, intentionally, or purposefully facilitate or assist another individual in the commission or attempted commission of a crime.
Allowances The discounts (premiums) allowed for grades or locations of a commodity lower (higher) than the par (or basis) grade or location specified in the futures contract. See also Differentials.
Answer A written response to a demand or a third party claim. A written submission filed by a respondent named in a Complaint which answers each allegation in the Complaint by admitting, denying or averring lack of sufficient knowledge to admit or deny the allegation.
Appeal A request to an appellate body to review a lower court's or an adjudication committee's decision.
Appeals Committee A committee empowered by a self-regulatory organization for the purpose of hearing and deciding appeals from and reviews of decisions by hearing committees.
Appellant The party bringing the appeal.
Appellate About appeals; an appellate court has the power to review the judgment of a lower court or tribunal.
Appellee The party against whom an appeal is brought.
Approved Delivery Facility Any bank, stockyard, mill, storehouse, plant, elevator or other depository that is authorized by an exchange for the delivery of commodities tendered on futures contracts.
Arbitrage The simultaneous purchase and sale of similar commodities in different markets to take advantage of a price discrepancy.
Arbitration The process of settling disputes between parties. NFA's arbitration program provides a forum for resolving futures-related disputes between members or between members and customers.
Arbitration Panel The arbitrators (one or three) appointed by NFA to hear and decide disputes brought to NFA for arbitration.
Arbitrator A person chosen to decide disputes between parties in an arbitration proceeding.
Asian Option An option whose payoff depends on the average price of the underlying asset during some portion of the life of the option.
Ask Also called Offer. Indicates a willingness to sell a futures contract at a given price. See also Bid.
Assignable Contract One which allows the holder to convey his rights to a third party. Exchange-traded commodities are not assignable.
Associate Member A person who is associated with an NFA Member within the meaning of the term associated and who is required to be registered as an associated person with the Commodity Futures Trading Commission.
Associate Responsibility Action (ARA) An action whereby an NFA Associate Member may be suspended from membership or may otherwise be directed to take remedial action when the President of NFA, with the concurrence of the Executive Committee, has reason to believe that the action is necessary to protect the commodity futures markets, customers or other Members or Associates of NFA. This may be a summary action.
Associated Person (AP) An individual who solicits orders, customers or customer funds (or who supervises persons so engaged) on behalf of a futures commission merchant, a retail foreign exchange dealer, an introducing broker, a commodity trading advisor or a commodity pool operator and who is registered with the CFTC. An AP is, in effect, anyone who is a salesperson or who supervises salespersons for any of these categories of individuals or firms. The registration requirements apply to any person in the supervisory chain-of-command and not only to persons who directly supervise the solicitations of orders, customers or funds.
At the Market An order to buy or sell a futures contract at whatever price is obtainable when the order reaches the trading floor. See also Market Order.
At the Money An option with a strike price which is equal to, or approximately equal to, the current market price of the underlying futures contract.
Audit Trail The record of trading information identifying, for example, the brokers participating in each transaction, the firms clearing the trade, the terms and time of the trade, and, ultimately, and when applicable, the customers involved.
Award The written decision of the arbitrators.