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CACE Citrus Associates of the Cotton Exchange
CBOT Chicago Board of Trade.
CEI Commodity Exchange, Inc. (also known as COMEX).
CFFE Cantor Financial Futures Exchange
CFTC See Commodity Futures Trading Commission.
CFTC Administrative Action An action taken by the Commodity Futures Trading Commission to enforce the provisions of the Commodity Exchange Act and Regulations.
CFTC Injunctive Action An action brought by the Commodity Futures Trading Commission in federal court to obtain an order requiring a party to refrain from doing or continuing to do a particular act or activity.
CME Chicago Mercantile Exchange.
COM Membership A Chicago Board of Trade membership that allows and individual to trade contracts listed in the commodity options market category.
COMEX Commodity Exchange, Inc. (also known as CEI).
CPO See Commodity Pool Operator.
CSCE Coffee, Sugar & Cocoa Exchange, Inc.
CTA See Commodity Trading Advisor.
Cabinet Trade A trade that allows options traders to liquidate deep out-of-the-money options by trading the option at a price equal to one-half tick.
Calendar Spread See Horizontal Spread.
Call Option The buyer of a call option acquires the right, but not the obligation, to purchase a particular futures contract at a stated price on or before a particular date.
Call Rule An exchange regulation under which an official bid price for a cash commodity is competitively established at the close of each day's trading. It holds until the next opening of the exchange.
Capital Gain The profit made from the sale of a capital asset, such as real estate, a house, jewelry or stocks and bonds.
Capping Effecting commodity or security transactions shortly prior to an option's expiration date; depressing or preventing a rise in the price of the commodity or security so that previously written call options will expire worthless and the premium the writer received will be protected.
Carrying Broker A member of a futures exchange, usually a clearinghouse member, through whom another broker or customer chooses to clear all or some trades.
Carrying Charge The cost of storing a physical commodity, such as grain or metals, over a period of time. Includes insurance, storage and interest on the invested funds as well as other incidental costs. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of the funds necessary to buy the instrument.
Carryover Grain and oilseed commodities not consumed during the marketing year and remaining in storage at year's end. These surpluses are "carried over" into the next marketing year and added to the quantities produced during that crop year.
Cash Commodity The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also known as Actuals.
Cash Contract A sales agreement for either immediate or future delivery of the actual product.
Cash Forward Sale A cash transaction common in many industries, including commodity merchandising, in which a commercial buyer and seller agree upon delivery of a specified quality and quantity of goods at a specified future date. A price may be agreed upon in advance, or there may be agreement that the price will be determined at the time of delivery.
Cash Market A place where people buy and sell the actual commodities. Also known as Forward Cash Contract. See also Spot Market.
Cash Price The price in the marketplace for actual cash or spot commodities to be delivered via customary market channels.
Cash Settlement A method of settling certain futures or options contracts whereby the seller pays the buyer the cash value of the commodity traded according to a procedure specified in the contract.
Charting The use of graphs and charts in the technical analysis of futures markets to plot price movements, volume, open interest or other statistical indicators of price movement. See also Technical Analysis.
Cheapest to Deliver Usually refers to the selection of bonds deliverable against an expiring bond futures contract.
Chooser Option An option which is transacted in the present but which at some prespecified future date is chosen to be either a put or call option.
Churning Excessive trading that results in the broker deriving a profit from commissions while disregarding the best interests of the customers.
Circuit Breaker A system of trading halts and price limits on equities and derivatives markets designed to provide a cooling-off period during large, intraday market declines.
Civil Action An action maintained to protect a private, civil right, or to compel a civil remedy, as distinguished from a criminal prosecution.
Civil Monetary Penalty Fines imposed by the Commodity Futures Trading Commission as a sanction for wrongdoing.
Claim A demand for money or other relief.
Claimant A party who asserts a right to money or property.
Clearing The procedure through which the clearing house or association becomes the buyer to each seller of a futures contract, and the seller to each buyer, and assumes responsibility for protecting buyers and sellers from financial loss by assuring performance on each contract.
Clearing House An agency or separate corporation of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting trade data.
Clearing Margin Financial safeguards to ensure that clearing members (usually companies or corporations) perform on their customers' open futures and options contracts. Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers. See also Customer Margin.
Clearing Member A member of an exchange clearing house. All trades of a non-clearing member must be registered and eventually settled through a clearing member.
Clearing Procedures Action Type A violation arising from the failure to abide by clearing procedures.
Close The period at the end of the trading session, officially designated by the exchange, during which all transactions are considered made "at the close."
Closing Price The price (or price range) recorded during trading that takes place in the final moments of a day's activity that is officially designated as the "close."
Closing Range A high and low range of prices at which futures transactions took place during the close of the market.
Co Respondent Other individuals or firms named in the disciplinary, reparation or arbitration action are referred to as co-respondents in the action.
Commission A fee charged by a broker to a customer for performance of a specific duty, such as the buying or selling of futures contracts.
Commission House See Futures Commission Merchant.
Commitments See Open Interest.
Commodity An article of commerce or a product that can be used for commerce. In a narrow sense, products traded on authorized commodity exchanges. The types of commodities include agricultural products, metals, petroleum, foreign currencies and financial instruments and indexes to name a few.
Commodity Credit Corporation A government-owned corporation established in 1933 to assist American agriculture. Major operations include price support programs, foreign sales and export credit programs for agricultural commodities.
Commodity Exchange Act The federal act that provides for federal regulation of futures trading.
Commodity Exchange Authority A regulatory agency of the U.S. Department of Agriculture established to administer the Commodity Exchange Act prior to 1975; the predecessor of the Commodity Futures Trading Commission.
Commodity Futures Trading Commission (CFTC) The 1974-established federal regulatory agency that administers the Commodity Exchange Act. The federal oversight agency which monitors the futures and options on futures markets to detect and prevent price distortion and market manipulation and to protect the rights of customers who use the markets for either commercial or investment purposes.
Commodity Option See Option Contract, Put Option and Call Option.
Commodity Pool An enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures or options contracts.
Commodity Pool Operator (CPO) An individual or organization which operates or solicits funds for a pool, that is, an enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures or options contracts. Generally required to be registered with the Commodity Futures Trading Commission.
Commodity Trading Advisor (CTA) An individual or organization that, for compensation or profit, directly or indirectly advises others as to the value of or the advisability of buying or selling futures or options contracts. Providing advice indirectly includes exercising trading authority over a customer's account. Registration with the Commodity Futures Trading Commission is generally required.
Compensatory Damages An amount intended to cover actual losses.
Complaint Formal, written charges brought by a regulatory or self-regulatory organization which set forth the rules or requirements alleged to have been violated and describe each act or omission that constituted the alleged violations. Also, the initial document filed in a court to initiate a civil action.
Computerized Trading Reconstruction System A Chicago Board of Trade computerized surveillance program that pinpoints in any trade, the traders, the contract, the quantity, the price and the time of execution to the nearest minute.
Confirmation Statement A statement sent by a futures commission merchant to a customer when a futures or options position has been initiated. The statement shows the number of contracts bought or sold and the prices at which the contracts were bought or sold. Sometimes combined with a purchase and sale statement.
Congestion (1) A market situation in which shorts attempting to cover their positions are unable to find an adequate supply of contracts provided by longs willing to liquidate or by new sellers willing to enter the market, except at sharply higher prices; (2) in technical analysis, a period of time characterized by repetitious and limited price fluctuations.
Consent Order Generally, any order to which all parties agree.
Contango A market situation in which prices in succeeding delivery months are progressively higher than in the nearest delivery months; opposite of Backwardation.
Contract A term of reference describing a unit of trading for a commodity future or option.
Contract Grades Those grades of a commodity which have been officially approved by an exchange as deliverable in settlement of a futures contract.
Contract Market A board of trade designated by the Commodity Futures Trading Commission to trade futures or option contracts on a particular commodity. Commonly used to mean any exchange on which futures are traded.
Contract Month The month in which delivery is to be made in accordance with a futures contract.
Contract Unit The actual amount of a commodity represented in a contract.
Contributor The Commodity Futures Trading Commission, National Futures Association and any U.S. futures exchange which includes its disciplinary actions in NFA's BASIC system.
Controlled Account Any account for which trading is directed by someone other than the owner. Also called a Managed Account or a Discretionary Account.
Convergence The tendency for prices of physical commodities and futures to approach one another, usually during the delivery month.
Conversion Factor A factor used to equate the price of T-bond and T-note futures contracts with the various cash T-bonds and T-notes eligible for delivery. This factor is based on the relationship of the cash-instrument coupon to the required eight percent deliverable grade of a futures contract as well as taking into account the cash instrument's maturity or call.
Corner (1) Securing such relative control of a commodity or security that its price can be manipulated; (2) in the extreme situation, obtaining contracts requiring the delivery of more commodities or securities than are available for delivery.
Cost of Carry See Carrying Charge.
Counterclaim A claim by a respondent against a claimant.
Cover (1) Purchasing futures to offset a short position. Same as Short Covering. See Offset or Liquidate; (2) to have in hand the physical commodity when a short futures or leverage sale is made, or to acquire the commodity that might be deliverable on a short sale.
Covered Option A short call or put option position which is covered by the sale or purchase of the underlying futures contract or physical commodity.
Creditor A person who is owed money by others.
Crop Year The time period from one harvest to the next, varying according to the commodity (i.e., July 1 to June 30 for wheat; September 1 to August 31 for soybeans).
Cross Claim A claim filed by one respondent against a co-respondent.
Cross Hedge Hedging a cash market position in a futures contract for a different, but price-related commodity.
Cross Margining A procedure for margining related securities, options and futures contracts jointly when different clearing houses clear each side of the position.
Cross Trading Offsetting or noncompetitive matching of the buy order of one customer against the sell order of another customer, a practice that is permissible only when executed in accordance with the Commodity Exchange Act, CFTC regulations and the rules of the contract market.
Crush Spread In the soybean futures market, the simultaneous purchase of soybean futures and the sale of soybean meal and soybean oil futures to establish a processing margin. See Gross Processing Margin.
Curb Trading Trading by telephone or other means that takes place after the official market has closed. Originally it took place in the street on the curb outside the market. Under CFTC rules, curb trading is illegal. Also known as Kerb Trading.
Current Assets Cash and other assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold during the next 12 months.
Current Delivery Month The futures contract which matures and becomes deliverable during the present month. Also called Spot Month.
Customer Margin Within the futures industry, financial guarantees required of both buyers and sellers of futures contracts and sellers of options contracts to ensure fulfilling of contract obligations. FCMs are responsible for overseeing customer margin accounts. Margins are determined on the basis of market risk and contract value. See also Clearing Margin.
Customer Segregated Accounts A special account used to hold and separate customers' assets from those of the brokerage house or firm.