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Banking

Booking The Basis

A forward pricing sales arrangement which involves determining the cash price of a forward sales agreement (a futures contract) either...

Futures-Style Option

Not to be confused with a futures option, it is a futures contract on an option’s payoff. In fact, a...

Hard Commodity Futures

A commodity futures in which the underlying is a hard commodity such as gold (gold futures), silver (silver futures), copper...

Forward Backwardation

A situation of backwardation in which a specific period is “squeezed”, i.e., characterized by forced, not normal, trading. This usually...

Weather Futures

A weather derivative that is principally used to transfer risk associated with adverse weather events. It is an index-based futures...

Reverse Cash and Carry

A cash and carry transaction that is reversed. It involves the simultaneous sale of a cash market commodity/ instrument for...

Locked Limit Down

On the futures markets, it indicates that the highest current bid on a futures contract is below the maximum price...

Buying The Basis

Going long the basis, or more specifically the purchase of a cash-market investment instrument such as cash bonds or index...

Buying Hedge

A hedging transaction which involves buying futures contracts (long futures) to protect an investor against possible increases in the price...

CTFF

It stands for cash-to-first futures; a short cash rate that is observed from current day to the maturity date of...