A |
B |
C |
D |
E-F |
G-J |
L | M-O |
P |
R |
S |
T-Z
Major
A term broadly applied to those multinational oil
companies which by virtue of size, age, or degree of integration
are among the preeminent companies in the international
petroleum industry.
Margin
The amount of money or collateral deposited by a
customer with his broker, or deposited by a broker with a
clearing member, or by a clearing member with the clearinghouse,
for the purpose of insuring the broker or clearinghouse
against adverse price movement on open
futures contracts. The margin is not partial payment on a
purchase.
1) Initial margin is the minimum deposit per
contract required when a futures position is opened. 2)
Maintenance margin is a sum which must be maintained on
deposit at all times. If the equity in a customers'
account drops to, or under, that level because of an
adverse price movement, the clearing member must
issue a margin call to restore the customers' equity.
Margins are set by the Exchange based on its analysis of
price risk volatility in the market at that time.
(See
Variation Margin; Refinery Margin.)
Margin
Call
A demand for additional margin funds when
futures prices move in an adverse direction to a trader's
position, or if margin requirements are increased. Buyers
of options are not subject to margin calls.
Marked-to-Market
Daily cash flow system used to maintain a minimum level of margin equity
for a given futures or options contract position by calculating
the gain or loss in each contract position resulting
from changes in the price of the futures or options contracts
each trading day.
Market
Connection
In technical analysis, a small reversal in prices following
a significant trending period.
Market-If-Touched
An order that becomes a market order when a
particular price is reached. A sell MIT is placed above the
market; a buy MIT is placed below the market.
Market
Maker
An independent trader or trading firm which is
prepared to buy and sell futures or options contracts in a
designated market. Market makers provide a two-sided
(bid and ask) market and greater liquidity.
Market-On-Close
An order to buy or sell at the end of the trading
session at a price within the closing range of prices.
Market
Order
An order to be filled immediately at the current
market price.
Maximum
Price Fluctuation
A commodity exchange’s established maximum
limits for movements in futures prices during any one
trading session.
Middle
Distillate
Hydrocarbons that are in the so-called "middle
boiling range" of refinery distillation. Examples are heating
oil, diesel fuels, and kerosene.
Minimum
Price Fluctuation
Minimum unit by which a futures price or an
options premium can fluctuate per trade, also known as
tick size.
Motor
Gasoline
A complex mixture of relatively volatile hydrocarbons,
with or without small quantities of additives, which
have been blended to form a fuel suitable for use in
spark-ignition engines.
Motor
Oil
Refined lubricating oil, usually containing additives,
used in internal combustion engines.
Naked
A long or short market position taken without having
an offsetting short or long position. For options, the
term "uncovered| is used interchangeably and refers to a
position that is taken without the benefit of an offsetting
position in the futures market.
A trader who executes one side of a spread is
said to be naked until he executes the other side.
Naptha
A volatile, colorless product of petroleum distillation.
Used primarily as a paint solvent, cleaning fluid, and
blendstock in gasoline production.
Napthenes
One of the three basic hydrocarbon classifications
found naturally in crude oil. Naphthenes are widely used
as petrochemical feedstocks.
National
Futures Association (NFA)
U.S. Futures industry trade association which
promulgates rules of conduct and mediates disputes
between customers and brokers.
Natural
Gas
A naturally occurring mixture of hydrocarbon and
non-hydrocarbon gases found in porous rock formations.
Its principal component is methane.
Natural
Gas Liquids (NGL)
A general term for all liquid products separated
from natural gas in a gas processing plant. NGLs include
propane, butane, ethane, and natural gasoline.
Netback
Industry term referring to the net free on board
cost of product offered on a delivered or cost, insurance,
and freight basis. It is derived by subtracting all costs of
shipment from the landed price.
Net
Position
The difference between an individual or firm’s
open long contracts and open short contracts in any one
commodity.
Neutral
Spread
Another name for a delta neutral spread. Spreads
may also be lot neutral, where the total number of long
contracts and the total number of short contracts of the
same type are approximately equal.
Nominal
Price
The declared price for a futures month sometimes
used in place of a closing price when no recent trading
has taken place in that particular delivery month; usually
an average of the bid and asked prices.
Notice
Day
The day on which an exchange clearinghouse
issues delivery allocation notices to clearing members.
See delivery.
Offer
A motion to sell a futures or options contract at a
specified price. Opposite of bid.
Offset
A transaction which liquidates or closes out an
open contract position. In spread positions, one side offsets
the other without liquidating the entire position. Risk
is reduced when one side offsets the other.
Omnibus
Account
An account carried by one futures commission
merchant with another in which the transactions of two or
more persons are combined rather than designated separately
and the identity of the individual accounts is not
disclosed.
One-Cancels-The-Other
Two orders submitted simultaneously, either of
which may be filled. If one order is filled, the other is considered
to be canceled.
OPEC
Organization of Petroleum Exporting Countries
Open
Interest or Commitment
The number of open or outstanding contracts for
which an individual or entity is obligated to the Exchange
because that individual or entity has not yet made an offsetting
sale or purchase, an actual contract delivery, or, in
the case of options, exercised the option.
Open
Order
A resting order that is good until canceled.
Open
Outcry
A method of two-way public auction through
which verbal bids, offers, and trades are made in the
trading rings of commodity exchanges.
Opening
Price
The price for a given commodity futures contract
that is generated by open trading during the opening
range of trading on a commodity exchange.
Opening
Range
The range of prices determined by trades executed
within the opening period for each trading
session.
Options
A contract which gives the holder the right, but
not the obligation, to purchase or to sell the underlying
futures contract at a specified price within a specified
period of time in exchange for a one-time premium payment.
The contract also obligates the writer, who
receives the premium, to meet these obligations.
Organization of Petroleum Exporting Countries
An organization made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela, whose principal aim is the coordination of the petroleum policies of the member countries
Original
Margin
The initial deposit of funds, as good faith monies,
when a position is initiated in order to guarantee fulfillment
of its obligations. Also known as initial margin.
Out-Of-The-Money
An option which has no intrinsic value. For calls,
an option whose exercise price is above the market price
of the underlying future. For puts, an option whose exercise
price is below the futures price.
Outage
A planned outage is the shutdown of a generating
unit, transmission line, or other facility for inspection and
maintenance, in accordance with an advance schedule.
A forced outage is the unplanned loss of service of a
generating unit, transmission line, or other facility for purposes
other than inspection and maintenance.
Overbought
A technical opinion that the market price has risen
too steeply and too fast in relation to underlying fundamental
factors.
Oversold
A technical opinion that the market price has
declined too steeply and too fast in relation to underlying
fundamental factors.
Over-The-Counter (OTC)
A term referring to derivative transactions that are
conducted outside the realm of regulated exchanges.
Transactions are conducted directly through banks or
brokerage houses, or by principal-to-principal in the
over-the-counter market.
Overwrite
The writing of more options than one expects to
have exercised. Call options are overwritten because the
writer considers the underlying overvalued. Put options
are overwritten because the underlying is considered
undervalued.
Privacy Policy