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Tank Train
A procedure in the rail shipment of crude oil,
refined products, and other liquids developed by General
American Transportation (GATX). “Tank Train” tank cars
are interconnected, which permits loading and unloading
of the entire train of cars from one connection.
Technical
Analysis
An approach to forecasting commodity prices
which examines patterns of price change, rates of
change, and changes in trading volume and open interest,
without regard to underlying fundamental market
conditions.
Theoretical Value
An option's value generated by a mathematical
model given certain prior assumptions about the term of
the options contract, the characteristics of the underlying
futures contract, and prevailing interest rates.
Theta
The sensitivity of an option's value to a change in
the amount of time to expiration.
Throughput
1) A term used to describe the total volume of
raw materials that are processed by a plant such as an oil
refinery in a given period.
2) The total volume of crude
oil and refined products that are handled by a tank farm,
pipeline, or terminal loading facility.
Tick
A minimum change in price, up or down.
Time Spread
The selling of a nearby options contract and buying
of a more deferred options contract with the same
strike price.
Time
Value
Part of the options premium which reflects the
excess over the intrinsic value, or the entire premium if
there is no intrinsic value. At given price levels, the
option’s time value will decline until expiration. It is this
decrease in time value that makes options a wasting
asset.
Trade
House
A firm which deals in the physical commodity.
Trade
Limit Monitoring System
The system through which clearing members set
and monitor limits on their customers’ NYMEX ACCESS®
accounts, including maximum order size, maximum position
size per session, and session trading losses.
Trading
Buying and selling.
Trading Volume
The number of contracts that change hands during
a specified period of time.
Trend
The general direction of price movement.
Triangular
Flags
Chart patterns of the price movement of a commodity
when the market consolidates sideways. The
price patterns are used by technical analysts to try to
recognize changes in a price trend.
Type
Of Option
Either puts or calls.
Underlying
The stock, commodity, futures contract, or cash
index against which the futures or options contract is valued.
Variation
Margin
Payment made on a daily or intraday basis by a
clearing member to the clearinghouse to cover losses
created by adverse price movement in positions carried
by the clearing member, calculated separately for customer
and proprietary positions.
Vega
The sensitivity of an option’s value to a change in
volatility.
Viscosity
A method of measuring a given liquid’s resistance
to flow, usually decreasing with increasing temperatures.
Material with higher viscosity is more resistant to flow.
Volatile
Refers to liquids that change to gas at moderate,
room temperatures.
Volatile
Markets
Commodity markets with exceptional price movements
in both directions, generally driven by the economic
forces of supply and demand as well as world
events.
Volatility
The market’s price range and movement within
that range. The direction of the price move, whether up
or down, is not relevant. Historical volatility indicates how
much prices have changed in the past and is derived by
using daily settlement prices for futures. Implied volatility
measures how much the market thinks prices will change
in the future, and is obtained from daily settlement prices
for options.
Volume
Or Trading Volume
The total number of contracts traded in a designated
period of time.
West
Texas Intermediate
A global benchmark grade of crude oil deliverable
against the New York Mercantile Exchange light, sweet
crude oil contract
Wet
Barrel
A physical barrel of crude oil or refined product as
opposed to a "paper barrel."
Wet Gas
Natural gas containing condensable hydrocarbons.
Writer
The seller of an options contract.
Yield
1) A measure of the annual return on an investment
expressed as a percentage.
2) The proportion of
heavy or light products which can be derived from a
given barrel of crude oil.
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