Call Toll Free 800-669-8838 or 312-987-0043
GlossaryThe Striker Online Glossary is a list of terms and concepts used in
futures trading. This glossary continues to grow and we encourage
you to visit if there are new terms or concepts you are unfamiliar
with. In addition, you may contact one of our experienced brokers
at 800-920-5808 for questions on trading terms,
concepts or information.
Sell day. Exit longs by selling into strength. A dow open signals a sell on the first rally.
First Support Level
Used in the context of general equities. Order to buy (sell) a security which specifies the total amount to be bought (sold) and the amount to be bought (sold) at successively decreasing (increasing) price intervals; often done in order to average the price.
Sell Day – Exit longs by selling into strength. A down open signals a sell on the first rally
A special account used to hold and separate customer’s assets from those of the broker or firm.
To convey ownership of a security or other asset for money or value.
Sell Limit order
An order to a broker to sell a specified quantity of a security at or above a specified price (called the limit price).
Selling futures contracts to protect against possible decreased prices of the underlying cash market which will be sold in the future.
(1) The closing price, or a price within the range of closing prices, which is used as the official price in determining net gains or losses at the close of each trading session. (2) Payment of any amount of money under a contract.
One who has sold a cash commodity, a commodity futures contract or other financial instrument; a long, in contrast, is one who has bought a cash commodity or futures contract.
Trades that reverse, or close out, short-sale positions.
Selling futures to protect against possible decreasing prices of an underlying cash market. See also Hedging.
A situation in which a lack of supply and excess demand in a traded stock forces the price upward.
Single-Stock Futures (SSF)
SSF are an agreement between two parties that commits one party to buy a stock and one party to sell a stock at a given price and on a specified date. They are similar to existing futures contracts for gold, crude oil, bonds, and stock indices. Unlike actual stock, there is no ownership or voting rights contained in a SSF. (See also Universal Stock Futures)
The difference between estimated transaction costs and the amount actually paid.
One who attempts to anticipate price changes and make profits through the sale and/or purchase of financial instrument. A speculator with a forecast of advancing prices hopes to profit by buying futures contracts and then liquidating at a higher price. A speculator with a forecast of declining prices hopes to profit by selling then buying at a lower price in the future.
Price moves below PB and wide spread reversal occurs with (1) a close above the previous two closes, (2) the close is above PB, (3) the close is above the open and mid-range for the day and (4) the daily range is greater than prior day’s range.
Market for the immediate delivery of the product and immediate payment. May also refer to the nearest delivery month of a futures contract.
Spread (or Straddle)
(1) The purchase of one futures or forward delivery month against the sale of another futures or forward delivery month of the same commodity. The purchase of one delivery month of one futures or forward against the sale of the same delivery month of a different futures or forward. The purchase of one future or forward in one market against the sale of that future or forward in another market, to take advantage of and profit from the distortions from the normal price relationships that sometimes occur. (2) In a quotation, the difference between the bid and the ask prices of a market (3)The difference between two or more prices.
The simultaneous buying and selling of two related markets in the expectation that a profit will be made when the position is offset. Examples include: buying one futures contract and selling another futures contract of the same commodity but different delivery month; buying and selling the same delivery month of the same commodity on different futures exchanges; buying a given delivery month of one futures market and selling the same delivery month of a different, but related, futures market.
Short sale day. Watch for highs first with resistance at prior day’s high. If the price moves excessively above the previous day’s high, short trades should be scalps only that are covered on the first pullback. On a flat to down open, short the first rally up to the previous day’s high. The market should not make new highs in the afternoon.
An indicator used to measure and report value changes in a selected group of stocks. How a particular stock index tracks the market depends on its composition the sampling of stocks, the weighting of individual stocks, and the method of averaging used to establish an index.
Stock Index Futures
Futures contracts on a stock index, such as the Standard & Poor's 500 or the Dow Jones Industrial Average. Stock index futures contracts are a derivative of the underlying index, and are cash-settled.
Stop Close Only
A stop order that can be executed, if possible, only during the closing period of the market.
Stop Limit Order
An order to buy or sell a certain quantity of a certain security at a specified price or better, but only after a specified price has been reached. Essentially a combination of a stop order and a limit order.
A risk management technique used to close out a losing position at a given point. A stop loss order is placed at the given point.
An order that becomes a market order when a particular price level is reached. A sell stop is placed below the market, a buy stop is placed above the market. Sometimes referred to as a stop loss order.
A specified price at which an investor can buy or sell an option's underlying financial instrument. The exchange rate, interest rate, or market price that is guaranteed by an option transaction.
Abbreviation for Support Level
A price level at which a declining market has stopped falling. Once this level is reached, the market trades sideways for a period of time or rebounds. It is the opposite of a resistance price range.
Market risk due to price fluctuations which cannot be eliminated by diversification.
RISK DISCLOSURE STATEMENT -
The risk of loss in trading commodity futures contracts can be substantial. You should, therefore,
carefully consider whether such trading is suitable for you in light of your circumstances and financial
resources. You should be aware of the following points:
(1) You may sustain a total loss of the funds that you deposit with your broker to establish or
maintain a position in the commodity futures market, and you may incur losses beyond these amounts. If
the market moves against your position, you may be called upon by your broker to deposit a substantial
amount of additional margin funds, on short notice, in order to maintain your position. If you do not
provide the required funds within the time required by your broker, your position may be liquidated at a
loss, and you will be liable for any resulting deficit in your account.
(2) The funds you deposit with a futures commission merchant for trading futures positions are not
protected by insurance in the event of the bankruptcy or insolvency of the futures commission merchant,
or in the event your funds are misappropriated.
(3) The funds you deposit with a futures commission merchant for trading futures positions are not
protected by the Securities Investor Protection Corporation even if the futures commission merchant is
registered with the Securities and Exchange Commission as a broker or dealer.
(4) The funds you deposit with a futures commission merchant are generally not guaranteed or
insured by a derivatives clearing organization in the event of the bankruptcy or insolvency of the futures
commission merchant, or if the futures commission merchant is otherwise unable to refund your funds.
Certain derivatives clearing organizations, however, may have programs that provide limited insurance to
customers. You should inquire of your futures commission merchant whether your funds will be insured
by a derivatives clearing organization and you should understand the benefits and limitations of such
(5) The funds you deposit with a futures commission merchant are not held by the futures
commission merchant in a separate account for your individual benefit. Futures commission merchants
commingle the funds received from customers in one or more accounts and you may be exposed to
losses incurred by other customers if the futures commission merchant does not have sufficient capital to
cover such other customers' trading losses.
(6) The funds you deposit with a futures commission merchant may be invested by the futures
commission merchant in certain types of financial instruments that have been approved by the
Commission for the purpose of such investments. Permitted investments are listed in Commission
Regulation 1.25 and include: U.S. government securities; municipal securities; money market mutual
funds; and certain corporate notes and bonds. The futures commission merchant may retain the interest
and other earnings realized from its investment of customer funds. You should be familiar with the types
of financial instruments that a futures commission merchant may invest customer funds in.
(7) Futures commission merchants are permitted to deposit customer funds with affiliated entities,
such as affiliated banks, securities brokers or dealers, or foreign brokers. You should inquire as to
whether your futures commission merchant deposits funds with affiliates and assess whether such
deposits by the futures commission merchant with its affiliates increases the risks to your funds.
(8) You should consult your futures commission merchant concerning the nature of the protections
available to safeguard funds or property deposited for your account.
(9) Under certain market conditions, you may find it difficult or impossible to liquidate a position. This
can occur, for example, when the market reaches a daily price fluctuation limit ("limit move").
(10) All futures positions involve risk, and a "spread" position may not be less risky than an outright
(11) The high degree of leverage (gearing) that is often obtainable in futures trading because of the
small margin requirements can work against you as well as for you. Leverage (gearing) can lead to large
(12) In addition to the risks noted in the paragraphs enumerated above, you should be familiar with
the futures commission merchant you select to entrust your funds for trading futures positions. Beginning
July 12, 2014, the Commodity Futures Trading Commission will require each futures commission
merchant to make publicly available on its Web site firm specific disclosures and financial information to
assist you with your assessment and selection of a futures commission merchant.
ALL OF THE POINTS NOTED ABOVE APPLY TO ALL FUTURES TRADING WHETHER FOREIGN
OR DOMESTIC. IN ADDITION, IF YOU ARE CONTEMPLATING TRADING FOREIGN FUTURES OR
OPTIONS CONTRACTS, YOU SHOULD BE AWARE OF THE FOLLOWING ADDITIONAL RISKS:
(13) Foreign futures transactions involve executing and clearing trades on a foreign exchange. This
is the case even if the foreign exchange is formally "linked" to a domestic exchange, whereby a trade
executed on one exchange liquidates or establishes a position on the other exchange. No domestic
organization regulates the activities of a foreign exchange, including the execution, delivery, and clearing
of transactions on such an exchange, and no domestic regulator has the power to compel enforcement
of the rules of the foreign exchange or the laws of the foreign country. Moreover, such laws or regulations
will vary depending on the foreign country in which the transaction occurs. For these reasons, customers
who trade on foreign exchanges may not be afforded certain of the protections which apply to domestic
transactions, including the right to use domestic alternative dispute resolution procedures. In particular,
funds received from customers to margin foreign futures transactions may not be provided the same
protections as funds received to margin futures transactions on domestic exchanges. Before you trade,
you should familiarize yourself with the foreign rules which will apply to your particular transaction.
(14) Finally, you should be aware that the price of any foreign futures or option contract and,
therefore, the potential profit and loss resulting therefrom, may be affected by any fluctuation in the
foreign exchange rate between the time the order is placed and the foreign futures contract is liquidated
or the foreign option contract is liquidated or exercised.
THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER
ASPECTS OF THE COMMODITY MARKETS.