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Glossary of Terms
As the commerce and industry have evolved, each sector has developed a vocabulary that uniquely describes its products, technology, and business practices, known as a jargon of respective domain. Often, these words seem incomprehensible to the layman. This short lexicon is not meant to be a comprehensive dictionary of markets; nevertheless it would be a useful guide for the beginners who are keen to no more about financial markets and futures industry.

  • Account Executive :-
    The agent of a broking firm or commission house who serves customers by entering their commodity futures and options orders, reporting trade executions, advising on trading strategies, general market information etc.
  • Ask :-
    A motion to sell. The same as offer.
  • Active Month :-
    In the metals markets, the nearest base contract month that is not the current delivery month. The base months for each metals future are defined by each individual contract.
  • Actual :-
    Physical cash commodities as opposed to futures contracts.
  • ADP :-
    Alternative Delivery Procedure. A provision of a futures contract that allows buyers and sellers to make and take delivery under terms or conditions that differ from those prescribed in the contract. An ADP may occur at any time during the delivery period, once long and short futures positions have been matched for the purpose of delivery.
  • AGA :-
    American Gas Association. Major natural gas industry trade association, based in Alexandria, Virginia. AGA conducts technical research and helps create standards for equipment and products involved in every facet of the natural gas industry. It also compiles statistics, which are considered industry standards.
  • All or None :-
    An order, which must be filled in its entirety or not at all.
  • American Option :-
    An option contract that may be exercised at any time prior to expiration. This differs from a "European option," which may only be exercised on the expiration date. The Exchange options contracts are "American."
  • API :-
    American Petroleum Institute. The primary U.S. oil industry trade association, based in Washington, D.C. API conducts research and sets technical standards for industry equipment and products from wellhead to retail outlet. It also compiles statistics, which are regarded as industry benchmarks.
  • Approved Carriers :-
    Armored carriers approved by the Exchange for the transportation of gold, platinum, and palladium.
  • Arbitrage :-
    The simultaneous purchase of one commodity against the sale of another in order to profit from fluctuations in the usual price relationships. Variations include the simultaneous purchase and sale of different delivery months of the same commodity; of the same delivery month, but different grades of the same commodity; and of different commodities.
  • Assay :-
    To test a metal or an oil for purity or quality.
  • Assignment :-
    The process by which the seller of an option is notified of a buyer's intention to exercise the rights associated with the option.
  • At-the-Market :-
    An order to buy or sell a futures contract at whatever price is obtainable when the order reaches the trading floor. Also called a market order.
  • At-the-Money :-
    An option whose exercise, or strike, price is closest to the futures price.
  • Automatic Exercise :-
    The clearinghouse exercises following options expiration, an option, which is in the money by $100 or more, automatically, unless the holder of the option submits specific instructions to the contrary.