Buyer: Buyer is a market participant (trader/investor) who takes a long futures position or buys an option. An option buyer is also called a taker, holder, or owner.
Cash Commodity: Cash Commodity (also referred to as Actuals.) is the actual physical commodity as distinguished from the futures contract based on the physical commodity. Cash Commodity sometimes called spot commodity
CIF: CIF is the cost, insurance, and freight paid to a point of destination and included in the price quoted.
Contract: Contract is a term of reference describing a unit of trading for a commodity future or option. At the same time contract is an agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable.
Cover: Cover is the purchasing futures to offset a short position (same as Short Covering or Covering Short Position). In some situation Cover is referred to as having in hand the physical commodity when a short futures sale is made, or to acquire the commodity that might be deliverable on a short sale.
Delivery Instrument: Delivery Instrument is a document used to effect delivery on a futures contract, such as a warehouse receipt or shipping certificate.
Exchange: A central marketplace with established rules and regulations where buyers and sellers meet to trade futures and options contracts or securities. Exchanges include designated contract markets and derivatives transaction execution facilities.
Futures: Futures (also called Futures Contract) is a legally binding agreement to buy or sell a commodity or financial instrument at a later date. Futures contracts are normally standardized according to the quality, quantity, delivery time and location for each commodity, with price as the only variable.
Futures Contract: Futures Contract is an agreement to purchase or sell a commodity for delivery in the future: (1) at a price that is determined at initiation of the contract; (2) that obligates each party to the contract to fulfill the contract at the specified price; (3) that is used to assume or shift price risk; and (4) that may be satisfied by delivery or offset.
Ring: Ring is a circular area on the trading floor of an exchange where traders and brokers stand while executing futures trades. Some exchanges use pits rather than rings.
Shipping Certificate: Shipping Certificate is a negotiable instrument used by several futures exchanges as the futures delivery instrument for several commodities (e.g., soybean meal, plywood, and white wheat). The shipping certificate is issued by exchange-approved facilities and represents a commitment by the facility to deliver the commodity to the holder of the certificate under the terms specified therein. Unlike an issuer of a warehouse receipt, who has physical product in store, the issuer of a shipping certificate may honor its obligation from current production or through-put as well as from inventories.
Tender: Tender means giving a notice to the clearing organization of the intention to initiate delivery of the physical commodity in satisfaction of a short futures contract.
Warehouse Receipt: Warehouse Receipt is a document certifying possession of a commodity in a licensed warehouse that is recognized for delivery purposes by an exchange.
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Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.