Glossary

Large Order Execution Procedures

See Also:

Bid: Bid is an expression of willingness to buy a commodity at a given price. This is an offer to buy a specific quantity of a commodity at a stated price. Bid is opposite to Ask. Bid price is the price level at which a trader is ready to buy an offered commodity.

Counterparty: Counterparty is the opposite party in a bilateral agreement, contract, or transaction, such as a swap. In the retail foreign exchange (or Forex) context, the party to which a retail customer sends its funds; lawfully, the party must be one of those listed in the Commodity Exchange Act.

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.

Offer: Offer is an indication of willingness to sell futures contract at a given price. Offer is opposite of bid, the price level of the offer may be referred to as the ask.

Open: Open is the period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the open."

Pit: Pit (also referred to as a ring) is the area on the trading floor where trading in futures or options contracts is conducted by open outcry. It is a specially constructed area on the trading floor of some exchanges where trading in a futures contract or option is conducted. On other exchanges, the term ring designates the trading area for commodity contract.

Rules: Rules are the principles, standards and requirements for governing an exchange. In some exchanges, rules are adopted by a vote of the membership, while in others, they can be imposed by the governing board.

Trader: Trader is a merchant involved in cash commodities or a professional speculator who trades for his own account and who typically holds exchange trading privileges.

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