Glossary: S

– S –

Sample Grade: Usually the lowest quality of a commodity, it is too low to be acceptable for delivery in satisfaction of futures contracts.

Scalp: Trading for small gains. Entering a position and liquidating it quickly (same day or even same hour sometimes).

Security Deposit Call: Demand for additional cash funds because of adverse price movement.

Settlement: The act of fulfilling the delivery requirements of the futures contract.

Settling price: The daily price at which the clearing house clears all trades and settles all accounts between clearing members of each contract month. Settlement prices are used to determine both margin calls and invoice prices for deliveries.

Sharpe Ratio: Named after William P Sharpe, the Sharpe Ratio is a measurement of trading performance calculated as the average return divided by the variance of those returns.

Short (Going Short): Contrasted with going long, going short is the strategy of selling instruments or assets, under the assumption that their value will fall over time. Going short takes a depressed view of the market, and is instigated as a strategy by traders when they perceive an asset as being overpriced.

Short Hedge: The sale of futures contracts to decrease the possible decline in value of a roughly the same amount of the actual commodity held.

Short Selling: Selling a contract with the intention of buying back in the nearest future.

Soft: A description of a price which is slowly deteriorating and it also refers to commodities such as sugar, or and coffee.

Speculator: In commodity futures, it is an individual who attempts to anticipate price changes and through market activities make profits.

Split Close: Refers to price differences in transactions at the close of any market session.

Spot: Market of immediate delivery of the product and immediate payment, it also refers to a maturing delivery month of a futures contract.

Squeeze: The situation of a market where the lack of supplies tends to force shorts to cover their positions by offset at higher prices.

Swap: In general, an interest rate swap is an accord between two parties to exchange interest payments on a fixed amount of debt. It also involves exchanging income flows; for example, exchanging the fixed rate coupon stream of a bond for a variable rate payment stream, or vice versa, while not swapping the principal component of the bond.

Switching: Liquidating an active position and at the same time reinstating that position in another contract month of the same commodity or currency.

Systemic Risk: Market risk due to price fluctuations which cannot be eliminated by diversification.

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