Glossary: T-Z

– T –

Taker: The buyer of an option contract.

Tender: Delivery against futures.

Tick: Refers to minimum change in price level.

Trade balance: The net amount of goods exported and imported.

Treasury bills: Government debt obligations, they are sold at a price less than their value at maturity, the difference thereby being the yield.

Trend: The general direction of the market.

Trendline: In charting, a line drawn across the bottom or top of a price chart indicating the direction or trend of price movement.

– U –

Underlying Commodity: The futures contract or commodity on which a commodity option is based; and which must be approved or delivered if the option is exercised.

– V –

Variable Price Limit: A price limit schedule, determined by an exchange that allows variations changes of the permissible price movement for any one trading day.

Volatility: Volatility describes the range and frequency with which an instrument or asset’s price fluctuated over a given period. Generally, more volatile assets allow for higher profits per position, but also pave the way for quicker and more severe losses than their stable counterparts.

Volume of Trade: The number of contracts traded during a specified period of time.

– W –

Warehouse Receipt: A document confirming the possession of a commodity in a licensed warehouse that is recognized for delivery purposes by a commodity futures exchange.

Wash Trading: Entering into transactions to give the appearance that purchases and sales have been made, without ensuing in a change in the trader’s market position.

Writer: The granter, the issuer, or the maker of an option contract.

– Y –

Yield Curve: A graphic representation of market yield for a fixed income security plotted against the maturity of the security. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year.

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