| Account Executive |
The agent of a commission house (FCM) who serves customers/traders by entering their commodity futures and options orders, reporting trade executions, advising on trading strategies, etc. |
| Actuals |
The physical (cash) commodity. |
| ADP |
Alternate Delivery Procedure. A futures contract provision which allows buyers and sellers to make and take delivery under terms or conditions which differ from those prescribed in the futures contract. An ADP can only occur following termination of futures trading in the spot month, after long and short futures positions have been matched for delivery. |
| Aggregation |
The principle under which all futures positions owned or controlled by one trader (or group of traders acting in concert or by any entity) are combined to determine reporting status and speculative position limit compliance. |
| Allowances |
The discounts (premiums) allowed for grades or locations of a commodity lower (higher) then the par (or basis) grade or location specified in the futures contract. |
| American Option |
An option contact that may be exercised at any time prior to expiration in contrast to a “European Option” which may only be exercised on the expiration date. NYMEX and IPE options are “American.” |
| API |
American Petroleum Institute. |
| API Gravity |
Gravity or liquid petroleum (crude and products) are measured by the API scale.
API Gravity =
141.5 (Specific gravity)
-131.5 At 60 degrees F. |
| Arbitrage |
The simultaneous purchase or cash commodities or futures contracts in one market against the sale or similar or like cash commodities or futures contracts in a different market with the intent of gaining a profit from price differentials between the two markets. |
| Assign |
To designate an option writer for fulfillment of his obligation to sell the underlying instrument (call option writer) or buy the underlying (out option writer) to the owner of the option. |
| Associated Gas |
Natural gas present in a crude oil reservoir, either separate from or dissolved (in solution with) the crude oil. |
| ASTM |
American Society for Testing Materials. Sets standards, quality specifications and standards for test procedures to determine the quality of chemicals and chemical compounds. |
| At the Market |
The highest bid or lowest offer present in the ring at any given time. An order to buy “at the market” is executed at the offer (take the offer); an offer to sell “at the market” is executed at the bid (hit the bid). The best price available in the ring (pit) at any given point in time. |
| At the Money |
An option (either a put or a call) whose strike price is the same as the current price for the underlying instrument. A $20 call or put is at the money when the underlying futures contract is trading at $20. |
