[Soultrader]

Alphabetical Order F - O

Fading or Fades
When a local bid or offer disappears without trading at the price quoted. Example: "Locals 450 bid, XYZ Bank has offered 50 at 500, 450 bid FADES bid best."
Fair Value S&P 500 Term
The theoretical price of the S&P future should trade above the cash index.
Fast Cash S&P 500 Term
A cash index shown above the pit that indicates where the spot is headed.
Fillers S&P 500 Term
Same as Brokers.
Floor Broker General Floor Term
An exchange member who is paid a fee for executing orders for Clearing Members or their customers. A Floor Broker executing orders must be licensed by the CFTC.
Floor Trader General Floor Term
An exchange member who generally trades only for his/her own account or for an account controlled by him/her. Also referred to as a "local."
For S&P 500 Term
Same as bid, E.g. 20 for 20: they want to pay 20 for 20 S&P's.
Futures General Floor Term
A term used to designate all contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures exchange.
Futures Commission Merchant or FCM General Floor Term
A firm or person engaged in soliciting or accepting and handling orders for the purchase or sale of futures contracts, subject to the rules of a futures exchange and, who, in connection with solicitation or acceptance of orders, accepts any money or securities to margin any resulting trades or contracts. The FCM must be licensed by the CFTC.
Half
Price is at the half-dollar level: 975.50 or 1332.50, for example.
Handle General Floor Term
In the S&P 500, a handle is one dollar unit or 100 points. For example, if the market is trading at 988.00 (or "8 even") if the market moves up to the next handle the S&P's would be trading at 989.00 (or "89 even"). With the markets moving so quickly it is important to listen for the "handle" if not in front of a quote screen.
Hedge General Floor Term
The purchase or sale of a futures contract as a temporary substitute for a cash market transaction to be made at a later date. Usually it involves opposite positions in the cash market and futures market at the same time. (see Long Hedge, Short Hedge)
Hit S&P 500 Term
To sell, E.g. Solly sells to the buyer.
Holder General Floor Term
One who purchases an option.
Initial Performance Bond General Floor Term
The funds required when a futures position (or a short options-on-futures position) is opened. (Previously referred to as Initial Margin)
Lift S&P 500 Term
Buy on an uptick so that the offer is now higher than it was before.
Light
Same as "Small"
Limit Order General Floor Term
An order given to a broker by a customer that specifies a price; the order can be executed only if the market reaches or betters that price.
Limit Price General Floor Term
(see Maximum Price Fluctuation)
Liquidation General Floor Term
Any transaction that offsets or closes out a long or short futures position.
Local Only or Local Market S&P 500 Term
There are no brokers working any paper. Locals are on both sides of the market.
Locals S&P 500 Term
Traders trading for their own accounts: similar to market makers (Nasdaq) or Specialists (NYSE/AMEX). (see Floor Trader)
Long General Floor Term
The position of one who has bought a futures or options-on-futures contract to establish a market position through an offsetting sale; the opposite of short.
Long Hedge General Floor Term
The purchase of a futures contract in anticipation of an actual purchase in the cash market. Used by processors or exporters as protection against and advance in the cash price. (see Hedge, Short Hedge)
M.I.T. General Floor Term
Market-If-Touched. A price order that automatically becomes a market order if the price is reached.
Maintenance Performance Bond General Floor Term
(Previously referred to a Maintenance Margin) A sum, usually smaller than--but part of--the initial performance bond, which must be maintained on deposit in the customer's account at all times. If a customer's equity in any futures position drops to, or under, the maintenance performance bond level, a "performance bond call" is issued for the amount of money required to restore the customer's equity in the account to the initial margin level.
Margin General Floor Term
(see Performance Bond)
Market Order General Floor Term
An order for immediate execution given to a broker to buy or sell at the best obtainable price.
Mark-To-Market General Floor Term
The daily adjustment of margin accounts to reflect profits and losses.
Maximum Price Fluctuation General Floor Term
The maximum amount the contract price can change, up or down, during one trading session, as stipulated by Exchange rules.
Minimum Price Fluctuation General Floor Term
Smallest increment of price movement possible in trading a given contract, often referred to as a "tick."
Morgan S&P 500 Term
Morgan Stanley.
Nearby General Floor Term
The nearest active trading month of a futures or options-on-futures contract. Also referred to as "lead month."
Not Held
Means the executing broker(s) have been given an order (generally of size) to execute using their discretion. Filling Brokers have a keen sense of the market, participant relationships, and what the market will bear given the current liquidity which can change at any moment. Therefore, the trader upstairs "hands over the wheel" to allow the Filling Broker to provide his or her added value to the intended transaction.
Offer General Floor Term
Also called "ask." Indicates a willingness to sell a futures contract at a given price. The price they want to sell, E.g. 100 offered at 20: they want to sell 20's. (see Ask) The current price you would pay if you bought at the market.
Offered
This means offered for sale. 100 Offered at 50 means 100 contracts offered for sale at, say 1445.50. If you hear a big offer, this means wants to sell a big number of contracts above the market.
Offset General Floor Term
Selling if one has bought, or buying if one has sold, a futures or options-on-futures contract.