Commodities futures are contracts in which sellers promise to deliver a specified commodity by a future date at an agreed-upon price. These contracts are standardized and traded on commodity exchanges.
A financial instrument that derives its value from the performance of an underlying asset, commodity, currency, economic variable, or financial instrument. Derivatives can be used for hedging, speculation, or arbitrage purposes.
Financial futures are futures contracts based on a financial instrument. These contracts generally move inversely with interest rates.
A futures market is a financial exchange where futures contracts, which are agreements to buy or sell specific commodities or financial instruments at a predetermined future date and price, are traded.
A futures transaction refers to the buying and selling of futures contracts on commodities or financial instruments, which obligate the buyer to purchase or the seller to sell an asset at a predetermined future date and price.
Limit up and limit down are the maximum price movement thresholds allowed for a commodity futures contract during one trading day. These limits are set to prevent excessive volatility and ensure orderly markets.
LME stands for the London Metal Exchange, a key global marketplace for industrial metals trading, offering futures and options contracts for metals such as aluminum, copper, and zinc.
The London Metal Exchange (LME) is the world's largest non-ferrous metals exchange, trading in options and futures contracts in metals such as copper, aluminium, nickel, zinc, and lead, and is regulated by the UK Financial Conduct Authority.
Market risk is the potential financial loss arising from fluctuations in market prices. This can include risks from buying in a falling market or selling in a rising market. Hedging with futures contracts or options can mitigate, but not eliminate, these risks.
Portfolio insurance, also known as portfolio protection, involves using financial futures and options markets to safeguard a portfolio's value against market downturns.
Organized, national exchanges where securities, options, and commodities futures contracts are traded by members for their own accounts and for the accounts of customers.
A trading range is defined both in commodities and securities markets, encompassing the price limits within which a commodity or security is allowed to move during a trading day.
