Futures Definitions

Posted Price

An announced or advertised price indicating what a firm will pay for a commodity or the price at which the firm will sell it.

Counterparty Risk

The risk associated with the financial stability of the party entered into contract with. Forward contracts impose upon each party the risk that the counterparty will default, but futures contracts executed on a designated contract market are guaranteed against de

Position Limit

See Speculative Position Limit.

COT

See Commitments of Traders Report.

Position Accountability

A rule adopted by an exchange requiring persons holding a certain number of outstanding contracts to report the nature of the position, trading strategy, and hedging information of the position to the exchange, upon request of the exchange. See also: Speculative

Cost of Tender

Total of various charges incurred when a commodity is certified and delivered on a futures contract.

Portfolio Insurance

A trading strategy that uses stock index futures and/or stock index options to protect stock portfolios against market declines.

Corn-Hog Ratio

See Feed Ratio.

Pork Bellies

One of the major cuts of the hog carcass that, when cured, becomes bacon.

Core Principle

A provision of the Commodity Exchange Act with which a Contract Market, Derivatives Transaction Execution Facility, or