Trading Industry Definitions

Price Movement Limit

See Limit (Up or Down).

Price Discovery

The process of determining the price level for a commodity based on supply and demand conditions in a free marketplace. Price discovery may occur in a futures market or cash market.

Power of Attorney

Power of Attorney or POA, is a written authorization permitting an indvidual to execute actions on behalf of another party, such as moving funds or placing trades in a brokerage account.

Position Trader

A commodity trader who either buys or sells contracts and holds them for an extended period of time, as distinguished from a day trader, who will normally initiate and offset a futures position within a single trading session.


An interest in the market, either long or short, in the form of one or more open contracts.

Portfolio Insurance

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


(1) Securing such relative control of a commodity that its price can be manipulated, that is, can be controlled by the creator of the corner; or (2) in the extreme situation, obtaining contracts requiring the delivery of more commodities than are availabl

Ponzi Scheme

Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture,


See: Power of Attorney

Confirmation Statement

A statement sent to a customer when a position has been initiated which typically shows the price and the number of contracts bought and sold. See P&S (Purchase and Sale).