Trading Industry Definitions

Confirmation

1. Traders often look more than one signal to confirm their opinion on the price direction of a security. Confirmation refers to a subsequent signal that validates or reinforces the traders opinion on where the issue is heading. 2. The written statement provided by a broker stating that a trade has

Commodity Trading Advisor (CTA)

A person who, for pay, regularly engages in the business of advising others as to the value of commodity futures or options or the advisability of trading in commodity futures or options, or issues analyses or reports concerning commodity futures or options.

Performance Bond

See Margin.

Commodity Pool Operator (CPO)

A person engaged in a business similar to an investment trust or a syndicate and who solicits or accepts funds, securities, or property for the purpose of trading commodity futures contracts or commodity options. The CPO either itself makes trading decisions on be

Zombie

A zombie is an insolvent and bankrupt company that continues to operate while awaiting merger, aquisition or closure.

Commodity Pool

An investment trust, syndicate, or similar form of enterprise operated for the purpose of trading commodity futures or option contracts. Typically thought of as an enterprise engaged in the business of investing the collective or “pooled” funds of multiple participants in trading commodity futur

Zero-sum game

A situation in which one participant can gain only at the expense of another’s equivalent loss. See also: Game Theory

Zero Plus Tick

Transaction at the same price as the preceeding trade, greater than the most recent different transaction price. Also called zero uptick. For example, when trades are executed at 6, 7, and 7, the last trade at 7 is a zero-plus tick.

Zero Minus Tick

Transaction at the same price as the preceeding trade and less than the most recent different transaction price. Also called zero downtick. For example, when trades are executed at 7, 6, and 6, the last trade at 6 is a zero minus tick. See also: Zero Plus Tick

Payment for Order Flow

As a way to attract orders from brokers, some exchanges or market-makers will pay your broker’s firm for routing your order to them – perhaps a penny or more per share. This is called payment for order flow. Payment for order flow is one of the ways your b