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Futures Trading Glossary
This glossary was compiled by the CME from a number of sources. The definitions are not intended to state or suggest the correct legal significance of any word or phrase. The sole purpose of this compilation is to foster a better understanding of the futures market.
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Acceptance criteria
A checklist that a system or component must satisfy in order to be accepted by a user, a customer, or other authorized entity.
Acceptance testing
Formal testing conducted to determine whether a system satisfies its acceptance criteria and to enable the customer to determine whether to accept the system.
Acting phase
The fourth phase in the IDEAL approach, when improvements are implemented.
Activity definition
Identifying the specific tasks that must be performed to produce the various project deliverables.
Activity sequencing
Identifying and documenting interactivity dependencies.
American-style options
Options that permit exercise at any time on or before the expiration date.
Analysis
Analysis includes causal and network.
AON (all or none)
Order type: At order entry, if it can execute in total, then it executes. Otherwise it stays in the order book until it can execute in total.
API
An application program interface (API) An API is the specific method prescribed by a computer operating system or by an application program by which a programmer writing an application program can make requests of the operating system or another application.
Application development
Translating business requirements into a technology solution fulfilling those business requirements.
Arbitrage
The simultaneous purchase and sale of identical or equivalent financial instruments or commodity futures in order to benefit from a discrepancy in their price relationship.
As-of trade
An unmatched trade from a previous day that is resubmitted to the clearing system; trade is submitted 'as of' the original trade date.
Ask
Also called "offer." Indicates a willingness to sell a futures contract at a given price.
ASP
An application service provider (ASP) is a company that offers individuals or enterprises access over the Internet to applications and related services that would otherwise have to be located in their own personal or enterprise computers.
Assembly test
Exercise to verify that the application components executing together fulfill the high-level design specifications. Assembly test contains a planning and an execution phase. Similar to string test, system test, or integration test.
Assignment
The designation of an option writer for fulfillment of his obligation to sell the underlying futures contract (call options writer) or buy the underlying futures contract (put option writer) upon notice from the Clearing House. Notice to the seller of an option that has been exercised by the buyer.
Associated person (AP)
A person, commonly called a commodity broker, associated with and soliciting customers and orders for a futures commission merchant or introducing broker. The AP must pass a Series 3 examination, be licensed by the CFTC and be a member of the NFA.
At-the-money
An option with a strike price equal to the underlying futures price.
ATM
Asynchronous Transfer Mode. This is the international standard for cell relay in which multiple service types (such as voice, video, or data) are conveyed in fixed-length (53-byte) cells. Fixed-length cells allow cell processing to occur in hardware, thereby reducing transit delays. ATM is designed to take advantage of high-speed transmission media.
ATS
Automatic Trading System.
Audit
An independent examination of a work product or set of work products to assess compliance with specifications, standards, contractual agreements, or other criteria.
Audit trail
Resolves the validity of an accounting entry by a step-by-step record by which accounting data can be traced to their source.
Autonomous system
Collection of networks under a common administration sharing a common routing strategy. Autonomous systems are subdivided by areas and must be assigned a unique 16-bit number by the IANA.
Average daily volume
Equals volume for a specified time period divided by the number of business days within that same time period.
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Back months
The futures or options on futures months being traded that are furthest from expiration. Also called deferred or distant months.
Backbone
Network used to interconnect several networks together.
Bar chart
A graph of prices, volume and open interest for a specified time period used by the chartist to forecast market trends. A daily bar chart plots each trading session's high, low and settlement prices.
Baseline
The original plan (for a project, a work package, or an activity), plus or minus approved changes. Usually used with a modifier (e.g., cost baseline, schedule baseline, performance measurement baseline).
Baseline management
In configuration management, the application of technical and administrative direction to designate the documents and changes to those documents that formally identify and establish baselines at specific times during the life cycle or a configuration item. Explaining or correcting and then managing changes to the baseline.
Basis
The difference between the spot or cash price and the futures price of the same or a related commodity. Basis is usually computed to the near future, and may represent different time periods, product forms, qualities and locations. The local cash market price minus the price of the nearby futures contract.
Basis contract
A forward contract in which the cash price is based on the basis relating to a specified futures contract.
Bear
One who believes prices will move lower.
Bear market
A market in which prices are declining.
Bear spread
A vertical spread involving the sale of the lower strike call and the purchase of the higher strike call, called a bear call spread. Also, a vertical spread involving the sale of the lower strike put and the purchase of the higher strike put, called a bear put spread.
Bearish key reversal
A bar chart formation that occurs in an uptrending market when the day's high is higher, low is lower and close is below the previous day's. May signal an upcoming downtrend.
Beta test
Pre-release testing of software involving end users.
Bid
The price that the market participants are willing to pay.
Bid (or buy)
An offer to buy a specific quantity of a commodity at a stated price. The price that the market participants are willing to pay.
Block Trade
A privately negotiated futures or option transaction executed apart from the public auction market. A block transaction may be executed either on or off the Exchange trading floor. These trades are governed by Rule 526 BLOCK TRANSACTIONS.
Blowoff volume
An extraordinarily high volume trading session occurring suddenly in an uptrend, signaling the end of the trend.
Board
The Board of Directors of the Exchange or any other body acting in lieu of and with the authority of the Board.
Bond
Instrument traded on the cash market — representing a debt of the government or of a company.
BPDU
Bridge Protocol Data Units, sent by root switches to calculate spanning trees and active topologies. A spanning-tree protocol hello packet that is sent out at configurable intervals to exchange information among bridges in the network.
Breakaway gap
A gap in prices that signals the end of a price pattern and the beginning of an important market move
Breakeven
The point at which an option buyer or seller experiences no loss and no profit on an option. Call breakeven equals the strike price plus the premium. Put breakeven equals the strike price minus the premium.
Broad Based Index Future
Refers to a futures contract based upon an Index that is not considered narrow-based as defined in Section 1a(25) of the CEA. Also referred to as a Non-Narrow Based Index Future.
Broker
A person paid a fee or commission for executing buy or sell orders for a customer. In futures trading, the term may refer to one of several entities: 1) floor broker - a person who actually executes the trade in the trading pit/GLOBEX; 2) Account executive (AE), Associated Person (AP), Registered Commodity representative (RCR) - the person who deals with customers in futures commission merchant (FCM) offices; and 3) the FCM. A firm or person engaged in executing orders to buy or sell futures contracts for customers. A fullservice broker offers market information and advice to assist the customer in trading. A discount broker simply executes orders for customers.
Brokerage
The fee charged by a broker for execution of a transaction. May be a flat amount or a percentage; may be referred to as a commission.
Brokerage house
A firm that handles orders to buy and sell futures and options contracts for customers.
Budget variance
The event which the project manager reports that, to date, the project has spent money differently than the baselined financial budget allowed. If a project has spent more money to date than expected, it is running a positive budget variance. If a project has spent less money to date than expected, it is running a negative budget variance.
Bug
See "defect."
Bull
One who expects prices to rise.
Bull market
A market in which prices are rising.
Bull spread
A vertical spread involving the purchase of the lower strike call and the sale of the higher strike call, called a bull call spread. Also, a vertical spread involving the purchase of the lower strike put and the sale of the higher strike put, called a bull put spread.
Bulletin Board
A bulletin board maintained on or adjacent to the trading floor.
Bullish key reversal
A bar chart formation that occurs in a downtrending market when the day's high is higher, low is lower and close is above the previous day's. Can signal an upcoming uptrend.
Bundle
The simultaneous sale or purchase of one each of a series of consecutive futures contracts. Bundles provide a readily available, widely accepted method for executing multiple futures contracts with a single transaction.
Business architect
Representative of the user community who serves as a liaison to the technology organization. They need to understand the evolution and goals of the business organization and articulate the business needs to the technology organization in the business requirements deliverable. Also called user liaison.
Business capability test/benefits realization test
Exercise to verify that the new business processes and technology solutions fulfill the expectations of the business case. Business capability tests contain a planning and an execution phase.
Business case
Project stakeholders' and management's agreement of the purpose and expectations of the project. Benefits defined should encompass financial, strategic, process, operations, and technology benefits. Similar to cost/benefit analysis.
Business integration
The process of ensuring that all aspects of a project (processes, operations, technology, etc. ) fully integrate with existing processes, operations, technology to enhance competitive advantage and to progress the corporate strategy.
Business process definition
User community's documentation of the steps each role follows to support their function. The business process definition defines skill needs, process steps, and inputs and outputs of each process step.
Business requirements
Translation of the business case into tangible, verifiable statements describing the technology solution's functionality and characteristics.
Business-to-Business (B2B)
An Internet strategy of dealing directly with businesses, rather than consumers.
Bussiness Day/Trading Day
Any day on which the Exchange is open for trading or deliveries.
Butterfly spreads
Can be futures or options spreads. As an option spread, it is a strategy combining a bull and bear spread and uses three strike prices. The lower two strike prices are used in the bull spread and the higher strike price from the bear spread. Both puts and calls can be used.
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
By-Laws
The By-Laws of Chicago Mercantile Exchange Inc. unless otherwise specified.
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Cabinet price
Nominal price for liquidating deep-out-of-the-money options contracts. It is defined as the lowest possible tradable price for this option, and is determined within the Clearing System. Trades on options done at a price equal to zero are considered cabinet trades.
Cabinet trade or cab
A trade allowing options traders to liquidate deep out-of-the-money options by trading the option at a price equal to one-half tick.
Calendar spreads
A futures calendar spread, or futures intra-delivery spread, is the simultaneous purchase and sale of the same futures contract, but different contract months – for example, buying a September S&P 500® futures contract and selling a December S&P 500 futures contract. An options calendar spread is the simultaneous purchase and sale of options of the same strike, but different expiration dates.
Call
An option to buy a commodity, security or futures contract at a specified price any time between now and the expiration date of the option contract.
Call breakeven
See "breakeven."
Call option
An option contract which gives the buyer the right, but not the obligation, to purchase a specific futures contract at a fixed price (strike price) within a specified period of time as designated by the Exchange in its contract specifications. The buyer has the right to buy the commodity (underlying futures contract) or enter a long position. A call writer (seller) has the obligation to sell the commodity (or enter a short position) at a fixed price (strike price) during a certain fixed time when assigned to do so by the Clearing House.
Call profit/loss
For a long call, equal to the call value minus the premium. For a short call, equal to the premium minus the call value.
Call value
At expiration, equal to the futures price minus the strike price of the call.
Car
A loosely used term to describe contract quantities.
Carryover
Last year's ending stocks of a storable commodity.
Cash commodity
The actual physical commodity as distinguished from a futures contract.
Cash price
Current market price of the actual physical commodity. Also called "spot price."
Cash sales
The sale of commodities in local cash markets such as elevators, terminals, packing houses and auction markets
Cash settlement
Final disposition of open positions on the last trading day of a contract month. Occurs in markets where there is no actual delivery.
Causal analysis
The analysis of defects to determine their underlying root cause.
CCTV
Closed Circuit Television devices in office towers displaying latest pricing information.
Certificate of Incorporation
The Certificate of Incorporation of Chicago Mercantile Exchange Inc. unless otherwise specified.
CFTC
Acronym for the Commodity Futures Trading Commission as created by the Commodity Futures Trading Commission Act of 1974. This government agency currently regulates the nation's commodity futures industry.
Chairman
The Chairman of the Board of Directors, or one acting in lieu of and with the authority of the Chairman of the Board.
Change control
See "project change control."
Change Management
The process of documenting, communicating impact, and approving changes to systems.
Charting
The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average movements of price, and volume and open interest.
Chartist
One who engages in technical analysis.
Chicago Mercantitle Exchange Holding INC.
A holding company of which CHICAGO MERCANTILE EXCHANGE INC. is a wholly owned subsidiary.
CIP
Channel Interface Processor. Channel attachment interface for Cisco 7000 series routers. The CIP is used to connect a host mainframe to a control unit, eliminating the need for a FEP for channel attachment. Cisco proprietary.
Citrix
Remote access thin client solution.
Class A Share
A share of Class A Common Stock of Chicago Mercantile Exchange Holdings Inc. Class A Shares shall confer no trading rights.
Class B clearing member
A non-bank member firm whose privileges and rights are limited to conducting proprietary arbitrage in foreign currencies with a single Exchange-approved bank (See "clearing member" for details).
Class B Common Stock
The Class B Common Stock of the Exchange in the various series that have been issued.
Class B Share
A share of Class B Common Stock of Chicago Mercantile Exchange Holdings Inc. A Class B Share may be transferred only in accordance with the Rules.
Class B Stockholder
The registered owner of one or more Class B Shares.
Class code or transition class
Equivalent to 'group/instruments' which groups an instrument's futures and options separately (calls and puts are not separate). (e.g., Eurodollar futures (GE) and Eurodollar options (ZE); or British Pound Futures (BP) and British Pound Options (OP).
Clearing
The procedure through which the Clearing House becomes buyer to each seller of a futures contract, and seller to each buyer, and assumes responsibility for protecting buyers and sellers from financial loss by assuring performance on each contract. This is effected through the clearing process, whereby transactions are matched.
Clearing 21®
CME application used by member firms to clear trades end of business day.
Clearing fee
A fee charged by the Exchange for each futures or options contract cleared or delivered on the Exchange. Fees may be waived or reduced for some commodities as specified by the Board of Directors from time to time. Please call the Clearing House for a current listing of clearing fee rates. See fee for GLOBEX entry definitions.
Clearing Fee Indicator
A designation on a trade record which indicates the rate to be paid for clearing services: E = Equity Members, Clearing Members*; L = Lessee/106.F.Employees; B = CBOE Member (trading S&P products only); H = 106.H./J. Firms; C = Non-member (customer); M = Member rate for futures side of BK broker combination trades.
* A 106.F member, who is an owner of a clearing member firm and whose seat is assigned for clearing privileges, is entitled to equity rates and therefore should use the E fee code. If fee is left blank, your rate will be determined based on user affiliation and the CTI code.
Clearing House
The division of the Exchange through which all trades made must be confirmed, matched and settled each day until offset or delivered. An adjunct to the CME responsible for settling trading accounts, clearing trades, collecting and maintaining performance bond funds, regulating delivery and reporting trading data.
Clearing ID
The alpha-numeric firm id under which the firm’s trades will clear.
Clearing keys
Combination of account number, origin, CTI, clearing fee, foreign exchange/firm and memo fields, when defined, automatically populates the order entry box fields in the GLOBEX system.
Clearing member
A firm qualified to clear trades through the Clearing House. All clearing members not specifically designated as Class B members are considered Class A clearing members. There are three categories of clearing members: 1) CME clearing members, qualified to clear transactions for all commodities; 2) IMM clearing members, qualified to clear trades for only IMM and IOM commodities; and 3) IMM Class B clearing members, solely limited to conducting proprietary arbitrage in foreign currencies between a single Exchange-approved bank and the IMM and who must be guaranteed by one or more Class A non-bank CME or IMM clearing member(s).
Clearing non-trade transaction
Clearing non-trade transactions are composed of transfers, exchange-for-physicals (EFPs), blocks and give-ups. Transfers, blocks and EFPs are privately negotiated, ex-pit transactions, while give-ups relate to post-trade processing. "Cancels" and "replaces" do not generate clearing non-trade transactions.
Clearing trade transaction
Each matched trade between a buyer and a seller generates two clearing trade transactions: one for the buyer and one for the seller.
Clerk
A member's bona fide employee who has been registered by the Exchange to work on the trading floor.
Client logs
History logs / audit trails from an application that resides on a user's computer (client).
Close
The period at the end of the trading session. Sometimes used to refer to the closing range.
Close, the
The period at the end of the trading session officially designated by the Exchange during which all transactions are considered "made at the close."
Closing Bell
Any signal which indicates the conclusion of normal daily trading hours in any commodity.
Closing price
The last price of a contract at the end of a trading session.
Closing range
The high and low prices or bids and offers recorded during the period designated by the Exchange as the official close (the final 60 seconds of trading in currencies and 30 seconds in all other contracts).
CME Division
The Chicago Mercantile Exchange Division of the Exchange. Holders of the membership interest associated with Chicago Mercantile Exchange Holdings Inc. Class B-1 Stock, who have been elected to membership shall be members of the CME Division (“CME members”).
Code reviews
An assessment of the application logic and scripts to verify that code meets standards of modularity, comments, variable usage, and process branching. A code review is the most important part of the exit criteria of the code phase. An inspection is performed to approve or critique that an application's logic meets formal expectations concerning naming conventions, routine/object modularity, variable usage, operand usage, and processing efficiency.
Combination Order
A combination of buy and/or sell orders for the same account, except as provided by Rule 551, at the market or at a fixed differential or by some other appropriate pricing convention.
Commission
For futures contracts, the one-time fee charged by a broker to cover the trades you make to open and close each position. It is payable when you exit the position. Also called a round-turn. Commissions on options are usually half on initiation and paid half on liquidation.
Commitment
When a trader or institution assumes the obligation to accept or make delivery on a futures contract.
Commodity
Any commodity approved and designated by the Board for trading in the Exchange hall under the rules of the Exchange.
Commodity exchange
An incorporated, not-for-profit association of members that formulates rules and procedures for the trading of futures and options on futures contracts, provides the physical facilities for trading and oversees trading practices.
Communications management
See "project communications management."
Component test
Exercise to verify that the new application logic component fulfills the detailed design specifications. Component tests contain a planning and an execution phase. Similar to unit test.
Configuration management
A discipline applying technical and administrative direction and surveillance to identify and document the functional and physical characteristics of a configuration item, control changes to those characteristics, record and report change processing and implementation status, and verify compliance with specified requirements.
Consultant
An individual, partnership, corporation, or association that contractually sells companies their services for the completion of certain phases of a project or entire projects.
Contingency planning
The development of a management plan that identifies alternative strategies to be used to ensure project success if specified risk events occur.
Contract
An agreement to buy or sell a specified amount of a particular commodity as specified by the Exchange (i.e., GEZ9, SPZ0C7400). The contract specifications detail the amount and grade of the product and the date on which the contract will mature and become deliverable if it is not liquidated earlier. Also, a term of reference describing a unit of trade for a commodity futures, as in "five Eurodollar contracts." Unit of trading for a financial or commodity future. Also, actual bilateral agreement between the parties (buyer and seller) of a futures or options on futures transaction as defined by an exchange.
Contract administration
Managing the relationship with the service provider.
Contract close-out
Completion and settlement of the contract, including resolution of all outstanding items.
Contract month
Typically identifies the month and year in which a futures contract expires. Also called the delivery month.
Controlled account
Any account for which trading is directed by someone other than the owner.
Corporation
An entity created by or under the authority of the laws of a state or foreign corporation statute or limited liability company ("LLC") statute. References in the Rules of the Exchange to shareholders shall also be deemed to refer, in the case of an LLC, to LLC members; references to equity securities shall also be deemed to refer, in the case of an LLC, to LLC membership interests; and references to officers or directors shall also be deemed to refer, in the case of an LLC, to LLC managers.
Cost
Cost risk is the risk associated with project cost growth, or increased cost of one project requiring a reduction in the cost of another project.
Credit class
The instrument group separating futures from calls from puts (different from transition classes) used by CME for credit controls (i.e. Eurodollar futures, Eurodollar calls, and Eurodollar puts are separate credit classes).
Credit spread
An option spread in which there is a net collection of premium.
Critical path
In a project network diagram, the series of activities which determines the earliest completion of the project. The critical path will generally change from time to time as activities are complete ahead of or behind schedule. Although normally calculated for an entire project, the critical path also can be determined for a milestone or subproject.
CTE
Central Trading Engine or host.
CTI
Customer Type Indicator (as it pertains to electronic trading systems): A clearing indicator, required at the time of order entry, which indicates for whom the order is being entered: CTI 1 = Applies to orders entered by a workstation user for his/her own account or an account in which he/she has financial interest. CTI 2 = Applies to orders entered for the proprietary account of the clearing firm. CTI 3 = Applies to orders entered by a member, an ETH permit holder, or by an employee of a member or ETH permit holder, for the account of another member or ETH permit holder (Rule 574.B.) CTI 4 = Applies to all other orders that do not fit the above three categories.
CUBS
CME specific application for electronic trading.
Cultural
Cultural risk is risk arising from long-standing embedded process and procedures, or from experienced based bias.
Current delivery month
The delivery month that typically identifies the futures contracts that expire within that month.
Customer
The individual or organization responsible for accepting the product and authorizing payment to the developing organization.
CWSI
CiscoWorks for Switched Internetworks.
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Daily trading limits
The maximum price range permitted a contract during one trading session. Trading limits are set by the Exchange for certain contracts.
Day order
An order which is good for that day's trading session only. If unexecuted at the close of the market, the order is eliminated. Order is good from ETH through RTH.
Day trader
A trader who establishes and liquidates positions within one day's trading, ending the day with no establishedmarket positions.
Day trading
Refers to establishing and liquidating the same position or positions within one day's trading, thus ending the day with no established market position.
Debit spread
An option spread in which there is a net payout of premium.
Defect
A flaw in a system or system component that causes the system or component to fail to perform its required function. A defect, if encountered during execution, may cause a failure of the system or system component (a.k.a. bug).
Defect management (defect prevention)
A process that incorporates defect prevention (see definition) with effective, closed-loop reporting and resolving of defects. Error reports and issue logs are a part of this process.
Deferred
See "back months."
Deferred pricing agreement
A cash sale in which you deliver the commodity and agree with the buyer to price it at a later time.
Deliverable
Any measurable, tangible, verifiable outcome, result, or item that must be produced to complete a project or part of a project. Often used more narrowly in reference to an external deliverable, which is a deliverable that is subject to approval by the project sponsor or customer.
Deliverable management
Managing the measurable, tangible, verifiable outcomes, results or items that must be produced to complete a project or part of a project.
Delivery
The transfer of a commodity from a seller of a futures contract to a buyer of a futures contract. Some futures contracts are also cash settled.
Delivery month
See "contract month."
Delta
The measure of the price-change relationship between an option and the underlying futures price. Equal to the change in premium divided by the change in futures price.
Demand
The quantity of a commodity that buyers are willing to purchase from the market at a given price.
Dependency (logical relationship)
A dependency between two project activities, or between a project activity and a milestone. The four possible types of logical relationships are finish-to-start, finish-to-finish, start-to-start and start-to-finish.
Deployment management
Managing the conversion of the existing organization, systems and processes to the new business process, organization and systems utilizing a deployment plan.
Deployment plan
The plan tracks activities leading up to and continuing after the live date of the new system. Similar to conversion plan.
Design review
A walk-through of modular system specifications to verify that the design meets standards of performance, failover, modularity, reliability, scalability, usability, maintainability. Design reviews can be logical or physical.
Design specifications
Translation of the project's requirements into a technical architecture (hardware) and modular specifications for application logic (software) which enable the coding phase to begin.
Designer
The individual who converts business requirements to human interface specifications, system interface specifications, database access specifications, and modular application logic, ready for the coding phase (Oftentimes, this role and the role of the developer are performed by one individual).
Developer
Generic term for the role of converting system requirements to a production-ready system through the system design, coding, and test planning and test execution tasks. Similar to programmer, but a programmer refers to strictly the coding task.
Deviation
A noticeable or marked departure from the appropriate norm, plan, standard, procedure, or variable being reviewed. Similar to variance.
DHCP
Dynamic Host Configuration Protocol. Provides a mechanism for allocating IP addresses dynamically so that addresses can be reused when hosts no longer need them.
Diagnosing phase
The second phase in the IDEAL approach, when appraisals are conducted to establish the software process maturity baseline of the organization and a set of recommendations for improvement are communicated to the organization.
Discount broker
See "broker."
Distant
See "back months."
DNS
Domain Name Server. System used in the Internet for translating names of network nodes into addresses.
Double top, bottom
A bar chart formation that signals a possible trend reversal. In a point and figure chart, double tops and bottoms are used for buy and sell signals.
Downtrend
A price trend characterized by a series of lower highs and lower lows.
DRT
See "with discretion."
Duration estimate
The task is estimated to require a finite number of workdays to complete, with less importance given to actual effort.
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Earned value
A method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned.
Effort estimate
An assessment of the number of labor units required to complete an activity or other project element. Usually expressed in staff hours, staff days, or staff weeks. The task is estimated to require a finite number of work hours to complete, with less importance given to duration.
EIGRP
Enhanced Interior Gateway Routing Protocol. Advanced version of IGRP developed by Cisco. Provides superior convergence properties and operating efficiency, and combines the advantages of link state protocols with those of distance vector protocols. Cisco proprietary.
Electronic Device
Any electronic device including, without limitation, any computer, headset, pager, microphone, telephone, two-way radio or other type of voice or data communications interface, whether or not such electronic devices require an external source of electrical power for proper operation.
Electronic Information
The data made available to each member or clearing member by virtue of such member’s or clearing member’s access to any Regulated Electronic Device, including, without limitation, (i) the identity of other persons transacting business on, with or through the Exchange or an Exchange Affiliate, and the price and quantity of pending or filled orders and interests on, with or through the Exchange or an Exchange Affiliate by, on behalf of or at the direction of such persons, and (ii) with respect to any Regulated Electronic Device supplied by the Exchange to such member or clearing member, any database, software, programs, protocols, displays and manuals relating thereto, including the selection, arrangement, and sequencing of the contents thereof.
Electronic trading
Trading via computer through an automated, order entry and matching system. GLOBEX is an example of an international electronic trading system.
Elliot wave theory
A type of technical analysis that studies price wave sequences.
End user (User)
The individual or group who will use the system for its intended operational purpose when it is deployed in its environment.
Ending stocks
The amount of a storable commodity remaining at the end of a year.
Entry & exit criteria
List of conditions which must be true or list of deliverables which must be completed or approved before declaring the start of a project phase or the completion of a project phase. Adherence to the criteria promotes phase containment, the expectation that a software defect is an order of magnitude more expensive to correct for every phase it propagates to subsequent project stages.
Equity
Instrument traded on the cash market—representing a share in the capital of a company. The net worth of a commodity account as determined by combining the ledger balance with a n unrealized gain or loss in open positions as marked to the market.
Error
Defined as (1) The difference between a computed, observed, or measured value or condition and the true, specified, or theoretically correct value or condition. (2) An incorrect step, process, or data definition. For example, an incorrect instruction in a computer program. (3) An incorrect result. (4) A human action that produces an incorrect result.
Error report
An item recorded during the design or execution phases of a project (e.g. Application development stage in software projects) where the person believes an error has been identified that warrants research and a change to system components, documentation, or processes. Error reports are typically referred to as "bug reports" or "defect reports" and can also be elevated to issue logs (see definition).
Establishing Phase
The third phase in the IDEAL approach, when a software process improvement infrastructure is built, including the formation of process action teams and the definition of software process improvement and strategic and tactical plans.
Estimating guidelines
Default work hour and budgetary estimates for tasks common to project work plans. Also encompasses use of historical information from prior projects.
Estimation
The planner's judgment of the magnitude of a task. The three most commonly used methods are unit, effort and duration.
European-style options
Options that may be exercised only on the option's expiration date.
Ex Pit Transaction
The term "Ex Pit" refers to any transaction done non-competitively. The only permissible ex-pit transactions are EFPs EBFs defined block trades and transfers. Block trades must be executed in accordance with Rule 526. EFP and EBF transactions must be executed in accordance with either Rule 538 or Rule 719. Transfers may only be made in accordance with Rule 853.
Exchange
Chicago Mercantile Exchange Inc., including its divisions.
Exchange Affiliate
A corporation in which the Exchange holds more than a 50% equity interest, a partnership in which the Exchange is a general partner, or a limited liability company or limited liability partnership in which the Exchange is a controlling member or controlling partner.
Exchange Basis Facility (EBF) Trade
An Exchange-for-Physical (EFP) trade transacted in the context of interest rate contracts (see definition of Exchange-for-Physical).
Exchange Official
An employee or member designated by the Exchange to perform or execute certain acts.
Exchange-For-Physical (EFP) Trade
An EFP refers to a privately negotiated and simultaneous exchange of a futures position for a corresponding cash position (i.e., a basis trade) apart from the public auction market in the context of a non-interest rate contract. An EFP may be executed on or off the Exchange trading floor. These trades are also referred to as "Transfers of cash for futures". "Cash for Futures", or "vs. cash" transactions These trades are governed by Rule 538, TRANSFER OF SPOT FOR FUTURES or Rule 719, TRANSFER OF CASH FOR FUTURES AFTER TERMINATION OF CONTRACT.
Execution team
Resources who follow test plan scripts, record test results and report system defects and discrepancies with the test plan.
Exercise
The process of an option holder exchanging it for the underlying futures contract.
Exercise notice
A notice tendered by a brokerage firm to CME's Clearing House that exchanges an option for a futures contract.
Exercise or strike price
The price at which the buyer of a call can purchase the commodity during the life of the option, and the price at which the buyer of a put can sell the commodity during the life of the option.
Exercise price
The price at which the holder (buyer) may purchase or sell the underlying futures contract. Also called strike price.
Exhaustion gap
A gap in prices near the top or bottom of a price move that signals an abrupt turn in the market.
Expiration
Corresponds to the expiration date of a contract. The last day on which an option may be exercised into the underlying futures contract.
Expiration date
The last day that an option may be exercised. Also, the last day of trading for a futures contract.
Expire
Letting the expiration date for an option pass without exercising or offsetting the option.
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Facilitation Order
An order from the proprietary account of the Principal Market-Maker (PMM) or other members executed in whole or part in a cross transaction with a customer's (non-member's) order.
Fast market
Term used to define unusually hectic market conditions.
FCMs
Futures Commission Merchant. Individuals, associations, partnerships, corporations and trusts that solicit or accept orders for the execution of a commodity transaction on and pursuant to the rules of a contract market and which accept payment from or extend credit to customers. Also, see "clearing member."
FI
Frontal Interface.
Fill - and - Kill (FAK)
An order that is executed to the extent possible, the remainder (if any) is cancelled.
Fill-or-kill order (FOK)
A limit order that must be filled immediately or canceled.
FIN
Futures Industry Frame Relay Network. Used by Member firms for Clearing 21® and link to definition access to CME.
Finish-to-finish dependency
The "from" activity must finish before the "to" activity can finish.
Finish-to-start dependency
The "from" activity must finish before the "to" activity can start.
Firewall
A mechanism that isolates a network from the rest of the Internet, permitting only specific traffic to pass in and out.
Firm
At CME, it is called a clearing member firm. A company that has membership privileges and clearing status with Chicago Mercantile Exchange. See "clearing member."
FirmSoft
A user-friendly search tool to provide firms easy access to research and cancel their orders.
FIX API
The CME FIX API was designed to allow firms and Independent Software Vendors (ISVs) to easily integrate their order entry and routing systems with CME. It is a software library of functions that enables a member’s order management system to communicate with exchange order routing systems. Member firms can run the CME FIX API on their computers to electronically send orders to and receive fills from GLOBEX® or the firm's exchange floor operations by way of the firm's internal order management system.
FIX API 2.3
CME developed FIX API 2.3 to replace the legacy Order Routing API (ORAPI). FIX API 2.3 employs an "ORAPI-like" interface, allowing customers easy transition from ORAPI to FIX API 2.3. This API has more functionality; in that it routes orders to CME's floor as well as allows for additional order types.
FIX API 2.3 Express
A streamlined version of the FIX API 2.3 used only for order routing to GLOBEX. Does not include retail preprocessing. 2.3 Express was developed to provide CME customers with a faster alternative to FIX API 2.3 for customers whose primary concern is speed.
FIX API 4.2
The FIX 4.2 is an order routing interface in the pure FIX 4.2 protocol. It routes orders only to GLOBEX and is part of the iLink project.
FIX server process
The name of the FIX server process to which the firms connect. Examples: FIXSOM00100, FIXOM69001,FIXSOM80502. Assignee: support and QA team.
Fix team
Resources who receive system defect list and determine the root cause and phase of defect. They implement a correction to the application logic or scripts, and adjust and re-execute their test plan before re-submitting to the test execution team (Most often this is comprised of developers).
FIX user ID
The client application’s logon ID for the CME FIX servers. The server authenticates this ID during the logon process. Only the assigned user ID may be used to logon to the CME FIX server. Examples: 00100A, 80502B. Assignee: support and QA team.
FIXSOM
Server-side software for FIX API.
FLAN
Financial LAN, provided but not managed by CME.
FLEX® options
Flexible term options providing more expiration dates and a broader range of strike prices, available for both American and European-style options.
Floor broker
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
An individual exchange member who generally trades only their own account or for an account they control. Also referred to as a local.
FOK (fill or kill)
See "fill or kill."
Following Day (or other similar expression)
The next business or trading day.
Foreign exchange (or FX)
GU=Give-up Trade OR SX=SGX MOS Trade (If this field is populated, the foreign firm field must also be populated, except in the case of multiple firm give-ups).
Foreign firm (or F-firm)
Clearing firm number of the single firm give-up or SGX firm (For multiple firm give-ups, this field may be left blank). Entry will automatically allocate the trade to this firm via GGU or MOS (mutual offset system). (If this field is populated, the foreign exchange field must be populated.
Formal review
A formal meeting at which a product is presented to the end user, customer, or other interested parties for comment and approval. It can also be a review of the management and technical activities and of the progress of the project.
Forms
All forms referred to herein; e.g. "Buyer Delivery Commitment," shall be forms prescribed by the Exchange.
Forward contract
A private agreement between buyer and seller for the future delivery of a commodity at an agreed price.
FQDN
Fully Qualified Domain Name. FQDN is the full name of a system, rather than just its host name. For example, merc is a host name, and merc.exch.com is an FQDN.
Frame relay
Industry-standard, switched data link layer protocol that handles multiple virtual circuits using HDLC encapsulation between connected devices. Frame relay is more efficient than X.25, the protocol for which it is generally considered a replacement.
Full-service broker
See "broker."
Function point analysis
Utilization of the quantities of system components (e.g. reports, database tables, and GUI objects) to derive estimates for a project budget.
Functional requirements
Functional requirements support a specialized department or function (e.g. engineering, manufacturing, and marketing). These requirements define conditions the project must include in the scope of its solution.
Fundamental analysis
The study of supply and demand information to help project futures price movement.
Fundamentalist
One who engages in fundamental analysis.
Futures
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 (FCM)
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.
Futures contract
A legally binding agreement to buy or sell a commodity at a specified price at a predetermined future time. Each future is standardized and specifies commodity, quality, quantity, delivery date and settlement.
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GALAX-C
CME hand-held trading terminals.
Gamma
The measure of the change in an option's delta given a change in the futures price. Equal to the change in delta divided by the change in futures price.
Gap
A price area at which the market didn't trade from one day to the next. See "breakaway gap", "exhaustion gap" and "runaway gap."
Gap analysis
An analysis of systems or procedures to find differences in functionality or benefits.
Gap theory
A type of technical analysis that studies gaps in prices.
Gateway
A special-purpose dedicated computer that attaches to two or more disparate networks and converts data packets from one form to another.
GCC
Stands for GLOBEX Control Center, the Exchange department that supports and maintains CME's electronic trading system.
GEM Division
The Growth and Emerging Markets Division of the Exchange. Holders of the membership interest associated with Chicago Mercantile Exchange Holdings Inc. Class B-4 Stock, who have been elected to membership shall be members of the GEM Division (“GEM members”).
GEM Fractional Interest
A share of Class B Common Stock, Series B-5.
GFX Corporation
A subsidiary of the Exchange established to make markets in currency contracts.
Give up
An order to be given to another member firm in clearing system, an allocation. An order executed by clearing firm A and given to clearing firm B where it will be cleared and processed. Give-up order indicator of "GU" is populated in F-Ex field.
GL NEGO (negotiator)
Order Management/NEGO window – Additional module to GL WIN – allowing order entry, modification and cancellation. Mandatory for traders.
GL SELECTOR
Used by the firm administrator. Interface control layer at the SLE level (on the broker's site / local server): filters orders before they are sent to the central engines. The filter is based on traders / applications authorization and credit control profiles. There is one selector per SLE.
GL WIN
The trader workstation application, provided by GL. It is – in its base version – a visualization application, and is completed with one or several additional modules.
GLOBEX Terminal Operator
A GLOBEX terminal operator is a person who is authorized to enter orders through a GLOBEX connection.
GLOBEX Trader
Front-end trading application that connects a user either directly or via the Internet, to CME’s electronic trading platform.
GLOBEX Trading Hours
Those hours designated by the Board of Directors for trading through GLOBEX for particular contracts.
GLOBEX user ID
An identifier assigned to access the GLOBEX electronic trading engine.
GLOBEX®
CME's electronic trading application.
Good-'til-canceled (GTC)
An order that remains in effect until it's canceled, filled or until the contract expires.
Good-'til-canceled (GTC) order
Also known as open order. An order that remains good until filled, or the contract expires. Only applicable to electronically traded ETH products (i.e., S&P E-mini, Turn).
GTD
Good-'til-date order. Order good until the date specified by the trader. If not filled at the end of the specified date/session, will be eliminated. Only applicable to electronically traded ETH products (i.e., S&P® E-mini, Turn).
GUI wallboards
Quote display application for wallboards on the trading floors.
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HAWK
TIBCO technology that supports system and application monitoring.
Head and shoulders
A sideways price formation at the top or bottom of the market that indicates a major market reversal.
Hedge
The purchase or sale of a futures contract as a temporary substitute for a cash market Offsetting price risk in any cash market by taking an equal but opposite position in the futures market. See "long hedge" and "short hedge."
Hedger
A person or firm who uses the futures market to offset price risk when intending to sell or buy the actual commodity. See "pure hedger," "selective hedger."
Hedging
Buying and selling futures as a risk management tool. See "long hedge" and "short hedge."
Hedging line of credit
Financing from your lender for the purpose of hedging the sale and purchase of commodities.
Hidden quantity
Order qualifier: indicates that the total quantity will not be displayed to the market, but only per increments as indicated. Difference between order quantity and displayed quantity is hidden.
High Limit
Absolute top price for a valid order per a given instrument. Any order with a higher price is rejected.
HIP
Host Input Processing handles incoming orders from brokers. Receives messages and sends them directly to the trading engine. Incoming messages are carried from the SLE, through this new path and delivered to the trading engine through the HIP connection.
Historical volatility
See "volatility."
Holder
One who purchases an option.
Holiday
Any day declared to be a holiday by these rules or by a resolution of the Board. The following days are declared holidays on which the Exchange shall be closed: New Year's Day, Washington's Birthday or President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Whenever said holiday falls on a weekend the Board may declare either the preceding or following business day as a holiday.
HON
For internal system purposes. Stands for "Host Order Number" – sequential number attributed by the host in order to identify an order. It is attributed per brokerage firm, per instrument and per (calendar) day. Also referred to as a central trading engine assigned number: NºCTE.
HOP
Host Output Processing sends outgoing acknowledgements of orders back to brokers. Acknowledgments and trade information is returned to the SLE and the user via the HOP connection.
House
Clearing member or a firm.
HSRP
Hot Standby Routing Protocol. Provides high network availability and transparent network topology changes. HSRP creates a hot standby router group with a lead router that services all packets sent to the hot standby address. The lead router is monitored by other routers in the group, and if it fails, one of these standby routers inherits the lead position and the hot standby group address. Cisco proprietary.
HTN
Host Trade Number – Sequential number attributed by the host in order to identify a trade. It is attributed per instrument and per (calendar) day.
Hundredweight
100 pounds. Abbreviated as cwt.
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iLink
CME's order routing interface to GLOBEX, built on the FIX 4.2 protocol. iLink is not an API; a socket connection creates a session between CME and the client through FIX protocol. Usage of FIX protocol eliminates the need for any Standard Template Libraries (STLs).
Implied volatility
See "volatility."
In-the-money
A call option with a strike price less than the underlying futures price. A put option with a strike price greater than the underlying futures price. A call option with a strike price lower (or a put option with a strike price higher) than the current market value of the underlying commodity for delivery at expiration time.
Index
A number that is representative of a whole market or market segment, usually computed by a sum product of a list of instruments' current prices and a list of weights assigned to these instruments. The index variations give trends of the market/market segment measured.
Infrastructure
The underlying framework of an organization or system, including organizational structures, policies, standards, training, facilities, and tools, that supports its ongoing performance.
Initial margin
The minimum performance bond deposit required from customers for each contract in accordance with the rules of the Exchange.
Initial Margin (Initial Performance Bond)
The funds required when a futures position (or a short options on futures position) is opened. See "performance bond."
Initiating phase
The first phase in the IDEAL approach, when sponsorship and the software process improvement infrastructure are defined and established.
Institutionalization
The building of infrastructure and culture that support methods, practices and procedures so that they are the ongoing way of doing business, even after those who originally define them are gone.
Instrument
Contract to be traded; e.g., GEZ9.
Integrated software management
The unification and integration of the software engineering and management activities into a coherent defined software process based on the organization's standard software process and related process assets.
Integration
Augmenting an organization's technology portfolio with additional technology solutions. Integration includes system and business integration.
Integration testing
In integration testing, the units validated during unit testing are combined into successively larger components and programs and are tested. This is accomplished as subprogram units are developed, such that integration testing extends (at least) through the coding phase.
Inter-commodity spread
A spread trade involving the same month of different but related futures contracts.
Inter-market spread
A spread trade involving same or related commodities at different exchanges. Also called an inter-exchange spread.
Interface requirements
Interface requirements generally will come from one of three categories: organizational interfaces, technical interfaces, interpersonal interfaces. These requirements define situations the project manager and team must include in the scope of its solution. Example: 1) A department enters insurance application forms, while another department must monitor and approve the amount of new insurance policies that can be issued. 2) A UNIX server passes an insurance application transaction to a HOST application for further processing. 3) A supervisor must approve his or her department's data entry of an insurance application form before processing can continue.
Intra-market spread
A spread trade involving different contract months of the same commodity. Also called an inter-delivery spread
Intrinsic value
The relationship of an option's in-the-money strike price to the current futures price. For a put: strike price - futures price. For a call: futures price - strike price.
Introducing broker (IB)
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, but not in accepting any money or securities to margin any resulting trades or contracts. The IB is associated with a correspondent futures commission merchant and must be licensed by the CFTC.
IOP
CME Indicative Opening Price. Calculated in real-time during pre-opening phase, each time an order is entered / modified / cancelled. Maximizes the quantities to be traded while minimizing the non-executed quantities.
ISL
Inter-Switch Link. Cisco proprietary protocol that maintains VLAN information as traffic flows between switches and routers.
Issue log (not to be confused with task list)
A list of questions and problems with team-wide interest or impact. The team deems the questions to be important enough to formalize the resolutions. Contains information such as date identified, purpose, author, category, description, priority, status, due date, assigned party, and resolution description.
Issues management
The process of monitoring questions that need to be communicated, tracked, and resolved across the team.
ISV
Independent software vendor. ISVs make and sell software products that run on one or more computer hardware or operating system platforms.
IXM
Same as instrument/contract (e.g., EDU8, EDZ8). See "contract."
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LAN
A local area network (LAN) is a group of computers and associated devices that share a common communications line and typically share the resources of a single processor or server within a small geographic area (for example, within an office building).
Last trading day
Day on which trading ceases for the maturing (current) delivery month.
Lead month
The most current contract month in which delivery may take place. The contract month closest to the current point in time.
Leverage
The use of a small amount of assets to control a greater amount of assets.
Leveraging phase
The final phase in the IDEAL approach, when lessons learned from the software process improvement effort are analyzed, resulting in updates to the software process improvement process. Sponsorship is renewed and new goals are set for the next improvement cycle.
Limit
A contract's maximum price advance or decline from the previous day's settlement price permitted in one trading session, as determined by the Exchange.
Limit move
See "maximum price fluctuation."
Limit order
Usually equivalent to "price." An order in which the customer sets a limit on price or other condition, as contrasted with the trading floor definition of a market order, which implies that the order should be filled as soon as possible.
Liquidation
Any transaction that offsets or closes out a long or short futures or options on futures position.
Livestock cycle
A long, repeating pattern of increasing and decreasing livestock supply and prices.
Locals
Exchange members who trade for their own account and/or fill orders for customers and whose activities provide market liquidity.
Logical design review model
Deriving entities, attributes and relationships from the business requirements. Typically this would result in an E-R (entity-relationship) diagram showing the attributes tied to an entity and the relationships between entities.
Long
One who has bought a futures or options on futures contract to establish a market position and who has not yet closed out this position through an offsetting procedure. The opposite of short. 1) One who has bought a futures or options contract to establish a market position; 2) a market position which obligates the holder to take delivery; 3) One who owns an inventory of commodities.
Long cash
You own and plan to sell a commodity.
Long hedge
The purchase of a futures contract in anticipation of an actual purchase in the cash market. Used by processors or exporters as protection against an advance in the cash price. See "hedge."
Long position
A position in which the trader has bought a futures contract that does not offset a previously established short position.
Lot
The term used to describe a designated number of contracts, e.g., a five-lot purchase. Also called "cars."
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Maintenance
The process of modifying a software system or component after delivery to correct faults, improve performance or other attributes, or adapt to a changed environment.
Maintenance (performance bond)
A sum, usually smaller than the initial performance bond, which must remain on deposit in the customer's account for any position. A drop in funds below this level requires a deposit back to initial margin levels. See "performance bond call."
Maintenance planning
The process of modifying a software system or component after delivery to correct faults, improve performance or other attributes or adapt to a changed environment.
Manager
A role that provides technical and administrative direction and control to individuals performing tasks or activities within the manager's area of responsibility. The traditional functions of a manager include planning, resourcing, organizing, directing and controlling work within an area of responsibility. Typical types of managers include first-line software manager, project manager, senior manager and software manager.
Manager liaison
Representative of senior management who serves as a liaison and advisor to the project manager and team members. Equipped with understanding of company strategy outside the project, they need to understand the evolution and goals of the business organization and assist the project to fulfill the business capability and meet/exceed expectations defined in the business case. Top candidate to maintain the project's success factor list and project risk watch list and one who may also do peer reviews.
Margin
The amount of money or collateral deposited by a client with his or her broker, or by a clearing member with the Clearing House, for the purpose of insuring the broker or Clearing House against loss on open futures or options contracts. The margin is not a part payment on a purchase. 1) Initial margin is the total amount of margin per contract required by the broker when a futures position is opened; 2) Maintenance margin is a sum which must be maintained on a deposit at all times. If a customer's equity in any futures position drops to or under the maintenance level because of adverse price action, the broker must issue a margin call to restore the customer's equity. Consult the CME Clearing House for margin requirements for specific contracts.
Mark-to-market
The daily adjustment of performance bond accounts to reflect profits and losses.
Market maker
Function that provides the capability to easily monitor a two-sided market in a specific instrument.
Market order
An order filled immediately at the best price available.
Market segment
A part of a market, that relates to a place, an exchange authority, a type of security (equity / bond / option / future), and a list of securities with a given set of trading methods.
Market value
The current value of all commodities held in a margin account.
Market-if-touched (MIT)
Order type: An MIT order to buy becomes a limit order if and when the instrument trades at a specific or lower trigger price; an MIT order to sell becomes a limit order if and when the instrument trades at a specified or higher trigger price.
Market-on-close (MOC)
Order type: can be submitted at any time within a trading session, but only executable at closing, at the closing price.
Matched trade
The execution of the buy and sell orders that together consummate a trade. A matched trade consists of one or more contracts and occurs when the same price is specified by buy and sell orders, for a specified number of contracts.
Maturity
Period within which a futures contract can be settled by delivery of the actual commodity; the period between the first notice day and the last trading day of a commodity futures contract.
Maximum price fluctuation
The maximum amount the contract price can change up or down during one trading session, as stipulated by Exchange rules. The limit of fluctuation in the price of a futures contract during any one trading session, as established by the Exchange; price limits. Consult the CME Clearing House contract specifications for specific price limit information.
MBF (must be filled, or "at best")
Order type: Must execute in total against all necessary orders of the opposite side.
MDAPI
Market Data Application Programming Interface, to be used in conjunction with CME's order entry APIs. Employs TIBCO technology. CME developed the Market Data API 1.0, which allows firms to receive real-time market data from the electronic markets, and at a later date, also from the open outcry markets.
Member
Member or broker / trader registered with the Exchange.
Method
A reasonably complete set of rules and criteria that establish a precise and repeatable way of performing a task and arriving at a desired result.
Methodology
A collection of methods, procedures, and standards that defines an integrated synthesis of engineering approaches to the development of a product.
Metric tracking
Managing progress on a project to ensure that the quantifiable characteristics of the development process are met.
Milestone
A scheduled event for which some individual is accountable and that is used to measure progress.
Milestone management
Managing the significant events of the project, usually the completion of a major deliverable, to ensure adherence to the schedule and prevent unnecessary creep (scope, schedule, etc.).
Minimum price fluctuation
The smallest increment of price movement possible in trading a given contract, often referred to as a tick. The minimum unit by which the price of a commodity can fluctuate, as established by the Exchange.
MIT (market if touched)
See "market if touched."
ML
Designates the "Limit Cumulated" display, which depicts the entire depth of the market, expressed in terms of cumulated totals at average prices.
Mnemonic
A short name uniquely representing an instrument (i.e., GEZ0, SPU0P7400).
MO
Designates the "Market by Order" display, which illustrates the entire depth of the market, displaying each bid and offer at every price level.
MOC (market order at closing)
See "market order at closing."
MOO
Market order at opening – a market order entered before an opening, to be executed only at the instrument's opening price only.
MOS
Stands for "Mutual Offset System." Designated order to be given to another Exchange (e.g. SGX).
Moving average chart
A chart recording moving averages (three-day, ten-day, etc.) of market prices.
Moving averages
A type of technical analysis using the averages of settlement prices.
Multicast
Single packets copied by the network and sent to a specific subset of network addresses. These addresses are specified in the destination address field.
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National Futures Association (NFA)
A self-regulatory organization for the commodity futures industry comprised of firms and individuals that conduct business with the public. Overseen by the CFTC.
NDS
Novell Directory Services, a popular software product for managing access to computer resources and keeping track of the users of a network, such as a company's intranet, from a single point of administration.
Nearby
The nearest active trading month of a futures or options on futures contract. Also referred to as the lead month.
NETscout
Cisco network management application that provides an easy-to-use GUI for monitoring RMON statistics and protocol analysis information. NETscout also provides extensive tools that simplify data collection, analysis, and reporting. These tools allow system administrators to monitor traffic, set thresholds, and capture data on any set of network traffic for any segment.
Network analysis
In information technology, a network is a series of points or nodes interconnected by communication paths. This is the process of identifying early and late start and finish dates for the uncompleted portion of project activities related to these nodes.
Non-serial options
Options for months for which there are existing futures contracts of the same months.
Non-technical requirements
Agreements, conditions, and/or contractual terms that affect and determine the management activities of a software project.
Not-held (NH)
A discretionary note on an order telling the floor broker that he or she won't be held accountable if the trade is executed outside the requirements of the order. Gives the broker discretion on getting the order filled.
Notional value
The underlying value (face value), normally expressed is U.S. dollars, of the financial instrument or commodity specified in a futures or options contract.
NSC-VF
Generic name for central trading system / futures version. It is the host used in GLOBEX, developed by SBF. NSC includes "NSC-central" (the trading engine) and "NSC-Frontal" (the communications front-end server). NSC stands for "Nouveau Systeme de Cotation" – sometimes also called SUPERCAC.
NºCTE
Central Trading Engine – assigned order number or HON, used for internal system purposes.
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OB
Order qualifier that instructs a broker to fill an order at a specific price or better.
Object-oriented development
Object-oriented development is an iterative life-cycle based on successive enlargement and refinement of a system through multiple development cycles of analysis, design, construction, and testing. Each cycle takes a relatively small set of requirements and proceeds through analysis, design, construction and testing. The system grows incrementally as each cycle is completed. The Unified Modeling Language (UML) is the standard notation tool used for this type of development.
OCO (order cancels order)
Order type: An order that includes two orders, one of which cancels the other when filled. Also referred to as one-cancels-other.
Offer (or Ask, or sell)
A willingness to sell at a given price; the opposite of bid.
Offset
Taking a second futures or options on futures position opposite to the initial or opening position. Selling if one has bought, or buying is one has sold.
Offsetting a hedge
For a short hedger, to buy back futures and sell a commodity. For a long hedger, to sell back futures and buy a commodity. Also called "lifting a hedge."
Offsetting a long option
Offset a put by selling a put with the same strike price. Offset a call by selling a call with the same strike price.
OHMS
Overhead Monitoring System, a CME-specific application for providing the visual display of quote information on the Upper Trading Floor.
OM
Order Management Database.
Omnibus account
An account held in the name of an entity or person which may be utilized for placing and clearing the trades of one or more undisclosed customers of the account holder.
Open interest
Total number of futures or options on futures contracts that have not yet been offset or fulfilled for delivery
Open order
An order that remains good until filled, cancelled or eliminated.
Open order
See good-til-canceled.
Open outcry
The method of trading publicly so that each trader has a fair chance to buy or sell.
Opening
The beginning of the trading session.
Opening price
The first price of an instrument at the beginning of the trade session.
Opening range
The range of prices at which the first bids and offers were made or first transactions were completed. Must be initiated by at least one trade.
Operational readiness test
Exercise to verify that the hardware and software of the technology solution fulfill operations requirements. Operational readiness test contains a planning and an execution phase.
Operations liaison
Representative of the enterprise computing community who serves as a liaison to the technology organization. He or she needs to understand the evolution and goals of the business organization. He or she needs to understand the system architecture and the action plan for production issues. He or she needs to articulate the operational requirements to the technology organization in the form of operational readiness test plan.
Option
The right, but not the obligation, to sell or buy the underlying (in this case, a futures contract) at a specified price within a specified time.
Option assignment
The random selection of an option writer to take a futures position when an option is exercised.
Option buyer
One who purchases an option and pays a premium.
Option seller
One who sells an option and receives a premium.
Orange crush
Nickname for FIX API 2.3 Express project.
ORAPI
Order Routing Application Programming Interface.
Order
A request – usually passed by a trader to the host – for buying or selling a given instrument at certain conditions more or less defined (conditions being price, quantity, type of order, etc.).
Order type
A property of an order, containing the conditions to which this order must comply for execution (e.g. limit, market, stop).
Order-cancels-order (OCO)
See "OCO."
Organizational risk
The risk associated with obtaining and using applicable resources and activities that affect project direction but that may be outside the project manager's control i.e., material availability, personnel availability, personnel skills, security, environmental impact, communications problems.
OSPF
Open Shortest Path First, OSPF is a router protocol used within larger autonomous system networks and multicasts updated information only when a change has taken place.
OTC
Over The Counter.
Out-of-the-money
An option with no intrinsic value. A call option with a strike price greater than the underlying futures price. A put option with a strike price less than the underlying futures price.
Out-trades
A situation that results when there is some confusion or error on a trade – for example, when both traders think they were buying.
Overbought/oversold
A technical opinion of a market which has risen/fallen too much in relation to underlying fundamental factors.
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Packs
A pack is the simultaneous purchase or sale of an equally-weighted, consecutive series of four futures contracts, quoted on an average net change basis from the previous day's settlement price. Packs provide a readily available, widely accepted method for executing multiple futures contracts with a single transaction.
Participant
Participant is a "client" computer system dialoging with one or several trading engines (e.g. a subscriber's SLE server).
Password
The client application’s password for the CME FIX servers. The server authenticates this unique password during the logon process. Only the assigned password may be used to logon to the CME FIX server. Examples: any combination of characters; usually is limited to seven characters. Assignee: support and QA team.
Peer review
A review of a software work product, following defined procedures, by the peers of the producers of the product for the purpose of identifying defects and improvements.
Peer review leader
An individual specifically trained and qualified to plan, organize, and lead a peer review.
Performance bond
Funds that must be deposited by a customer with his or her broker, by a broker with a clearing member or by a clearing member with the Clearing House. The performance bond helps to ensure the financial integrity of brokers, clearing members and the Exchange as a whole. Also referred to as margin.
Performance bond call
A demand for additional funds to bring the customer's account back up to the initial performance bond level whenever adverse price movement has caused the account to go below the maintenance. Previously referred to as a margin call. See "maintenance performance bond."
Performance evaluation
Identifying performance criteria at the beginning of the project to be able to evaluate progress by all individuals connected to the project, throughout the project (including post-mortem). Can include peer reviews, upward reviews, etc.
Performance requirements
A technical requirement that describe what the project solution must provide in terms of response times, transactions per second, number of simultaneous connections, etc.
Persistence / Persisting Data
Saving data in a database.
Phase (market)
Sub-unit of a session, where consistent actions take place (e.g. pre-opening, no-cancel, opening, continuous trading, etc.).
Phase containment
The concept of utilizing robust entry and exit criteria to minimize the number of defects which propagate downstream in the development life cycle.
Phases of software process (PM - IDEAL)
These phases include the following: Initiating, Diagnosing, Establishing, Acting and Leveraging.
Physical design review model
The database and DBMS specific model. The information contained would include tables, columns, data types, etc. Many to many relationships are resolved with intermediary tables. Some de-normalization may take place to aid performance.
Planning team
Resources who translate a design into the test plan.
Point and figure chart
A graph of prices charted with x's for price increases and o's for price decreases, used by the chartist for buy and sell signals.
Policy
A guiding principle, typically established by senior management, that is adopted by an organization or project to influence and determine decisions.
Port
The TCP/IP port to which the client application will connect on the CME FIX server. Examples: 8040, 3021. Assignee: support and QA team.
Portal
A term, generally synonymous with gateway, for a web site that is or proposes to be a major starting site for users when they get connected to the Web or that users tend to visit as an anchor site.
Position
An interest in the market, either long or short, in the form of open contracts. See "open interest."
Position trader
A trader who takes a position in the market and might hold that position over a long period of time.
Posting indicator, or posting action
Part of the clearing data.
Premium
The amount agreed upon between the buyer and seller for the purchase or sale of a futures option – the buyer pays the premium and the seller receives the premium. The excess of one futures contract price over that of another or over the cash market price. The price of an option. The price is made up of the intrinsic value (in the money) and time/volatility value (out of the money).
Price
Price to which the given instrument should be traded – in an order or a trade. Also called "limit."
Price order
An order to sell or buy at a certain price or better.
Prime contractor (see consultant)
An individual, partnership, corporation, or association that administers a subcontractor to complete certain phases of a project or an entire project.
Procedures
A written description or a course of action to be taken to perform a given task.
Process owner
The person who performs the process and is therefore in the best position to know what improvements should be made. Responsible for documenting and benchmarking the process, collecting and analyzing measures of the process, improving the process, and providing process education.
Processes
A sequence of steps performed for a given purpose, for example, the software development process.
Procurement planning
The process of identifying which project needs can be best met by procuring products or services outside the project organization. It involves consideration of whether to procure, how to procure, what to procure, how much to procure, and when to procure it.
Programmer
An individual who works from the detailed design and builds application logic to support human interfaces, system interfaces, and database access. The programmer also usually performs unit testing to verify that the application logic fulfills the detailed design.
Project
A temporary endeavor undertaken requiring a concerted effort that is focused on developing and enhancing a specific product. The product may include hardware, software, and other components. Typically a project has its own funding, cost accounting and delivery schedule.
Project change control
Coordinating changes across the entire project that includes document, technical changes, etc.
Project communications management
A subset of project management that includes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. It consists of communications planning, information distribution, performance reporting and administrative closure.
Project cost management
A subset of project management that includes the processes required to ensure that the project is completed within the approved budget. It consists of resource planning, cost estimating, cost budgeting, and cost control (Also see budgeting process: budget, cost, time estimation).
Project management
The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.
Project management team
The members of the project team who are directly involved in project management activities.
Project phase
A collection of logically related project activities, usually culminating in the completion of a major deliverable.
Project procurement management
A subset of project management that consists of procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract close-out.
Project resource management
A subset of project management that includes the processes required to make the most effective use of the people involved with the project. It consists of organizational planning, staff acquisition and team development. Can be closely tied with skills assessment/skill level tracking when implemented. See "resource planning."
Project time management
A subset of project management that includes the processes required to ensure timely completion of the project. It consists of activity definition, activity sequencing, activity duration estimating, schedule development and schedule control (a.k.a., Schedule Management, Time Tracking).
PRS
Price Reporting System.
Publish and subscribe
A uni-directional flow of messages from the publisher to the subscriber applications.
Pure hedger
A person who places a hedge to lock in a price for a commodity. He or she offsets the hedge and transacts in the cash market simultaneously.
Put breakeven
See "breakeven."
Put option
An option granting the right, but not the obligation, to sell a futures contract at the stated price prior to the expiration of the option.
Put profit / loss
For a long put, equal to the put value minus the premium. For a short put, equal to the premium minus the put value.
Put value
At expiration, equal to the strike price minus the futures price.
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Qualifier
The time for which the order is valid – FAK, Session, FOK, Day, GTC, GTD. Validity field options.
Quality
The degree to which a system, component, or process meets specified requirements.
Quality assurance
The process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.
Quality assurance unit
The organization unit that is assigned responsibility for quality control.
Quality control
The process of monitoring specific project results to determine if they comply with relevant quality standards.
Quality control unit
The organizational unit that is assigned responsibility for quality control.
Quantity
Number of instrument units (e.g. lots) to be traded, in order or a trade. Sometimes also called "size."
Quote
An indication of current bids and offers in the market on a particular instrument or spread.
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Rally
An upward movement of prices following a decline. The opposite of a reaction.
Range
The high and low prices or high and low bids and offers recorded during a specified time.
Rapid prototyping
This development model iterates in a mini-development phase until a system prototype is developed. After the prototype is complete, another approach can then be implemented to complete the full system. Rapid prototyping is particularly helpful in projects where the requirements are difficult to specify. The prototype can be used as a tool for analyzing and determining what the requirements should be.
Reference price
The price of an instrument used as "reference" – e.g., for determining an opening price, starting an algorithm, or figuring into an index – and is usually the settlement price or last closing price.
Registered representative
A person employed by, and soliciting business for, a commission house or futures commission merchant.
Requirements management
The process of overseeing each project's business requirements to ensure that they are fulfilled in the design and implementation phases.
Resistance line
A price level above which prices tend not to rise due to selling pressure.
Resource calendar
A resource calendar stores the schedule for one resource. It contains exceptions to the base calendar. An example of an exception is an individual resource's vacation days, which usually differ from the vacation days taken by other members of the team.
Resource planning
Determining what resources (people, equipment, materials) are needed in what quantities and which roles to perform project activities. Also see "resource management".
Resource variance
The event which the project manager reports that, to date, the project has used resources (i.e., man/hours, etc.) differently than the baseline indicated. If a project has used more resources to date than expected, it is running a positive variance. If a project has used less resources to date than expected, it is running a negative variance. The cause(s) of the variance should be assessed to determine if corrective action is required.
Retracement
A price move in the opposite direction of a recent trend.
RF
Radio Frequency refers to alternating current (AC) having characteristics such that, if the current is input to an antenna, an electromagnetic (EM) field is generated suitable for wireless broadcasting and/or communications.
RIP
Routing Information Protocol, a widely-used protocol for managing router information within a self-contained network such as a corporate local area network (LAN) or an interconnected group of such LANs.
Risk
Possibility of suffering loss.
Risk analysis & management
A subset of project management that includes the processes concerned with identifying, analyzing, and responding to project risk. It consists of risk identification, risk quantification, risk response development and risk response control.
Risk identification
Determining which risk events are likely to affect the project.
Risk management plan
The collection of plans that describe the risk management activities to be performed on a project.
Risk quantification
Evaluating the probability of risk event occurrence and effect.
RLC
Reseau Local de Collecte or local collection network. A message switching system that receives and resends standardized messages from the CTE to the XDIFF.
Round-turn
See "commission."
Routing ID
The ID from which all responses from the specific trading entity originate and to which all responses are sent. Each routing ID is unique to the assigned firm account. Thus requests which come from a specific routing ID can only be responded to through that specific routing ID. Examples: FIXSOM001A, FIXSOM001B, FIXSOM80502. Assignee: support and QA team.
RSM
Route Switch Module.
Runaway gap
A gap in prices after a trend has begun that signals the halfway point of a market move.
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Scalp
To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day, hour or even just a few minutes.
Schedule
The risk associated with project timeline growth, or the increased timeline of one project requiring a reduction in the timeline of another project.
Schedule variance
The event which the project manager reports that, to date, the project’s earned value (i.e. work complete) is different than the baselined deliverable schedule forecast. If a project’s earned value is greater than expected, it is running a positive schedule variance. If a project’s earned value is less than expected, it is running a negative schedule variance.
Scope management
A subset of project management that includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. It consists of initiation, scope planning, scope definition, scope verification, and scope change control.
SEC
U.S. Securities and Exchange Commission, established to protect investors and maintain the integrity of the securities markets.
Selective hedger
A person who hedges only when he or she believes that prices are likely to move against him or her.
Selling climax
An extraordinarily high volume occurring suddenly in a downtrend signaling the end of the trend.
Senior manager
A management role at a high enough level in an organization that the primary focus is the long-term vitality of the organization, rather than short-term project and contractual concerns and pressures.
Serial options
Options for months for which there are no futures contracts. The underlying futures contract for a serial option month would be the next nearby futures contract.
Server
Used to designate the client server system that hosts the SLE, SLC, GL selector, etc. application for a firm.
Server logs
(History logs/audit trails from) a computer that shares its resources, such as printers and files, with other computers on the network. An example of this is a Novell NetWare server which shares its disk space with a workstation that does not have a disk drive of its own.
Session (market)
For a given class, period of time within which a consistent set of trading actions takes place – usually composed of the following phases: initialization, pre-opening/opening, trading, closing, post-session processing.
Settlement price
A figure determined by the closing range that is used to calculate gains and losses in futures market accounts, performance bond calls and invoice prices for deliveries. See "closing range."
Short
One who has sold a futures contract to establish a market position and who has not yet closed out this position through an offsetting procedure. The opposite of long.
Short cash
Describes a trader who needs and plans to buy a commodity.
Short hedge
The sale of a futures contract in anticipation of a later cash market sale. Used to eliminate or lessen the possible decline in value of ownership of an approximately equal amount of the cash financial instrument or physical commodity. See "hedge."
Side
A side counts the buy and the sell as separate events. Each matched trades, and each contract, has two sides — the buyer side and the seller side. Taken together, these two sides equal one round turn per unit of volume. Measuring matched trade volume "per side" counts volume on each side of the trade.
Sideways trend
Seen in a bar chart when prices tend not to go above or below a certain range of levels.
Single-stock futures (SSF)
Futures contracts on individual stocks.
SLC
GLOBEX UNIX server, (Serveur Local de Collecte). One of the processes at the broker site / local server, receiving the broadcast flow and disseminating (part of) it to the connected traders' workstations.
SLE
GLOBEX UNIX server, (Serveur Local D'Emission). One of the processes at the broker site / local server, handling the broker's order book and all interactive exchange (orders & trades) between the brokers and the central applications. Also called Interactor.
SLE name
The name of the SLE to which the firm sends its trades. Examples: SLE001C, SLE690,SLE805. Assignee: GCC, Unix.
SLE user ID (UTI)
The user ID employed to log on to the SLE to which the firm sends its trades.
SLE user password
The password employed to log on to the SLE to which the firm sends its trades. Examples: a seven character string; the same password is used for every FIX firm, though users log on to different SLEs. Assignee: GCC, Unix.
SLEEG
SLE execution gateway. Removes queue messages from the OM and converts them into SLE messages.
SNMP
Simple Network Management Protocol, the protocol governing network management and the monitoring of network devices and their functions. It is not necessarily limited to TCP/IP networks.
Software life cycle
The period of time that begins when a software product is conceived and ends when the software is no longer available for use. The software life cycle typically includes a concept phase, requirements phase, design phase, implementation phase, test phase, installation and checkout phase, operation and maintenance phase, and sometimes, retirement phase.
Software quality management
Adherence to the process of defining quality goals for a software product, establishing plans to achieve these goals, and monitoring and adjusting the software plans, software work products, activities, and quality goals to satisfy the needs and desires of the customer and end users.
Spanning tree
Spanning tree is a protocol designed to allow bridges to map a redundant topology without causing loops in the network, which can create broadcast storms, crippling a network and destroying network performance.
Speculator
One who attempts to anticipate price changes and, through buying and selling futures contracts, aims to make profits. Does not use the futures market in connection with the production, processing, marketing or handling of a product. The speculator has no interest in taking delivery.
SPI
The market command tool used by the Surveillance.
Spiral model
This model, described by Boehm, is another development method that iterates between the requirements, design, and implementation phases. However, the spiral model continues iterating until the final system is complete. Within each iteration, the spiral model follows a phased approach similar to the waterfall model.
Spot month
The nearest trading month which may or may not be the current calendar month. Usually used as the current delivery month for a commodity.
Spot price
See "cash price."
Spread
The price difference between two contracts. Holding a long and a short position in two related futures or options on futures contracts, with the objective of profiting from a changing price relationship.
Spread order
An order that indicates the purchase and sale of futures contracts simultaneously.
Spread trade
The simultaneous purchase and sale of futures contracts for the same commodity or instrument for delivery in different months or in different but related markets. A spreader is not concerned with the direction in which the market moves, but only with the difference between the prices of each contract.
Stage
A partition of the software effort that is of a manageable size and that represents a meaningful and measurable set of related tasks performed by the project. A stage is usually considered a subdivision of a software life cycle and is often ended with a formal review (or other well-defined criteria) prior to the onset of the following stage.
Stakeholder
Individuals and organizations that are involved in or may be affected by project activities.
Stakeholder role
Individuals and organizations who are involved in or may be affected by project activities.
Standard
Mandatory requirements employed and enforced to prescribe a disciplined uniform approach.
Start-to-finish dependency
The "from" activity must start before the "to" activity can finish.
Start-to-start dependency
The "from" activity must start before the "to" activity can start.
Statement of work
A narrative description of products or services to be supplied under contract to the customer. This is usually accomplished during the first phases of the project.
Status reports (individual)
Document completed on a weekly basis by each project resource containing: events and accomplishments of the past week, goals and expectations for the coming week, issues, and unavailability (e.g., vacation, training). The status report should also track time spent on each activity.
Status reports (project specific)
Document completed on a periodic basis by the project leader containing: project phases and milestone dates, events and accomplishments of the past week, goals and expectations for the coming week, and issues to be elevated to senior management. This report can also contain comments and the trend (improvement, decline, no change) of the project's SQERT model (Scope, Quality, Effort, Risk, and Time).
Stop close only order
A stop order that is executed only during the closing range of the trading session.
Stop limit order
An order that becomes a limit order only when the market trades at a specified price.
Stop loss
Order type: Same as stop limit, but with no limit indication: when triggered, will execute like an MBF.
Stop order
An order which specifies a price at which the order is activated and becomes a limit order. A buy stop is entered above the current market and becomes a limit order when the commodity trades at or above the specified stop trigger price. A sell stop is entered below the current market. It becomes a limit order when the commodity trades at the stop price or below. The stop can immediately execute up to the limit price.
Stop with a price limit
A stop order with a specified worst price at which the order can be filled.
Storage gain
The selling price received after storage minus the previous harvest market price.
Straddle
The purchase of a put and a call, in which the options have the same expiration and same strike price, called a long straddle. Also, the sale of both a put and a call in which the options have the same expiration and same strike price, called a short straddle.
Strangle
The purchase of a put and a call, in which the options have the same expiration and the put strike is lower than the call strike, called a long strangle. Also the sale of a put and a call, in which the options have the same expiration and the put strike is lower than the call strike, call a short strangle.
Strike (price)
The price at which the option buyer may purchase or sell the underlying futures contract upon exercise. See "exercise price."
Subcontractor
An individual, partnership, corporation, or association that contracts with an organization to complete certain phases of a project or an entire project.
Subscriber
See also member (firm) broker.
Success factors
Translation of the most recent phase's deliverable (e.g. business requirements, business case, design specifications, test plan) and the project environment intangibles into a finite set of project characteristics considered to be critical for fulfilling the business case. The success factors are often maintained by the manager liaison.
Supply
The quantity of a commodity that producers are willing to provide to the market at a given price.
Supportability
Supportability risk is the risk associated with fielding and maintaining systems and processes that are currently being developed or that have been developed and are being deployed i.e., reliability and maintainability, training and training support, equipment, human resource considerations, technical data.
Symbol
Equivalent to "instrument."
Symmetrical triangles
A price formation that can either signal a reversal or a continuation of price movement.
Synthetic call option
A combination of a long futures contract and a long put, called a synthetic long call. Also, a combination of a short futures contract and a short put, called a synthetic short call.
Synthetic futures
A combination of a put and a call with the same strike price, in which both are bullish, called synthetic long futures. Also, a combination of a put and a call with the same strike price, in which both are bearish, called synthetic short futures.
Synthetic option
A combination of a futures contract and an option, in which one is bullish and one is bearish.
Synthetic put option
A combination of a short futures contract and a long call, called a synthetic long put. Also, a combination of a long futures contract and a short call, called a synthetic short put.
System integration
The process of interfacing and/or combining more than one sub-system or unit to either augment an existing system or create a new one. This is the end-result of integration testing.
System message
System messages are informational in nature, a measure of system usage and created as a result of processing a system transaction. If a system transaction (e.g., entry of a buy order) results in a matched trade, the system informs the buyer with a message regarding the details of the buy, the seller is informed of the details of the sell, and the public is informed of the trade. From a technology perspective, each of these three events is considered a system message.
System requirement
A condition or capability that must be met or possessed by a system or system component to satisfy a condition or capability needed by a user to solve a problem.
System transaction
An instruction to a computer system to take an action. Examples of system transactions include an order to buy a contract, to sell a contract, to cancel an order, or to modify an order. For electronic trading systems, a key measure of performance capacity is the number of transactions per second (TPS) — i.e., the number of bids and offers — the system can process.
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Target price
An expected selling or buying price. For long and short hedges with futures: futures price + expected basis. For puts: futures price - premium + expected basis. For calls: futures price + premium + expected basis.
Task leader
The leader of a technical team for a specific task who has technical responsibility and provides technical direction to the staff working on the task.
Task list
A list of required activities in order to complete the project. A task list can be a full set or sub set of a work breakdown structure (WBS).
TCP/IP
Transmission Control Protocol/Internet Protocol. Common name for the suite of protocols developed by the U.S. Dept. of Defense in the 1970s to support the construction of worldwide internetworks. TCP and IP are the two best-known protocols in the suite.
Team
A collection of people, often drawn from diverse but related groups, assigned to perform a well-defined function for an organization or a project. Team members may be part-time participants of the team and have other primary responsibilities.
Team building
Establishing good practices and support to ensure team cohesion, effectiveness and continuity. Such practices include sharing goals, common purposes, clearly defining roles, establishing trust, self-disclosure, good communication, rewards and recognition and training.
Technical
Technical risk is the risk associated with evolving a new design (or approach) either to provide a greater level of performance or to accommodate some new constraint i.e., physical properties, material properties, testing and modeling, integration and interface, software design, safety.
Technical analysis
The study of historical price patterns to help forecast futures prices.
Technical architect
Senior representative of the technology organization who serves as a liaison to the system developers, database administrators, and the enterprise computing organization. He or she translates the system requirements and operational requirements to complete a topology of the hardware components. He or she leads the test and production environment set up. He or she participates in operational readiness test plan and execution. He or she needs to understand the evolution and goals of the business organization. He or she needs to understand the technical infrastructure standards of the enterprise computing organization.
Technical architect role
The collection of individuals (both managers and staff) who are responsible for coordinating and arranging the training activities for an organization. This group typically prepares and conducts most of the training courses and coordinates use of other training veh |
