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Glossary


Bear Market

Bear Market is a market in which prices generally are declining over a longer period of time. bear market is opposite of bull market. A market participant who believes prices will move lower is called a "bear."A news item is considered bearish if it is expected to result in lower prices. Bear market is usually called as Bearish market.

See Also:

Bear: Bear is one who expects a decline in prices. The Bear trader is is the opposite of a Bull trader. A Bear (bearish trader) expect to profit on declining price. A news item is considered bearish if it is expected to result in lower prices.

Bull: Bull is a trader who expects a rise in prices. Bull trader is the opposite of bear. Bullish trader expects to profit on rising price. A news item is considered bullish if it is expected to result in higher prices.

Bull Market: Bull Market (also called Bullish Market) is a market in which prices generally are rising over a longer period of time. Bull market is opposite of bear market. A market participant who believes prices will move higher is called a "bull." A news item is considered bullish if it is expected to result in higher prices.

Call: There are three meaning of the "Call" term. It could be:
1) An option contract giving the buyer the right but not the obligation to purchase a commodity or other asset or to enter into a long futures position;
2) a period at the opening and the close of some futures markets in which the price for each futures contract is established by auction;
3) the requirement that a financial instrument be returned to the issuer prior to maturity, with principal and accrued interest paid off upon return.

Called: Called is another term for exercised when an option is a call. In the case of an option on a physical, the writer of a call must deliver the indicated underlying commodity when the option is exercised or called. In the case of an option on a futures contract, a futures position will be created that will require margin, unless the writer of the call has an offsetting position.

Long: Long Futures trader is a trader who has bought futures contracts or options on futures contracts or owns a cash commodity. Long position (long trading) is opposite to Short position (Short trading).

Low: Low is the lowest price of the day for a particular futures or options on futures contract.

Par: Par refers to the standard delivery point(s) and/or quality of a commodity that is deliverable on a futures contract at contract price. Serves as a benchmark upon which to base discounts or premiums for varying quality and delivery locations. Par in bond markets refers to an index (usually 100) representing the face value of a bond.

Rally: Rally is an upward movement of prices.


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Risk Statement:

Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.

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