Options Trading System

Glossary

Ring

See Also:

Broker: Broker is a company or individual that executes futures and options orders on behalf of financial and commercial institutions and/or the general public. A broker charges a fee or commission for executing buy or sell orders for a customer. In commodity futures trading, the term may refer to:
a) a Floor broker, a person who actually executes orders on the trading floor of an exchange;
b) an Account executive or associated person, the person who deals with customers in the offices of futures commission merchants;
c) the futures commission merchant.

Exchange: A central marketplace with established rules and regulations where buyers and sellers meet to trade futures and options contracts or securities. Exchanges include designated contract markets and derivatives transaction execution facilities.

Futures: Futures (also called Futures Contract) is a legally binding agreement to buy or sell a commodity or financial instrument at a later date. Futures contracts are normally standardized according to the quality, quantity, delivery time and location for each commodity, with price as the only variable.

Pit: Pit (also referred to as a ring) is the area on the trading floor where trading in futures or options contracts is conducted by open outcry. It is a specially constructed area on the trading floor of some exchanges where trading in a futures contract or option is conducted. On other exchanges, the term ring designates the trading area for commodity contract.

Trader: Trader is a merchant involved in cash commodities or a professional speculator who trades for his own account and who typically holds exchange trading privileges.

Trading Floor: Trading Floor is a physical trading facility where traders make bids and offers via open outcry or the specialist system.

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