Uncovered Options Trading System
Taker is the buyer of an option contract.
Technical Analysis (in opposite to fundamental analysis) is an approach to forecasting commodity prices that examines patterns of price change, rates of change, and changes in volume of trading and open interest, without regard to underlying fundamental market factors. Technical analysis can work consistently only if the theory that price movements are a random walk is incorrect.
Ted Spread is the difference between the price of the three-month U.S. Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.
Tender means giving a notice to the clearing organization of the intention to initiate delivery of the physical commodity in satisfaction of a short futures contract.
Terminal Elevator is an elevator located at a point of greatest accumulation in the movement of agricultural products that stores the commodity or moves it to processors.
Terminal Market is usually synonymous with commodity exchange or futures market, specifically in the United Kingdom.
Tick (also referred to as Minimum Price Fluctuation) is the smallest increment of price movement for a futures contract. Tick is a minimum change in price up or down. An up-tick means that the last trade was at a higher price than the one preceding it. A down-tick means that the last price was lower than the one preceding it. See Minimum Price Fluctuation.
Time Decay is the tendency of an option to decline in value (decline in time value) as the expiration date approaches, especially if the price of the underlying instrument is exhibiting low volatility.
Time Spread ( also called Horizontal Spread) is a trading strategy that involves selling of a nearby option and buying of a more deferred option with the same strike price.
Time value (also called Extrinsic Value) is the portion of an option's premium that exceeds the intrinsic value. The amount of money options buyers are willing to pay for an option in anticipation that over time a change in the underlying futures price will cause the option to increase in value. The time value of an option reflects the probability that the option will move into-the-money. Therefore, the longer the time remaining until expiration of the option, the greater its time value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value.
Time-of-Day Order is an order that is to be executed at a given minute in the session. For example, "Sell 10 April corn at 14:30 p.m."
To-Arrive Contract is a transaction providing for subsequent delivery within a stipulated time limit of a specific grade of a commodity.
Total Return Swap (also called total rate of return swap, or TR swap) is a type of credit derivative in which one counterparty receives the total return (interest payments and any capital gains or losses) from a specified reference asset and the other counterparty receives a specified fixed or floating cash flow that is not related to the creditworthiness of the reference asset.
Trade on close is buying or selling at the end of the trading session (at market close) within the closing price range.
Trade on opening is buying or selling at the beginning of a trading session (at market open) within the open price range.
Trade Option is a commodity option transaction in which the purchaser is reasonably believed by the writer to be engaged in business involving use of that commodity or a related commodity.
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.
A facility, often operated by a clearing member that clears trades for locals, where e-locals who trade for their own account can gather to trade on an electronic trading facility (especially if the exchange is all-electronic and there is no pit or ring).
Trading Facility is a person or group of persons that provides a physical or electronic facility or system in which multiple participants have the ability to execute or trade agreements, contracts, or transactions by accepting bids and offers made by other participants in the facility or system.
Trading Floor is a physical trading facility where traders make bids and offers via open outcry or the specialist system.
Transaction is an entry or liquidation of a trade.
A term "Transfer Notice" is used on some exchanges to describe a notice of delivery.
Transfer Trades (also called Ex-Pit transactions) are entries made upon the books of futures commission merchants (CFM) for the purpose of: transferring existing trades from one account to another within the same firm where no change in ownership is involved, or for the purpose of transferring existing trades from the books of one FCM to the books of another FCM where no change in ownership is involved.
Transferable Option (or Contract) is a contract that permits a position in the option market to be offset by a transaction on the opposite side of the market in the same contract.
Treasury Bill (or T-Bill) is Short-term zero coupon U.S. government obligations, generally issued with various maturities of up to one year.
Treasury Bonds (or T-Bonds) are Long-term (more than ten years) obligations of the U.S. government that pay interest semi-annually until they mature, at which time the principal and the final interest payment is paid to the investor.
Treasury Notes are the same as Treasury bonds except that Treasury notes are medium-term (more than one year but not more than ten years).
Trend is the general direction, either upward or downward, in which prices have been moving.
In charting, a Trendline is a line drawn across the bottom or top of a price chart indicating the direction or trend of price movement. If up, the trendline is called bullish; if down, it is called bearish.
All orders not filled by the end of a trading day are deemed "unable" and void, unless they are designated GTC (Good Until Cancelled) or open.
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.