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C & F - "Cost and Freight" paid to a point of destination and included in the price quoted.

Call - (1) A period at the opening and the close of some futures markets in which the price for each futures contract is established by auction; (2) Buyer's Call generally applies to cotton, also called "call sale." A purchase of a specified quantity of a specific grade of a commodity at a fixed number of points above or below a specified delivery month futures price with the buyer allowed a period of time to fix the price either by purchasing a future for the account of the seller or telling the seller when he wishes to fix the price; (3) Seller's Call, also called "call purchase," is the same as the buyer's call except that the seller has the right to determine the time to fix the price; (4) option contract giving the buyer the right to purchase the commodity or to enter into a long position; and (5) the requirement that a financial instrument be returned to the issuer prior to maturity, with principal and accrued interest paid off upon return.

Call Cotton - Cotton bought or sold on call. See Call.

Called - Another term for "exercised" when the option is a call. The writer of a call must deliver the indicated underlying commodity when the option is exercised or called.

Call Option - A contract that entitles the buyer/taker to buy a fixed quantity of a commodity at a stipulated basis or striking price at any time up to the expiration of the option. The buyer pays a premium to the seller/grantor for this contract. A call option is bought with the expectation of a rise in prices. See Put Option.

Call Rule - An exchange regulation under which an official bid price for a cash commodity is competitively established at the close of each day's trading. It holds until the next opening of the exchange.

Capping - Effecting commodity or security transactions shortly prior to an option's expiration date by depressing or preventing a rise in the price of the commodity or security so that previously written call options will expire worthless and the premium received therefrom will be protected.

Carrying Broker - A member of a commodity exchange, usually a futures commission merchant, through whom another broker or customer elects to clear all or part of its trades.

Carrying Charges - Cost of storing a physical commodity or holding a financial instrument over a period of time. Includes insurance, storage, and interest on the invested funds as well as other incidental costs. It is a carrying charge market when there are higher futures prices for each successive contract maturity. If the carrying charge is adequate to reimburse the holder, it is called a "full charge." Also see Negative Carry, Positive Carry and Contango.

Cash Commodity - The physical or actual commodity as distinguished from the futures contract. Sometimes called Spot Commodity or Actuals.

Cash Forward Sale - See Forward Contracting.

Cash Market - The market for the cash commodity (as contrasted to a futures contract), taking the form of: (1) an organized, self-regulated central market (e.g., a commodity exchange); (2) a decentralized over-the-counter market; or (3) a local organization, such as a grain elevator or meat processor, which provides a market for a small region.

Cash Price - The price in the marketplace for actual cash or spot commodities to be delivered via customary market channels.

Cash Settlement - A method of settling certain futures or option contracts whereby the seller (or short) pays the buyer (or long) the cash value of the commodity traded according to a procedure specified in the contract.

CCC - See Commodity Credit Corporation.

CD - See Certificate of Deposit.

CEA - See Commodity Exchange Authority.

Certificate of Deposit (CD) - A time deposit with a specific maturity evidenced by a certificate. Large-denomination CDs are typically negotiable.

CFTC - See Commodity Futures Trading Commission.

CFO - Cancel Former Order.

Certificated or Certified Stocks - Stocks of a commodity that have been inspected and found to be of a quality deliverable against futures contracts, stored at the delivery points designated as regular or acceptable for delivery by the commodity exchange. In grain called "stocks in deliverable position." See Deliverable Stocks.

Changer - A clearing member of both the Mid-America Commodity Exchange and another futures exchange who, for a fee, will assume the opposite side of a transaction on the MCE by taking a spread position between the MCE and another futures exchange which trades an identical, but larger, contract. Through this service, the changer provides liquidity for the MCE and an economical mechanism for arbitrage between the two markets.

Charting - The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average movements of price, volume of trading and open interest See Technical Analysis.

Chartist - Technical trader who reacts to signals read from graphs of price movements.

Cheapest-to-Deliver - Usually refers to the selection of bonds deliverable against the expiring bond futures contract.

Chooser Option - An option which is transacted at the present but which at some prespecified future date is chosen to be either a put or a call option.

Churning - Excessive trading of an account by broker with control of the account for the purpose of generating commissions while disregarding the interests of the customer.

Circuit Breaker - A system of trading halts and price limits on equities and derivative markets designed to provide a cooling-off period during large, intraday market declines. The first known use of the term circuit breaker in this context was in the Report of the Presidential Task Force on Market Mechanisms (January 1988), which recommended that circuit breakers he adopted following the market break of October 1987.

C.I.F. - Cost, insurance and freight paid to a point of destination and included in the price quoted.

Class (of options) - Options of the same type (i.e., either puts or calls, but not both) covering the same underlying futures contract or physical commodity (e.g., a March call at strike price 62 and a May call at strike price 58).

Clearing - The procedure through which the clearing house or association 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.

Clearing House - An adjunct to, or division of, a commodity exchange through which transactions executed on the floor of the exchange are settled. Also charged with assuring the proper conduct of the exchange's delivery procedures and the adequate financing of the trading.

Clearing Member - A member of the Clearing House or Association. All trades of a non-clearing member must be registered and eventually settled through a clearing member.

Clearing Price - See Settlement Price.

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-Out - Liquidating an existing long or short futures or option position with an equal and opposite transaction. Also known as Offset.

Closing Price (or Range) - The price (or price range) recorded in trading that takes place in the final moments of a day's trade that are officially designated as the "close."

Combination - Puts and calls held either long or short with different strike prices and expirations.

Commercial - An entity involved in the production, processing, or merchandising of a commodity.

Commercial Grain Stocks - Domestic grain in store in public and private elevators at important markets and grain afloat in vessels or barges in harbors of lakes and seaboard ports.

Commercial Paper - Short-term promissory notes issued in bearer form by large corporations, with maturities ranging from 5 to 270 days. Since the notes are unsecured, large corporations with impeccable credit ratings generally dominate the commercial paper market.

Commission - The charge made by a commission house for buying and selling commodities.

Commitments - See Open Interest.

Commodity Futures Trading Commission (CFTC) -The Federal regulatory agency established by the CFTC Act of 1974 to administer the Commodity Exchange Act.

Commodity-linked Bond - A bond in which payment to the investor is dependent on the price level of such commodities as crude oil, gold, or silver at maturity.

Commodity Option - See Option, Puts and Calls.

Commodity Pool - An investment trust, syndicate or similar form of enterprise operated for the purpose of trading commodity futures or option contracts.

Commodity Pool Operator (CPO) - Individuals or firms in businesses similar to investment trusts or syndicates that solicit or accept funds, securities or property for the purpose of trading commodity futures contracts or commodity options.

Commodity Price Index - Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities (for example, grains or livestock).

Commodity Trading Advisor (CTA) - Individuals or firms that, for pay, issue analyses or reports concerning commodities, including the advisability of trading in commodity futures or options.

Congestion - (1) A market situation in which shorts attempting to cover their positions are unable to find an adequate supply of contracts provided by longs willing to liquidate or by new sellers willing to enter the market, except at sharply higher prices; (2) in technical analysis, a period of time characterized by repetitious and limited price fluctuations.

Consignment - A shipment made by a producer or dealer to an agent elsewhere with the understanding that the commodities in question will be cared for or sold at the highest obtainable price. Title to the merchandise shipped on consignment rests with the shipper until the goods are disposed of according to agreement.

Contango - Market situation in which prices in succeeding delivery months are progressively higher than in the nearest delivery month; the opposite of "backwardation."

Contract - (l) A term of references describing a unit of trading for a commodity future or option; (2) An agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable.

Contract Grades - Those grades of a commodity which have been officially approved by an exchange as deliverable in settlement of a futures contract.

Contract Market - (1) A board of trade or exchange designated by the Commodity Futures Trading Commission to trade futures or options under the Commodity Exchange Act; (2) Sometimes the futures contract itself (e.g., corn is a contract market).

Contract Month - See Delivery Month

Contract Unit - The actual amount of a commodity represented in a contract.

Controlled Account - Any account for which trading is directed by someone other than the owner. Also called a Managed Account or a Discretionary Account.

Convergence - The tendency for prices of physicals and futures to approach one another, usually during the delivery month. Also called a "narrowing of the basis."

Conversion - When trading options on futures contracts, a position created by selling a call option, buying a put option, and buying the underlying futures contract, where the options have the same strike price and the same expiration.

Corner - (1) To corner is to secure such relative control of a commodity or security that its price can be manipulated; (2) In the extreme situation, obtaining contracts requiring delivery of more commodities or securities than are available for delivery.

Corn-Hog Ratio - See Feed Ratio.

Cost of Tender - Total of various charges incurred when a commodity is certified and delivered on a futures contract.

Counter-Trend Trading - In technical analysis, the method by which a trader takes a position contrary to the current market direction in anticipation of a change in that direction.

Coupon (Coupon Rate) - A fixed dollar amount of interest payable per annum, stated as a percentage of principal value, usually payable in semiannual installments.

Cover - (1) Purchasing futures to offset a short position. Same as Short Covering. See Offset, Liquidation; (2) To have in hand the physical commodity when a short futures or leverage sale is made, or to acquire the commodity that might be deliverable on a short sale.

Covered Option - A short call or put option position which is covered by the sale or purchase of the underlying futures contract or physical commodities. For example, in the case of options on futures contracts a covered call is a short call position combined with a long futures position. A covered put is a short put position combined with a short futures position.

Cox-Ross-Rubinstein Option Pricing Model - An option-pricing logarithm developed by J. Cox, S. Ross and M. Rubinstein which can be adapted to include effects not included in the Black-Scholes model (e.g. early exercise and price supports).

CPO - See Commodity Pool Operator.

Crack - In energy futures, the simultaneous purchase of crude oil futures and the sale of petroleum product futures to establish a refining margin. See Gross Processing Margin.

Crop Year - The time period from one harvest to the next, varying according to the commodity normally June to May in India.

Cross-Hedge - Hedging a cash market position in a futures contract for a different but price-related commodity.

Cross margining - A procedure for margining related securities options and futures contracts jointly when different clearing houses clear each side of the position.

Cross-Rate - In foreign exchange, the price of one currency in terms of another currency in the market of a third country. For example, a London dollar cross-rate could be the price of one U.S. dollar in terms of deutsche marks on the London market.

Cross Trading - Offsetting or noncompetitive match of the buy order of one customer against the sell order of another, a practice that is permissible only when executed in accordance with the Commodity Exchange Act, CFTC regulations, and rules of the contract market.

Crush Spread - In the soybean futures market, the simultaneous purchase of soybean futures and the sale of soybean meal and soybean oil futures to establish a processing margin. See Gross Processing Margin.

CTA - See Commodity Trading Advisor.

Curb Trading - Trading by telephone or by other means that takes place after the official market has closed. Originally, it took place in the street, on the curb outside the market.

Current Delivery Month - The futures contract which matures and becomes deliverable during the present month. Also called Spot month.

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