Calendar spread:
The simultaneous purchase of one contract month and sale of another contract month for the same instrument on the same exchange.

Call (option):
The right, but not the obligation, to purchase a particular futures contract at a stated price on or before a stated date. Buyers of call options generally hope to profit from an increase in the price of the underlying.

Carrying Charges:
Costs incurred in holding a physical commodity or financial instrument, generally includes interest, insurance and storage.

Carry Curve:
This describes a phenomenon in which a futures contract price trades at a higher level than the price of the stock.

Cash Commodity:
The physical commodity, as distinguished from futures contracts. Also known as Actuals.

Cash Market:
The underlying commodity, security, currency or money market in which transactions for the purchase and sale of cash instruments (to which futures and derivatives contracts relate) are carried out.

Cash Settlement:
The receipt of money instead of the underlying commodity to fulfill the delivery requirements of the futures contract. The amount of money is based on the daily settlement price of the underlying commodity.

Change:
The difference between the current price and the previous day’s close or settlement price.

Charting:
In technical analysis, the use of charts and graphs to plot price trends, average movements of price volume, and open interest. See Technical Analysis.

Churning:
1) Excessive trading of a customer’s account by a broker, who has control over the trading decisions for the account, in order to make more commissions while disregarding the best interest of the customer. This violates NASD, CFTC and NFA rules. 2) In the stock market, it refers to a period of heavy trading activity but few sustained price trends and little overall movement in stock market indices.

Clearing:
The method by which trades are reviewed for accuracy. After trades are validated, the clearinghouse or association becomes the buyer to each seller and the seller to each buyer. Through this procedure, a clearinghouse keeps records of all trades and resulting positions, ensures performance on those positions, and facilitates daily pass through of profits and losses via a mark-to-market process.

Clearing Member:
A member of a clearinghouse or an association. All trades of a non-clearing member must be settled through a clearing member.

Clearinghouse:
An independent entity or an entity connected with exchanges through which all futures contracts are made, offset or fulfilled through physical delivery or cash settlement.

Close:
The end of the trading session, designated by the exchange, during which all transactions are considered made ‘at the close.’

Coincident Indicator:
A measurable economic factor that varies directly and simultaneously with the business cycle, thus indicating the current state of the economy.

Commission:
The fee a broker charges a customer for completion of a certain duty, such as the buying or selling of futures contracts.

Commodity:
A unit of trade or commerce, services or rights on which futures contracts may be traded. Commodities may include, but are not limited to, agricultural products, financial instruments, foreign currencies, indices and metals.

Commodity Exchange Act:
The Act that provides for federal regulation of futures trading and is the mandate for the Commodity Futures Trading Commission.

Commodity Futures Modernization Act (CFMA):
The Act passed in December 2000 amends the Commodity Exchange Act and legalizes the trading of security futures products, including single stock futures, among other changes in the industry that are ongoing.

Commodity Futures Trading Commission (CFTC):
The U.S. government agency set up by Congress to oversee the futures industry through the Commodity Exchange Act.

Commodity Pool:
A venture in which assets contributed by a number of persons are collected for the purpose of trading futures contracts and/or options on futures. Not the same as a joint account.

Commodity Pool Operator (CPO):
An individual or firm, generally required to be registered with the CFTC, which operates or solicits funds, securities or property for a commodity pool. According to the NFA, registration is required unless: the total gross capital contributions to all pools are less than $200,000 and there are no more than 15 participants in any one pool.

Commodity Trading Advisor (CTA):
An individual or firm that trades for commodity pools and/or individual clients. A CTA may also issue analysis or reports on commodities, advise others on trading in commodity futures, options or leverage contracts.

Common Stock:
A class of securities representing ownership in a company whose value may appreciate or depreciate. Owners of this type of stock may also receive dividends, but only after preferred stockholders receive them. See Preferred Stock.

Consolidation:
A break in trading activity where prices move sideways. Traders often assess their positions during periods of consolidation.

Contract:
A term describing a standardized unit of trading for a commodity.

Contract Month:
The month in which a contract is to be settled, either physically or monetarily, in accordance with the futures contract.

Contract Size:
The quantity of the underlying represented by a futures contract.

Corporate Actions/Events:
Changes in the structure of a corporation or in the price and/or quantity of a stock produced by a corporation. For example, changes in price or quantity of stock may be caused by stock splits, stock consolidation, special dividends and spin offs.

Cover:
To close out a position. See Offset.

Current Delivery (Month):
The futures contract which will expire and must be settled during the current month; also called the Spot Month.

Customer Segregated Funds:
See Segregated Account.