The principle under which all futures positions owned or controlled by one person/entity on behalf of a group of people (e.g. farmers) acting in concert.
The principle under which all futures positions owned or controlled by one person/entity on behalf of a group of people (e.g. farmers) acting in concert.
Option buyer can exercise his right at any time on or before the maturity/ expiry date of the contract.
Option buyer can exercise his right at any time on or before the maturity/ expiry date of the contract.
Refers to any market structure in which the identity of the parties placing bids and asks is not disclosed, making it more difficult for one trader to effectively discriminate against another. An order book generally uses anonymous bidding.
Refers to any market structure in which the identity of the parties placing bids and asks is not disclosed, making it more difficult for one trader to effectively discriminate against another. An order book generally uses anonymous bidding.
Any warehouse which has been officially approved by the exchange and from which actual deliveries of commodities can be made on the expiration of a futures contract.
Any warehouse which has been officially approved by the exchange and from which actual deliveries of commodities can be made on the expiration of a futures contract.
A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets to benefit from a discrepancy in their price relation. In a theoretically efficient market, there is a lack of opportunity for profitable arbitrage.
A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets to benefit from a discrepancy in their price relation. In a theoretically efficient market, there is a lack of opportunity for profitable arbitrage.
The settling of disputes between parties that is less structured than court proceedings.
The settling of disputes between parties that is less structured than court proceedings.
An exotic option whose payoff depends on the average price of the underlying asset during some portion of the life of the option.
An exotic option whose payoff depends on the average price of the underlying asset during some portion of the life of the option.
An offer to sell a specific quantity of a commodity at a stated price or the price that the market participants are willing to pay.
An offer to sell a specific quantity of a commodity at a stated price or the price that the market participants are willing to pay.
An option which leads to zero cash flow, if exercised immediately, is called “at-the-money” option.
An option which leads to zero cash flow, if exercised immediately, is called “at-the-money” option.
The department in a financial institution that processes and handles delivery, settlement, and regulatory procedures.
The department in a financial institution that processes and handles delivery, settlement, and regulatory procedures.
If the price of the far-month futures contract is lower than the near-month futures contract, the market condition is referred to as an inverted market or backwardation market.
If the price of the far-month futures contract is lower than the near-month futures contract, the market condition is referred to as an inverted market or backwardation market.
A graph of prices, volume, and open interest for a specified time used by the chartist to forecast market trends. For example, a daily bar chart plots each trading session's open, high, low, and settlement prices.
A graph of prices, volume, and open interest for a specified time used by the chartist to forecast market trends. For example, a daily bar chart plots each trading session's open, high, low, and settlement prices.
Copper, aluminum, lead, nickel, and tin. These metals are common inexpensive metals (as opposed to precious metals like gold and silver) and are defined as base metals because they oxidize or corrode relatively easily.
Copper, aluminum, lead, nickel, and tin. These metals are common inexpensive metals (as opposed to precious metals like gold and silver) and are defined as base metals because they oxidize or corrode relatively easily.
Basis is the difference between the spot price of the underlying asset and the price of a futures contract (primarily employed for hedging). Mathematically, this can be simply put as Basis = Spot Price - Futures Price
Basis is the difference between the spot price of the underlying asset and the price of a futures contract (primarily employed for hedging). Mathematically, this can be simply put as Basis = Spot Price - Futures Price
The risk associated with an unexpected widening or narrowing of the basis between the time a hedge position is established and the time that it is settled. Basis continuously keeps changing due to the changing price of the underlying asset as well as futures prices. This change in basis lead to basis risk, when the futures contract price doesn’t not move in line with that of the underlying spot price. In other words, basis risk is the risk that the cash futures spread widens or narrows between the times at which a hedge position is undertaken and settled, ultimately altering the hedging efficiency.
The risk associated with an unexpected widening or narrowing of the basis between the time a hedge position is established and the time that it is settled. Basis continuously keeps changing due to the changing price of the underlying asset as well as futures prices. This change in basis lead to basis risk, when the futures contract price doesn’t not move in line with that of the underlying spot price. In other words, basis risk is the risk that the cash futures spread widens or narrows between the times at which a hedge position is undertaken and settled, ultimately altering the hedging efficiency.
One who expects a decline in prices.
One who expects a decline in prices.
The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a decline in prices but at the same time limiting the potential loss if this expectation does not materialize. This may be accomplished by selling a nearby delivery and buying a deferred delivery.
The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a decline in prices but at the same time limiting the potential loss if this expectation does not materialize. This may be accomplished by selling a nearby delivery and buying a deferred delivery.
An exotic option which can be exercised on a specified set of predetermined dates during the life of the option.
An exotic option which can be exercised on a specified set of predetermined dates during the life of the option.
An offer by the market participants to buy a specific quantity of a commodity at a stated price or the price that they are willing to pay.
An offer by the market participants to buy a specific quantity of a commodity at a stated price or the price that they are willing to pay.
The difference between the bid price of the buyer and offer price of the seller.
The difference between the bid price of the buyer and offer price of the seller.
An option pricing model initially developed by Fischer Black and Myron Scholes for securities options and later refined by Black for options on futures.
An option pricing model initially developed by Fischer Black and Myron Scholes for securities options and later refined by Black for options on futures.
A brokerage firm that 'books' retail customer orders without actually having them executed on a regulated exchange.
A brokerage firm that 'books' retail customer orders without actually having them executed on a regulated exchange.
Bucketing occurs when a broker confirms an order to a client without actually executing it to make short-term profits. A brokerage firm which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.
Bucketing occurs when a broker confirms an order to a client without actually executing it to make short-term profits. A brokerage firm which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.
One who expects prices to rise.
One who expects prices to rise.
The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a rise in prices but at the same time limiting the potential loss if this expectation is wrong. This may be accomplished by buying the nearby delivery and selling the deferred.
The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a rise in prices but at the same time limiting the potential loss if this expectation is wrong. This may be accomplished by buying the nearby delivery and selling the deferred.
Bars or ingots of precious metals, usually cast in standardized sizes.
Bars or ingots of precious metals, usually cast in standardized sizes.
A market participant who takes a long futures position or buys an option. An option buyer is also called a taker, holder, or owner.
A market participant who takes a long futures position or buys an option. An option buyer is also called a taker, holder, or owner.
A condition of the market in which there is an abundance of goods available, and hence, buyers can afford to be selective and may be able to buy at less than the price that previously prevailed.
A condition of the market in which there is an abundance of goods available, and hence, buyers can afford to be selective and may be able to buy at less than the price that previously prevailed.
Hedging transaction in which futures contracts are bought to protect against possible increases in the cost of commodities.
Hedging transaction in which futures contracts are bought to protect against possible increases in the cost of commodities.
The purchase of one delivery month of a given futures contract and simultaneous sale of a different delivery month of the same futures contract.
The purchase of one delivery month of a given futures contract and simultaneous sale of a different delivery month of the same futures contract.
The physical or actual commodity as distinguished from the futures contract, sometimes called spot commodity or actuals.
The physical or actual commodity as distinguished from the futures contract, sometimes called spot commodity or actuals.
A method of settling futures, options, and other derivatives whereby the seller (or short hedger) pays the buyer (or long hedger) the cash value of the underlying commodity or a cash amount based on the level of an index or price according to the procedure specified in the contract.
A method of settling futures, options, and other derivatives whereby the seller (or short hedger) pays the buyer (or long hedger) the cash value of the underlying commodity or a cash amount based on the level of an index or price according to the procedure specified in the contract.
The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average price movements, trading volumes, and open interest.
The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average price movements, trading volumes, and open interest.
Technical trader who reacts to signals derived from graphs of price movements.
Technical trader who reacts to signals derived from graphs of price movements.
The procedure through which the clearing organization becomes the buyer to each seller of a futures contract or other derivative, and the seller to each buyer for clearing members.
The procedure through which the clearing organization becomes the buyer to each seller of a futures contract or other derivative, and the seller to each buyer for clearing members.
An entity through which futures and other derivative transactions are cleared and settled. It is also charged with assuring the proper conduct of each contract's delivery procedures and the adequate financing of trading. A clearing organization may be a division of a particular exchange, an adjunct or affiliate thereof, or a freestanding entity.
An entity through which futures and other derivative transactions are cleared and settled. It is also charged with assuring the proper conduct of each contract's delivery procedures and the adequate financing of trading. A clearing organization may be a division of a particular exchange, an adjunct or affiliate thereof, or a freestanding entity.
A member of a clearing house. All trades of a non-clearing member must be processed and eventually settled through a clearing member.
A member of a clearing house. All trades of a non-clearing member must be processed and eventually settled through a clearing member.
The placement of servers used by market participants in close physical proximity to an electronic trading facility's matching engine in order to facilitate high-frequency trading.
The placement of servers used by market participants in close physical proximity to an electronic trading facility's matching engine in order to facilitate high-frequency trading.
Commodity is any good having commercial value, which can be produced, bought, sold, and consumed. In other words, commodity is a good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. Notably, when they are traded on an exchange, commodities must also meet specified minimum standards, sometime known as the basis grade.
Commodity is any good having commercial value, which can be produced, bought, sold, and consumed. In other words, commodity is a good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. Notably, when they are traded on an exchange, commodities must also meet specified minimum standards, sometime known as the basis grade.
A commodity exchange is a platform for entering into an agreement for buying and selling standardized commodity futures and options contracts. It acts as a transparent marketplace where large number of buyers and sellers participate. Contracts are standardized or pre-defined for variety, quantity, and quality of a commodity. Identities of participants are not disclosed.
A commodity exchange is a platform for entering into an agreement for buying and selling standardized commodity futures and options contracts. It acts as a transparent marketplace where large number of buyers and sellers participate. Contracts are standardized or pre-defined for variety, quantity, and quality of a commodity. Identities of participants are not disclosed.
An index of a specified set of (physical) commodity prices or commodity futures prices.
An index of a specified set of (physical) commodity prices or commodity futures prices.
An investment fund that enters into futures or commodity swap positions for replicating the return of an index of commodity prices or commodity futures prices.
An investment fund that enters into futures or commodity swap positions for replicating the return of an index of commodity prices or commodity futures prices.
A swap whose cash flows are intended to replicate a commodity index.
A swap whose cash flows are intended to replicate a commodity index.
If the price of the far-month futures contract is higher than the near-month futures contract, the market condition is referred to as normal market or contango market.
If the price of the far-month futures contract is higher than the near-month futures contract, the market condition is referred to as normal market or contango market.
The tendency for prices of physicals and futures to approach one another, usually during the delivery month. Also called a 'narrowing of the basis.
The tendency for prices of physicals and futures to approach one another, usually during the delivery month. Also called a 'narrowing of the basis.
The cost of storing a physical commodity or holding a financial instrument over a period. These charges include insurance, storage, and interest on the deposited funds, as well as other incidental costs. It is a carrying-charge market when there is a higher futures price for each successive contract maturity. If the carrying charge is adequate to reimburse the holder, it is called a 'full charge'.
The cost of storing a physical commodity or holding a financial instrument over a period. These charges include insurance, storage, and interest on the deposited funds, as well as other incidental costs. It is a carrying-charge market when there is a higher futures price for each successive contract maturity. If the carrying charge is adequate to reimburse the holder, it is called a 'full charge'.
The risk associated with the financial stability of the party with whom one has entered into a contract. The risk is that the counterparty may not live up to its contractual obligation. Forward contracts impose upon each party the risk that the counterparty will default, but futures contracts executed on a designated exchange are guaranteed against default by the clearing house.
The risk associated with the financial stability of the party with whom one has entered into a contract. The risk is that the counterparty may not live up to its contractual obligation. Forward contracts impose upon each party the risk that the counterparty will default, but futures contracts executed on a designated exchange are guaranteed against default by the clearing house.
The period from one harvest to the next, varying according to the commodity (for example, October 1 to September 30 for edible oils and oilseeds).
The period from one harvest to the next, varying according to the commodity (for example, October 1 to September 30 for edible oils and oilseeds).
Hedging a cash market position in a futures or option contract for a different but price-related commodity.
Hedging a cash market position in a futures or option contract for a different but price-related commodity.
A procedure for margining related securities, options, and futures contracts jointly when different clearing organizations clear each side of the position.
A procedure for margining related securities, options, and futures contracts jointly when different clearing organizations clear each side of the position.
The maximum price advance or decline from the previous day's settlement price permitted during one trading session, as fixed by the rules of an exchange.
The maximum price advance or decline from the previous day's settlement price permitted during one trading session, as fixed by the rules of an exchange.
The daily price at which the clearing organization clears all trades and settles all accounts between clearing members of each contract month.
The daily price at which the clearing organization clears all trades and settles all accounts between clearing members of each contract month.
Those grades of a commodity that have been officially approved by an exchange as deliverable in settlement of a futures contract.
Those grades of a commodity that have been officially approved by an exchange as deliverable in settlement of a futures contract.
The date on which the commodity or instrument of delivery must be delivered to fulfil the terms of a contract.
The date on which the commodity or instrument of delivery must be delivered to fulfil the terms of a contract.
A derivative is an instrument whose price is dependent upon or derived from one or more underlying entity. In other words, the derivative instrument is a contract between two or more parties, whose value is determined by fluctuations in the underlying entity. The most common underlying entities are stocks, bonds, commodities, currencies, interest rates, indexes, and such others. Generally, derivatives are characterized by high leverage.
A derivative is an instrument whose price is dependent upon or derived from one or more underlying entity. In other words, the derivative instrument is a contract between two or more parties, whose value is determined by fluctuations in the underlying entity. The most common underlying entities are stocks, bonds, commodities, currencies, interest rates, indexes, and such others. Generally, derivatives are characterized by high leverage.
A brokerage firm that 'books' retail customer orders without actually having them executed on a regulated exchange.
A brokerage firm that 'books' retail customer orders without actually having them executed on a regulated exchange.
Option buyer can exercise his right only on the maturity/ expiry date of the contract.
Option buyer can exercise his right only on the maturity/ expiry date of the contract.
A transaction in which the buyer of a cash commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way, the opposite hedges in futures of both parties are closed out simultaneously.
A transaction in which the buyer of a cash commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way, the opposite hedges in futures of both parties are closed out simultaneously.
An investment vehicle holding a commodity or other asset that issues shares that are traded like a stock on a securities exchange.
An investment vehicle holding a commodity or other asset that issues shares that are traded like a stock on a securities exchange.
The date on which a futures or option contract automatically expires; the last day an option may be exercised.
The date on which a futures or option contract automatically expires; the last day an option may be exercised.
A forward contract is an agreement between two parties to buy or sell an asset at a future date for a price agreed upon. A forward contract is generally traded in an OTC market. The terms and conditions of forward contracts are customized, based on negotiations between the counter parties. It is the oldest form of a derivative contract.
A forward contract is an agreement between two parties to buy or sell an asset at a future date for a price agreed upon. A forward contract is generally traded in an OTC market. The terms and conditions of forward contracts are customized, based on negotiations between the counter parties. It is the oldest form of a derivative contract.
Taking a futures or option position based upon non-public information regarding an impending transaction by another person in the same or related future or option. This is barred by law in most countries.
Taking a futures or option position based upon non-public information regarding an impending transaction by another person in the same or related future or option. This is barred by law in most countries.
Study of basic, underlying factors that would affect the supply and demand of the commodity being traded in the futures contract.
Study of basic, underlying factors that would affect the supply and demand of the commodity being traded in the futures contract.
A futures contract is an agreement between two parties to buy or sell an asset of a specified and standardized quantity and quality at a certain time in the future for a price agreed upon at the time of entering into the contract on the futures exchange.
A futures contract is an agreement between two parties to buy or sell an asset of a specified and standardized quantity and quality at a certain time in the future for a price agreed upon at the time of entering into the contract on the futures exchange.
The number of ounces of silver required to buy one ounce of gold at current spot prices.
The number of ounces of silver required to buy one ounce of gold at current spot prices.
In computing the value of assets for capital, segregation, or margin requirements, a percentage reduction from the stated value (that is, book value or market value) for possible declines in value that may occur before assets can be liquidated.
In computing the value of assets for capital, segregation, or margin requirements, a percentage reduction from the stated value (that is, book value or market value) for possible declines in value that may occur before assets can be liquidated.
Ratio of the value of futures contracts purchased or sold to the value of the cash commodity being hedged, a computation necessary to minimize basis risk.
Ratio of the value of futures contracts purchased or sold to the value of the cash commodity being hedged, a computation necessary to minimize basis risk.
A statistical measure of the volatility (specifically, the annualized standard deviation) of a futures contract, security, or other instrument over a specified number of past trading days.
A statistical measure of the volatility (specifically, the annualized standard deviation) of a futures contract, security, or other instrument over a specified number of past trading days.
Customers' funds put up as security for a guarantee of contract fulfilment at the time a futures market position is established.
Customers' funds put up as security for a guarantee of contract fulfilment at the time a futures market position is established.
A spread in which the long and short legs are in two different but generally related commodity markets. Also called an intermarket spread.
A spread in which the long and short legs are in two different but generally related commodity markets. Also called an intermarket spread.
An option which leads to positive cash flow, if exercised immediately after taking the position, is called an “In-the-money” option.
An option which leads to positive cash flow, if exercised immediately after taking the position, is called an “In-the-money” option.
Lot size is the number of units of underlying in a contract.
Lot size is the number of units of underlying in a contract.
Part of the daily cash flow system used by futures exchanges to maintain a minimum margin equity for a given futures or option contract position by calculating the gain or loss in each contract position resulting from changes in the price of the futures or option contracts at the end of each trading session. These amounts are added or subtracted to each account balance.
Part of the daily cash flow system used by futures exchanges to maintain a minimum margin equity for a given futures or option contract position by calculating the gain or loss in each contract position resulting from changes in the price of the futures or option contracts at the end of each trading session. These amounts are added or subtracted to each account balance.
Day on which the option may be exercised.
Day on which the option may be exercised.
Moneyness is a term describing the relationship between the strike price of an option and the current trading price of its underlying. In options trading, terms such as in-the-money, out-of-the-money and at-the-money describe the moneyness of options.
Moneyness is a term describing the relationship between the strike price of an option and the current trading price of its underlying. In options trading, terms such as in-the-money, out-of-the-money and at-the-money describe the moneyness of options.
The spot or nearby delivery month, the nearest traded contract month.
The spot or nearby delivery month, the nearest traded contract month.
Novation takes place when a central clearing corporation interposes itself between the buyer and seller as a legal counterparty. The clearing corporation becomes the buyer to every seller and a seller to every buyer, thereby guaranteeing the performance of contracts.
Novation takes place when a central clearing corporation interposes itself between the buyer and seller as a legal counterparty. The clearing corporation becomes the buyer to every seller and a seller to every buyer, thereby guaranteeing the performance of contracts.
The total number of futures contracts (long or short) in a delivery month, or a market that has been entered into and not yet liquidated by an offsetting transaction or fulfilled delivery. Also called open contracts or open commitments.
The total number of futures contracts (long or short) in a delivery month, or a market that has been entered into and not yet liquidated by an offsetting transaction or fulfilled delivery. Also called open contracts or open commitments.
An option is a financial derivative contract that gives its owner the right but not the obligation to buy or sell an underlying asset for a specific price at a specific time in the future. Options are of two types, call option and put option. A call option gives the holder the right, but not the obligation, to buy the underlying asset by a certain date for a certain price. On the other hand, a put option gives the holder the right, but not the obligation, to sell the underlying asset by a certain date for a certain price.
An option is a financial derivative contract that gives its owner the right but not the obligation to buy or sell an underlying asset for a specific price at a specific time in the future. Options are of two types, call option and put option. A call option gives the holder the right, but not the obligation, to buy the underlying asset by a certain date for a certain price. On the other hand, a put option gives the holder the right, but not the obligation, to sell the underlying asset by a certain date for a certain price.
It is the price which the option buyer pays to the option seller.
It is the price which the option buyer pays to the option seller.
The Over the Counter, or OTC, market is a one-to-one bilateral market where two parties, a seller and a buyer, come to an agreement for delivery of goods or the underlying asset on a specific date in future at a price agreed upon. Unlike an exchange-traded standardized contract, an OTC contract is customized or agreed upon between the parties and holds good till the expiry date of the contract.
The Over the Counter, or OTC, market is a one-to-one bilateral market where two parties, a seller and a buyer, come to an agreement for delivery of goods or the underlying asset on a specific date in future at a price agreed upon. Unlike an exchange-traded standardized contract, an OTC contract is customized or agreed upon between the parties and holds good till the expiry date of the contract.
An option resulting in negative cash flow, if exercised immediately, is called “out-of-the-money” option.
An option resulting in negative cash flow, if exercised immediately, is called “out-of-the-money” option.
Premium is the price which the option buyer pays to the option seller.
Premium is the price which the option buyer pays to the option seller.
The process of determining the price for a commodity through the interaction of buyers and sellers and based on supply and demand conditions.
The process of determining the price for a commodity through the interaction of buyers and sellers and based on supply and demand conditions.
The act of fulfilling the delivery requirements of the futures contract.
The act of fulfilling the delivery requirements of the futures contract.
Selling futures contracts to protect against possible decrease in prices of commodities.
Selling futures contracts to protect against possible decrease in prices of commodities.
Selling a futures contract or other instrument for delivering on the price or offsetting the price at a later date.
Selling a futures contract or other instrument for delivering on the price or offsetting the price at a later date.
As developed by the Chicago Mercantile Exchange, the industry standard for calculating performance bond requirements (margins) based on the overall portfolio risk. SPAN calculates risk for all enterprises on derivative and non-derivative instruments at numerous exchanges and clearing organizations worldwide.
As developed by the Chicago Mercantile Exchange, the industry standard for calculating performance bond requirements (margins) based on the overall portfolio risk. SPAN calculates risk for all enterprises on derivative and non-derivative instruments at numerous exchanges and clearing organizations worldwide.
The price in the marketplace for actual cash or spot commodities to be delivered through customary market channels.
The price in the marketplace for actual cash or spot commodities to be delivered through customary market channels.
The purchase of one futures delivery month against the sale of another futures delivery month of the same commodity to take advantage of a profit from a change in price relations. The term spread is also used to refer to the difference between the price of a futures month and the price of another month of the same commodity. A spread can also apply to options.
The purchase of one futures delivery month against the sale of another futures delivery month of the same commodity to take advantage of a profit from a change in price relations. The term spread is also used to refer to the difference between the price of a futures month and the price of another month of the same commodity. A spread can also apply to options.
A market situation in which the lack of supplies tends to force shorts to cover their positions by offsetting at higher prices.
A market situation in which the lack of supplies tends to force shorts to cover their positions by offsetting at higher prices.
Refers to 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.
Refers to 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.
The number of contracts traded during a specified period. It is most commonly quoted as the number of contracts traded, but for some physical commodities may be quoted as the total of physical units, such as bales or tonnes.
The number of contracts traded during a specified period. It is most commonly quoted as the number of contracts traded, but for some physical commodities may be quoted as the total of physical units, such as bales or tonnes.
A document certifying the possession of a commodity in a licensed warehouse that is recognized for delivery by an exchange.
A document certifying the possession of a commodity in a licensed warehouse that is recognized for delivery by an exchange.
Entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position. This practice is barred by law in most countries.
Entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position. This practice is barred by law in most countries.