bear : A market trending downward, or a person who expects prices to go lower.

bid : A bid, subject to immediate acceptance, made on the floor of exchange to buy a definite number of futures contracts at a specified price.

bull : A market trending upward; on a person who expects prices to go higher.

call : An option that gives the buyer the right to a long position in the underlying futures at a specific price; the call writer (seller) may be assigned a short position in the underlying futures if the buyer exercises the call.

cash commodity : The actual physical product on which a futures contract is based. This product can include agricultural commodities, financial instruments and the cash equivalents of index futures.

close : The period at the end of the trading session officially designated by the exchange during which all transactions are considered made "at the close."

delivery month : Specified month within which delivery may be made under the terms of a futures contract.

financial futures : Futures contracts based on interest-rate instruments (T-bonds. T-bills, etc.), foreign currencies and indexes.

futures contract : A term used to designate any or all contracts covering the sale of commodities (including financial instruments and cash representing indexes) for future delivery made on an exchange and subject to its rules.

hedge : A sale of futures contracts to offset the ownership or purchase of the underlying cash commodity in order to protect it against adverse price moves; or, conversely, a purchase of futures contracts to offset the sale of the underlying cash commodity, again for protection against adverse price moves.

in-the-money : In call options, when the strike price is below the price of the underlying futures. In put options, when the strike price is above the price of the underlying futures. In-the-money options are the most expensive options because the premium includes in-trinsic value.

limit order : An order given to a broker by a customer which has some restrictions upon its execution. such as price or time.

long : (1) The buying side of an open futures contract or futures option; (2) a trader whose net position in the futures or options market shows an excess of open purchases over open sales.

margin : Cash or equivalent posted as guarantee of fulfillment of a futures contract (not a down-payment).

margin call : Demand for additional funds or equivalent because of adverse price movements or some other contingency.

offer : An offer, indicating willingness to sell at a given price (opposite of bid).

open contracts : Contracts which have been bought or sold without the transaction having been completed by subsequent sale, repurchase, or actual delivery or receipt of commodity

open interest : The number of "open contracts." It refers to un-liquidated purchases or sales and never to their combined total.

pit : An octagonal platform on the trading floor of an exchange, consisting of steps upon which traders and brokers stand while trading (If circular. called a "ring").

put : In options. the buyer of a put has the right to acquire a short position in the underlying futures contract at the strike price until the option expires; the seller (writer) of the put obligates himself to take a long position in the futures at the strike price if the buyer exercises his put.

settlement price : The official daily closing price of a futures contract, set by the exchange for the purpose of settling margin accounts.

striking price : In options, the price at which a futures position will be established if the buyer exercises (also called strike or exercise price).

(commodities Glossary.doc)