Q: What are some of the most common terms when discussing Commodity Products?
United States Department of Agriculture
Chicago Board of Trade (CBOT)
Trading platform where many commodities are bought & sold. Now known as the CME Group.
Chicago Mercantile Exchange and CBOT merged to create the CME Group. The largest trading platform globally.
A premium or discount to the futures market
Current futures price.
A trader who thinks the market will trend lower
A term used to identify selling a commodity or derivative
A term used to identify buying a commodity or derivative
Current futures trading month
Any trading month beyond the front month
A legally binding agreement to buy or sell a commodity or financial instrument at a later date pursuant to the Rules of the Exchange
A private, cash-market agreement between a buyer and seller for the future delivery of a commodity at an agreed price. In contrast to futures contracts, forward contracts are not standardized and not transferable.
Last year’s ending stocks of a storable commodity
When the market makes a full about-face moving by 10% or greater
When the market makes an about-face, but not as strong as a correction
Centum Weight or 100 weight
A term used mostly in energy trading referring to inverted futures where prices currently are higher than in deferred months.
Refers to buying
Refers to selling