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To enable you to easily understand important terms, frequently used in derivatives trading, we have a few phrases listed below. Click on any of them to get an explanation:

Anticipatory Hedge

A trader expects to make a spot transaction at a future date and opens a futures position now to protect against a change in the spot price.


The simultaneous purchase of one asset against the sale of the same or equivalent asset in two different markets to create a riskless profit due to price discrepancies.

Arbitrage band

The band around the no-arbitrage price within which arbitrage transactions are not worthwhile.

Arbitrage Channel

See arbitrage band.

Arbitrage risk

While the arbitrage transaction is riskless in theory, in practice, some risks may be present.

Ask price

The price at which the market maker is willing to sell. Also called the offer price.

Back Contract

See deferred contract.


This occurs when the spot price exceeds the current price of a futures contract. The opposite of contango.


The difference between the cash price of a financial instrument and the price of a particular futures contract relating to that instrument. Also known as a crude basis or simple basis.

Basic risk

The possibility that the value of the basis will change over time.

Basic risk

A market in which prices are falling.

Bear spread

A calendar spread designed to profit in a bear market.


A measure of responsiveness of a security or portfolio to movements in the stock market as a whole. Measures systematic risk.

Bid-ask bounce

In the absence of new information, the transaction prices for a security will fluctuate between the bid and the ask price, depending on whether the trade was initiated by a buyer or a seller.

Bid-ask spread

The difference between the ask price and bid price.

Bid price

The price at which a market maker is willing to buy.


A person who acts as an agent for others in buying and selling futures contracts in return for a commission.

Bull market

A market in which prices are rising.

Bull spread

A calendar spread designed to profit from a bull market.


A passive strategy in which a trader buys a security (or portfolio), which is then held for a period of time without revision.

Buying in

See liquidation.

Calendar spread

The simultaneous purchase and sale of futures contracts for different delivery months of the same financial instrument. Also called an intracommodity spread, a horizontal spread or a time spread.


Capital Assets Pricing Model. The equilibrium expected return on an asset depends on the riskless interest rate, the expected return on the market and the asset’s beta (B) value.

Carrying costs

See carrying charges.

Carrying charges

The total cost of carrying an asset forwards in time, including storage, insurance and financing costs.

Cascade theory

The stock market crash of October 1987 was caused by a fall in stock market price, which led portfolio insurers to sell index futures, resulting in a drop in their price, and, via index arbitrage, a further fall in stock market prices, etc.

Cascade theory

An arbitrage transaction where the trader holds a long position in the underlying asset and a short position in the corresponding futures contract.

Cash market

In commodities markets this term is used to refer to the market in a particular grade and location of the underlying asset. For index futures there is only one underlying grade and location, and so the cash market is synonymous with the spot market.

Cash price

See spot price.

Cash settlement

At delivery time, instead of the physical transfer of the underlying asset, there is a final marking to the market at the EDSP and the positions are closed out.


Commodity Futures Trading Commission. An independent US federal agency which has regulated futures trading in the United States since 21st April 1975.


See Underpriced.

Circuit breaker

A trading halt when the price movement exceeds some present limit.

Clearing house

An organisation connected with futures exchange through which all contracts are reconciled, settled, guaranteed and later either offset or fulfilled through delivery or cash settlement. Its function is to manage the margin and delivery systems, as well as to guarantee performance of exchange traded contracts.

Clearing member

A member of the clearing house.


The time period at the end of the trading session during which that day’s settlement price is determined.

Close out

See liquidation.

Closing Price

The last price of the trading period for a security.


A fee charged by a broker to a customer when a position is liquidated. See round trip.

Commodity pool

See future fund.

Commodity pool operator

The firm managing a commodity pool. This terminology is common in the U.S.

Commodity trading adviser 

Professional traders who conduct individually managed accounts on behalf of investors. This terminology is common in the U.S.

Composite hedge

A single spot position is hedged using a number of different futures.

Compulsory Close-Out

A customer’s open positions in futures contracts are sqaured-up by the member firm holding the account or the Clearing House, usually after the customer fails to meet margin calls. Also see Forced liquidation.

Condor spread

A bull (bear) calendar spread in two different maturities is matched by a bear (bull) calendar spread in another two maturities. This requires there to be at least four outstanding maturities.


Mistakes in setting prices in one market are transmitted to another.


This exists when the spot price is less than the current price of a futures contract. The opposite of backwardation.

Continuous compounding

Interest is accurued continuously rather than at discrete intervals. The interest is assumed to be added to the capital sum and so interest is then also payable on the interest received.


The standard unit of trading for futures markets.

Contract month

See delivery month.

Contract multiplier

The monetary value that is multiplied by the index value to determine the market value of the futures contract.

Contract specification

The standard terms of the futures contract to be traded.e g. size of the contract, tick size, settlement and margining methodology, trading times, delivery procedures.


The movement to equality of the spot and futures prices as the delivery date approaches.


A few people gain control of all available supplies of the underlying asset.

Cost of carry

The cost of holding a stock of the underlying e g the costs of storing, insuring and financing the asset.

Cost of carry price

The futures prices given by the cost of carrying an equivalent spot position until delivery.


The other party (buyer or seller ) to a transaction.

Counterparty risk

The risk the counterparty will not fulfil the terms of the contract. Also called default risk.


See liquidation.

Cross hedge

Hedging a risk is one asset by initiating a position in a different but related asset.


A situation where the broker acts for both the buyer and seller. All cross trades must be transacted on the trading floor, or through the screen market. This is currently not allowed by SEBI in India.


The group of people standing in the futures pit.

Crude basis

See basis.

Cum dividend

A share is cum dividend when the purchaser receives the next dividend payment.

Day order

An order to trade futures contracts that automatically expires at the end of that day’s trading session.

Day trades

Trades that are opened and closed on the same day.

Default risk

The risk that the counterparty will fail to meet their obligations under a contract.

Deferred contract

Futures contracts other than the near contract.


The transfer of ownership of an actual financial instrument, or final cash payment inlieu thereof, in settlement of a futures contract under the specific terms and procedures established by the exchange. Also see settlement.

Delivery day

The day on which the futures contract matures. Also known as expiry day.

Delivery month

The calendar month on which the futures contract matures, resulting in delivery or cash settlement of the specified financial instrument. Also known as expiration month.

Delivery price

The price fixed by the clearing house at which deliveries on futures contracts are invoiced. Also known as the expiry price or the settlement price.


A financial instrument designed to replicate an underlying security for the purpose of transferring risk.

Discrete compounding

Interest payments are made periodically. The interest is assumed to be added to the capital sum and so interest is then payable on the interest received.

Double auction market

This occurs when the price is determined by competitive bidding between both buyer and sellers, as in futures markets.

Dual capacity

A floor trader is allowed to trade on his or her own behalf, as well as an agent for others.

Dual listing

Futures contracts on the same underlying asset are traded on more than one exchange.

Dynamic hedge

An investment strategy in which a long position in shares is hedged by selling futures. The futures position is adjusted frequently so that it replicates a purchased put option.

Efficient frontier

Feasible combinations of expected profit and risk which, for each level of risk, have maximum profit.

Eligible margin

The cash or other collateral which may be accepted as cover for margin obligations.


Exchange Delivery Settlement Price. This is the price at which the delivery or cash settlement takes place, expressed in index points. This terminology is common in the U.S.

Equity swap

A contract between two parties by which they swap the returns from an equity portfolio and an investment at a fixed or variable interest rate.

Excess return

The return on a security beyond that which could have been earned on riskless asset.


A share is ex-dividend when the purchaser does not receive the next dividend payment.

Execution risk

The risk that prices may move between the time an order is initiated and executed.


The date that any futures contract (or option) ceases to exist.

Expiration month

See delivery month.


Fair value

The no-arbitrage price of a futures contract. Also known as theoretical value.

Fair value range

See arbitrage band.

Far contract

The future that is furthest from its delivery month i. e. has the longest maturity.

Fill or kill order

An order to trade futures contracts which must be executed immediately. If not it is cancelled.

Financial engineering

The process of designing new financial instruments, especially derivative securities.

Float capitalisation

The value of that portion of the firm’s equity that is available for trading, and so excludes shares in the hands of controlling investors.

Floor trader

A person on the floor of an exchange who executes orders in the open outcry system.

Forced liquidation

A customer’s open positions in futures contracts are offset by the brokerage firm holding the account, usually after the customer fails to meet margin calls. Also called compulsory close-out.

Forward contract

An agreement between two parties to trade an asset at a specified future date and price. This is an OTC product.

Forward months

Futures contracts other than the near contract.

Front month

See near contract.


Front running

Brokers trade on their own behalf, ahead of their customers order’s. This was only banned in Japan in December 1992.

Fundamental Analysis

The application of economic analysis to publicly available information to predict price movements.

Futures contract

A legal, transferable standardised contract that represents an agreement to buy or sell a quantity of a standardised asset at a predetermined delivery date. This is an exchange traded product.

Futures fund

They raise money from investors and pool this capital into a fund which is invested in futures contracts. A popular form is a 90/10 fund.

Futures and options fund

U K unit trusts that can invest up to 10 percent of their funds in futures and options.

Futures option

An option written on a futures contract.

Geared futures and options fund

U K unit trusts that can invest up to 20 percent of their funds in futures and options and have the potential to lose all the money in the fund.

Generalised hedge

A number of different spot positions are hedged using a variety of different futures.


A spread between a spot asset and a futures position that reduces risk.

Hedge portfolio

The portfolio of shares whose risk is being hedged away.

Hedge ratio

The number of futures contracts bought or sold divided by the number of spot contracts whose risk is being hedged.


The purchase or sale of futures contracts to offset possible changes in the value of assets or cost of liabilities currently held, or expected to be held at some future date.

Holding period

The time period over which an investment is held.

Horizontal spread

See calendar spread.

Implementation risk

The risk that new information may arrive after an investors has decided to trade and before the order is submitted.

Implied volatility

The variance of returns on an asset that is implied by equating the observed and theoretical prices of an option on that asset.

Index fund

An institutional investment portfolio that aims to replicate the performance of a chosen market index.

Index option

An option written on a stock index.

Index participation

The trading of baskets of shares corresponding to those in some specified market index. The buyer of the index participation pays immediately in exchange for a promise by the seller to deliver the shares (or their cash equivalent) at one of a number of subsequent dates, chosen by the buyer. Also know as an Exchange Traded Fund (ETF).

Infrequent trading

If trading is not continuous it is infrequent, infrequent trading may be either non-synchronous trading or non-trading.

Initial Margin

The ‘good faith’ deposit of the cash or securities which a user of futures market must make with his or her broker when purchasing or selling futures contracts, as a guarantee of contract fulfilment.

Inside information

Private and confidential information, usually acquired through a position of trust, that is likely to have an impact on security prices when made public.

Insider trading

Dealing on the basis of inside information.

Intercommodity spread

The simultaneous purchase and sale of futures contracts in different financial instruments.

Interdelivery spread

See calendar spread.

Intermarket spread

A spread involving futures contracts traded on different exchanges.

Intermonth spread

See calendar spread.

Intracommodity spread

See calendar spread.

Intramarket spread

A spread involving future contracts traded on the same exchange.

Invertmarket spread

A market in which the price of a stock index futures is higher the closer is the contract to delivery.

Kerb trading

Unofficial trading when the market has closed.


One of the two positions constituting a spread.

Leverage effect

When the price of a share rises and the value of the firm’s outstanding debt is fixed, the ratio of debt to equity falls, i.e. its leverage (or gearing) falls. This makes return on the share less risky. A reverse argument applies for price falls.

Lifting a leg

Liquidating one side of a spread or arbitrage position prior to liquidating the other side. Also called ‘legging out’.

Limit down

This occurs when the futures price has moved down to the lower price limit.

Limit move

The price has increased or decreased by the maximum amount permitted by the price limits.

Limit order

An order to buy or sell at a specific price (or better), to be executed when and if the market price reaches the specified price.

Limit order book

A list of the outstanding limit orders.

Limit price

See price limit.

Limit up

This occurs when the price has moved up to the upper price limit.


Any transaction that offsets or closes out a previously established long or short position; also known as buying in or covering.


The degree to which a market can accommodate a large volume of business without moving the price, i.e. market impact.


A floor trader who executes trades on his or her own account in the open outcry system.


A market position established by buying one or more futures contracts not yet close out through an offsetting sale; the opposite of shot.

Long hedge

A hedge involving a long futures position and a short spot position.

Long the basic

The purchase of the underlying asset and sale of contracts in the corresponding futures contract.


See contract.

Macro hedging

A firm hedges the combined exposure of all its assets and liabilities. See also micro hedging.

Maintenance margin

The minimum amount which a person is required to keep in their margin account.


A deposit of funds to provide collateral for an investment position. See also initial margin, variation margin and maintenance margin.

Margin call

A request for the payment of additional funds into a person’s margin account.

Market capitalisation

This is calculated by multiplying the number of a company’s shares issued by the share price.

Market efficiency

The degree to which current prices reflect a set of information.

Market-if-touched order

An order to buy futures contracts which becomes a market order if the market reaches a specified price below the current price, or to sell if the market price reaches a specific level above the current price. Opposite of a s order.

Market impact

See liquidity.

Market maker

A dealer who makes firm bids and offers at which he or she will trade.

Market-on-close order

An order to buy or sell at a price as close as possible to the closing price for that day.


A market order to be executed during the opening.

Market order

An order to buy or sell for immediate execution at the best obtainable price.

Market portfolio

A market value weighted portfolio consisting of every share traded on the exchange.

Market risk

The possibility of gain or loss due to movements in the general level of the stock market. Also see systemic risk.

Marking to the market

The daily revaluation of open positions to reflect profits and losses based on closing market prices at the end of the trading day.


The process by which buy and sell transactions are reconciled, before being passed to the clearing house.


The length of time before delivery.

Micro hedging

A firm hedges only specific transactions rather than all its assets and liabilities. See also macro hedging.

Minimum price movement

The smallest possible price change. See also point and tick size.


It usually refers to the actual less the no-arbitrage futures price, and may be deflated by either the spot price or the no-arbitrage futures price. In a few cases the mispricing incorporates transactions costs.

Momentum trader

A trader who sells when the market falls and buys when the market rises. This behaviour tends to amplify price movements. Also known as a positive feedback trader.

Mutual fund

This is a type investment company that sells its shares (called units) to the public and uses the proceeds to invest in other companies.

National futures Association

A self-regulating US body which registers and regulates those employed in the futures brokerage industry.

Naïve hedge ratio

A one-for-one hedge ratio.

Near contract

The future that is nearest to its delivery month i.e. has the shortest maturity.

Net Position

The difference between the long and short open positions in any one future held by an individual or group.

Non – Synchronicity

The stock trades at least once every interval, but not necessarily at the close of each interval. See non-trading.

Non trading

The stock does not trade during every interval. See non-synchronicity.

Normal backwardation

This occurs when the expected price of a futures contract at delivery exceeds the current price of the future.

Normal market

A market in which the price of a stock index futures contract is lower the closer is the contract to delivery.


The legal word for the conversion of a futures contract between a buyer and seller into two separate contracts, each with the clearing house as counterparty.

Odd lot

A quantity of shares that does not correspond to that in which trading normally takes place.

Offer price

See ask price.


See liquidation.

Open interest

The cumulative number of either long or short contracts which have been initiated on an exchange, and have not been offset.

Open outcry

The method trading on many futures exchanges whereby bids and offers are audible to all other participants on the floor of the exchange (or pit) in a competitive public action.

Open positions

Contracts which have been initiated and are not yet offset by a subsequent sale of purchase, or by making or taking delivery.

Original margin

The initial margin required to cover a new futures position.

Out trade

A trade for which there is not a matching record by the two parties. This may be because the price, quantity, maturity, counter party or side (long – short) fail to match.


A view that the market price has risen too strictly in relation to the underline fundamental factors.

Overnight Trade

A trade which is not liquidated on the same day in which it was established.


The actual futures price exceeds the no-arbitrage futures price.


A view that the market price has declined too steeply in relation to the underlying fundamental factors.

Over-the-counter(OTC) market

A market where dealing does not take place at an organised exchange.

Perfect hedge

A hedge where the change in the value of the future contracts is identical to the change in the value of the other asset or liability.

Physical delivery

Settlement of a futures contract by the supply or receipt of the asset underlying the contract.


An octagonal or hexagonal area on the trading floor of an exchange, surrounded by a tier of steps upon which traders and brokers stand while executing futures trades in the open outcry system.


This can mean the minimum permissable price change, or it can mean a price change of 100 basis points. For index point are simply the units of measurement of the index. Currently for the FT-SE 100 the minimum price movements is 0.5 index points.

Portfolio insurance

An investment strategy employing various combinations of shares, options, futures and debt that is designed to provide a minimum or floor value to the portfolio.


A market commitment. Also see net position.

Position limit

A restriction on the maximum number of contracts that can be held by a single trader at any one time.

Position trading

A trading strategy in which a position is held for longer than one day.

Positive feedback tader

See momentum trader.

Price discover

The process by which a market (usually the futures market) reflects new information before another related market (usually the spot mrket).

Price limit

The maximum and minimum prices, as specified by the exchange, between which transactions may take place during a single trading session.

Price range

The difference between the highest and lowest pricing during a given period.

Price relative

The price at time t + l divided by the price at time t.

Programme trading

The simultaneous trading of a basket of shares as part of a plane or strategy. The NYSE definition require the simultaneous trading of at least fifteen stocks with a total value of over $1 million.

Punching and settlement price

A manipulator first establishes a long (short) position in index futures, and then buys (sells) shares to push the final settlement price up (down).


The use of profits on a previously established position as margin for adding to that position.

Quasi-futures contract

This is the same as a futures contract, except that the payments of variation margin do not involve the full daily price change. Instead, the traders pays(or receives) each day the present value of the daily price change if it were paid on delivery day; a smaller sum.


The sequence of potential arbitrageurs, in order of increasing transactions costs.

Random walk

The theory that changes in the variable (for example, share returns) are at random; that is, they are independently and identically distributed over time.

Realised bid-ask price

The difference between the prices at which scalpers have bought and sold.

Reportable position

The number of futures contracts above which one must report daily to the exchange or the CFTC the size of the position by delivery month and purpose of trading.

Reserve cash and carry

An arbitrage transaction where the trader holds a short position in the underlying asset and a long position in the corresponding futures contract.


See overpriced.


See pit.

Risk premium

The additional return risk-averse investors require for assuming risk.

Roll over

Liquidation for a futures position, and the establishment of a similar position in a more distant delivery month. This is also called a switch. When a hedger switches their futures position to a more distant delivery month this can be called ‘rolling the hedge forwards’.

Round lot

A quantity of shares that corresponds to that in which trading normally takes place.

Round trip

The purchase (sale) of a futures contract and the subsequent offsetting sale (purchase). Transactions costs are normally quted on a ‘round trip’ basis.

Round turn

See round trip.

Rule 80a in U.S.

When the NYSE moves down (up) by more than some preset limit, selling (buying) shares (not just short selling) as part of an index arbitrage transaction can be execute only if the last price movement was up (down). This rule was introduced in 1990.


To trade for small gains, normally by establishing and liquidating a futures position quickly, often within minutes, but always within the same day.

Scanning range

The largest price movement in the underlying security for which the clearing house requires cover.

SEBI Securities and Exchange Board of India

The regulatory body for all participants in the securities and derivatives markets in India.


Securities and Exchange Commission. A federal agency charged with the regulation of all US equity and options markets.

Security market line

A line showing the relationship between a security’s beta and its expected return.


The process by which clearing members close positions.

Settlement date

See delivery date.

Settlement price

The price which the clearing house uses to determine the daily variation margin payments. It may differ from the price of the last transaction.

Sharpe’s measure

A measure of the risk adjusted performance of an investment. It is calculated as the excess return on the investment divided by the standard deviation of investment returns.


A market position established by selling one or more futures contracts not yet closed out through an offsetting purchase in anticipation of falling prices; the opposite of long.

Short hedge

A hedge involving a short futures position and a long spot position.

Short sale

A trader sells shares he or she does not own This is equivalent to a negative holding of the share.

Short the basis

The purchase of a futures contract as a hedge against a commitment to sell the underlying asset.

Simple basis

See basis.

Size effect

This exists when the return of small firms exceed the risk adjusted returns predicted by the CAPM.


Standard Portfolio Analysis of Risk. This is a system for calculating initial margins on portfolios of options and futures developed by the CME, and used by them since 16 December 1988, and by LIFFE from 2 April 1991.


A floor trader charged with the making of a fair and orderly market in particular shares or options.


Trading on anticipated price changes, where the trader does not hold another position which will offset any such price movements.


An example of an ETF, Standard and Poor’s Depositary Receipts (SPDRs) were introduced on 29 January 1993 by AMEX. They represent shares in a trust consisting of a basket of shares that is designed to track the S&P500 index. The trust has a life of 25 years, at which point it will be distributed to share holders.

Spot market

The market in which the asset underlying the futures contract is traded e.g. the stock market.

Spot month

See delivery month.

Spot price

A derivation of ‘on the spot’ usually referring to the cash market price of a financial instrument available for immediate delivery.


The simultaneous purchase of one futures contract and sale of another, in the expectation that the price relationship between the two will change so that the subsequent offsetting sale and purchase will yield a net profit.

Spread basis

The difference in the prices of the near and far contracts in a spread.

Spread margin

A reduced margin payment for the holder of a spread position.

Spread ratio

The number of futures contracts bought, divided by the number of futures contracts sold.

Stack hedge

A large position in an existing futures contract is partly rolled over into a later contract month, possibly several times. This procedure may be used to hedge a series of payments or receipts.

Stale prices

A price is stale if it refers to the price of a trade that took place some time ago. See infrequent trading.


A market order to buy when the market price has touched a specified level above the current price, or a market order to sell when the market price has touched a specified level below the current price. Also known as a s-loss order. Opposite of a market-if-touched order.


For futures contracts, this is a synonym for a spread.

Strengthening of the basis

This occurs when the futures price declines relative to the spot price.

Strike price

See exercise price.

Strip hedge

A trader takes the same position (long or short) in a future for a series of delivery dares. This may be used to hedge a series of payments or receipts.


See roll over.

Synthetic futures

A combination of a long call option and a short put option, or debt and the underlying asset, that replicates the behaviour of a long futures contract.

Systematic Risk

Risk inherent in the market as a whole which cannot be diversified away. It is measured for each firm by a ‘beta’ value. Also known as market risk.

Tail risk

The risk created by marking to the market.

Tailing factor

The correction factor by which the hedge ratio is multiplied to allow for tail risk.

Tailing the hedge

Correcting the size of hedge to allow for the risks of marking to the market.

Tax timing option

Capital gain (losses) on shares are taxable when realised. The tax timing option refers to the fact that the owner can choose when to liquidate his or her position in the shares, and hence when the tax liability (or loss) occurs.

Technical analysis

The prediction of prices by examining past prices, volume and open interest .

Term structure of futures prices

The relationship between futures prices on the same underlying asset, but with a different time to maturity.

Theoretical value

See fair value.

Thin market

A market with few trades.


Theoritical Intermarket Margining System. This another system for calculating performance bond (initial margin) requirements for options. It is developed by the Options Clearing Corporation OCC).

Tick size

Minimum permitted movement in the quotation. Measured in index points.

Tick price

See minimum price movement.

Time spread

See calendar spread.

Tracking error

The deviations between a portfolio’s performance and that of the portfolio whose performance it is desired to mimic.

Trading lag

The time delay between when an order is initiated and executed.

Trading limit

The maximum number of contracts that a person can trade in a single day.

Triple witching hour

That time every 3 months when four different contracts reach maturity – stock index futures contracts, stock index options on index futures and some options on index futures and some options on individual stocks.

Underlying assets

The security, stock, commodity or index on which a futures contract is based.


The actual futures price is less than the no-arbitrage futures price.

Unsystematic risk

Risk due to event which affect individual companies, not the market as whole. It can be removed by holding a well diversified portfolio.


See liquidation.


An increase of one tick in the price of a security.


Value at Risk. A risk management methodology, which attempts to measure the maximum loss possible on a particular position, with a specified level of certainty or confidence.

Value basis

The actual futures price less the no-arbitrage futures price.

Value trader

A trader who buys when assets look underpriced, and sells when assets look overpriced. Such a trader tends to buy when there is a large drop in prices, and sell when there is a large rise, and so tends to stabilise prices.

Variation margin

The gain or losses on open contracts, which are calculated by reference to the settlement price at the end of each trading day and are credited or debited by the clearing house to the clearing member’s margin accounts and by those members to or from the appropriate customers margin accounts.


A market is volatile when it is prices fluctuate a lot. Academics often choose to measure the volatility of a variable by its variance.


The number of transactions in a futures contract during a specified period of time.

Weakening of the basis

This occurs when the futures price rises relative to the spot price.est of the week.

Zero-sum game

This is when the gains (losses) of the long positions are exactly equal to the losses (gains) of the short positions. This is true for the market as a whole for all futures products.

90/10 fund

A sum is invested in fixed interest securities to guarantee the initial investment at a specified date (e.g. 90 percent of the money), and the remainder (e.g. 10 percent) is used to trade futures.

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