The 3Dimensional Trading Breakthrough

The 3 Dimensional Trading Breakthrough
Gamma: The change of the option delta relative to the change in price of the
underlying futures contract.
GTC order: An order, Good-Till-Canceled, that is placed and held as an open order
until it is either filled or canceled by the trader. After 30 days, most GTC orders are
canceled.
Hedge: The buying and selling of offsetting positions in order to provide protection
against an adverse change in price. A hedge may involve having positions in various
instruments.
Hedger: An individual or institution utilizing the commodities futures/options
markets in order to reduce or remove risk from unforeseen price movements in the
future.
Historical volatility: A measure of futures price movement/option premium over
a specified period in the past.
Implied volatility: A measure of trader/market sentiment relative to price
movement given a known option price.
In-the-money: An option which holds intrinsic value and could be exercised/closed
out for a cash credit. A call is in-the-money if its strike price is below the current
price of the underlying futures contract. A put is in-the-money if its strike price is
above the current price of the underlying contract.
Intrinsic value: The dollar amount that would be realized if the option were
to be exercised immediately.
Leverage: The ability to control large contracts of commodities or stocks with
only a small amount of upfront cash.
Limit move: The maximum price a commodity can change from the prior day’s
close. This is regulated by the hosting exchange.
Limit order: An order which must be filled at a specified price or better.
Liquidate: A purchase or sale that offsets an existing position. This may be done
by selling an option that was previously purchased, or by buying back an option
that was previously sold.
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