Your Gateway to Financial Literacy
Introduction to Visible Supply Understanding the concept of visible supply is essential in markets dealing with commodities or securities where goods are not consumed instantly upon purchase but can be stored, transported, or traded as futures contracts. Visible supply refers to the amount of a good or commodity that is
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What is a Vault Receipt? A vault receipt is an essential document for investors participating in commodities futures markets, specifically those dealing with precious metals like gold and silver. A vault receipt serves as legal proof of ownership to the holder of a futures contract, allowing them to withdraw or
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Introduction to Trading Sessions A trading session refers to the primary hours of activity in a financial market for a specific asset or securities type within a defined locale. Understanding trading sessions is crucial for institutional investors as different markets and securities have varying trading hours. In this section, we
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What is the Spot Rate? The spot rate is an essential concept in finance and investment markets, representing the current price of an asset for immediate settlement or delivery. This price reflects the equilibrium between market supply and demand and forms the foundation for determining future prices in various markets,
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Introduction to Roll Yield Roll yield is an intriguing concept in the futures market, representing the profit that investors earn from adjusting their positions as a futures contract nears expiration and rolling it into a new contract with a longer maturity. The term ‘roll yield’ refers to the difference between
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What Is Open Interest? Open interest refers to the total number of outstanding derivative contracts, such as options or futures, where positions have not yet been settled. This measurement is significant in the context of futures and options markets, offering insights into the overall market liquidity and trend strength. Understanding
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Introduction to the National Futures Association (NFA) The National Futures Association (NFA) stands as a vital independent self-regulatory organization for the U.S. futures and derivatives markets. Established in 1982, NFA has been designated by the Commodity Futures Trading Commission (CFTC) to safeguard the integrity of these markets, protect investors, and
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Overview of Look-Alike Contracts Look-alike contracts, also known as “second generation” or “derivatives of derivatives,” represent an important segment of the derivatives market. These cash-settled financial instruments mimic the characteristics of exchange-traded futures contracts, with one notable difference: they do not involve actual physical delivery. Instead, look-alike contracts settle based
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What Is a Long Hedge? A long hedge, also known as a long position or a buyer’s hedge, serves as a cost-control strategy for companies that require purchasing specific commodities in the future and wish to secure a fixed price. This strategy is particularly relevant for input-dependent firms whose operations
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Introduction to Introducing Brokers (IBs) An introducing broker (IB), also known as a “sub-broker,” is an essential intermediary within the futures markets, connecting clients seeking access to financial markets with counterparties willing to execute trades on their behalf. This section provides a comprehensive overview of IBs, exploring their role in
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What Is Hashgraph? Hashgraph is an emerging decentralized ledger technology that aims to address some of the limitations of traditional blockchain consensus mechanisms, such as proof-of-work (PoW). While hashgraph and blockchain share similarities in their role as decentralized ledgers that secure information through cryptography, they differ significantly in the way
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What is a Futures Market? A futures market refers to a specific type of auction market where participants transact in futures contracts – exchange-traded derivatives agreements to buy or sell a commodity, currency, bond, or other asset for delivery at a later date. The price of these futures contracts is
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What Is Contango? Contango is a crucial term in futures markets, defined as the situation where futures prices exceed spot prices. It indicates that investors are expecting commodity or asset prices to rise. This phenomenon results from the upward-sloping forward curve of a commodity’s price over time. Understanding Contango and
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