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16 Cards in this Set
- Front
- Back
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What happens when one tries to cross-hedge using two commodities whose prices don't predictably follow each other?
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Hedged risk is greater than in hedged risk.
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When cross-hedging commodities do you take delivery?
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No. Physical delivery cannot take place because the commodity bring hedged does not meet contract specs in the market.
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What commodity is used to hedged sorghum/milo?
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Corn
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The price of the MGEX and CBOT spread is defined by....
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MGEX wheat futures minus CBOT wheat futures price.
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What are the three listed MGEX -CBOT wheat spread options?
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1) MGEX July -CBOT July
2) MGEX September - CBOT July 3) MGEX December - CBOT December |
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What does Rule 559 define?
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Requirements concerning the aggregation of positions and allowable exemptions from specified position limits.
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NFA
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National Futures Association: An organization for the U.S. futures industry with no ties to any specific marketplace.
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Open Order
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AKA Good Til Canceled. An order which remains in force til canceled.
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Diminishing Balance Contract
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Specific futures whose front month volume in any given contract month diminishes as the contract month progresses towards month end.
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Broad Based Index Future
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A futures contract based upon an index that is not considered narrow based as defined by the CEA.
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Combination Order /Spread Order
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A combination of buy and/or sell orders for the same account, at the majrkrt, at a fixed differential, or by some other appropriate price convention.
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EFP
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Exchange for Physical: a privately negotiated and simultaneous exchange of an Exchange futures position for a corresponding cash position. Governed by Rule 538
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Futures Contract
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A legally binding agreement to buy or sell a commodity or financial instrument at a later date pursuant to the rules of the exchange. They are normally standardized according to wuality, quantity, delivery period and location for each commodity. Only variable is price.
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Position Limits
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Calculated on a net futures equivalent basis by ckntract, and will include contracts that aggregate into one or more base contracts as set forth in the table.
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What spread is used to manage the wheat protein spread?
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MGEX - CBOT wheat spread
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What kinds of wheat are involved in the MGEX - CBOT wheat spread option?
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MGEX-HRW
CBOT-SRW |
