Category Archives: Glossary
Rally
A rally is characterized by fast buying of securities (stock, bonds) or derivatives (commodities) when the value of the asset is expected to increase. A rally will usually follow a period of sustained price decline.
Sell-off
A sell-off is characterized by fast selling of securities (stock, bonds) or derivatives (commodities) when the value of the asset is expected to decline. A sell-off will usually follow a period of sustained price increase.
Overbought Market
An overbought market is characterized by massive buying of futures contracts and by a sharp increase in futures prices during a short period of time, generally as a consequence of factors not explained by fundamentals. This occurrence can be interpreted … Continue reading
Oversold Market
An oversold market is characterized by massive selling of futures contracts and by a sharp decline in prices during a short period of time, generally as a consequence of market overreaction or panic selling among investors. This occurrence can be … Continue reading
Short Covering
A short covering occurs when an short investor buys the exact same contract to remove himself from the market. This action reduces open interest in the contract. Investors will follow this strategy whenever they think that the futures price will … Continue reading
Liquidating Market
A liquidating market occurs when the majority of investors are liquidating their positions at the same time, usually when contracts approach delivery. This can also happen when a financial bubble bursts and investors stop buying and are liquidating their investments … Continue reading
Open Interest
Open interest is the number of outstanding contracts that have not been delivered or closed (positions that have been opened). For every long position there must be a respective short position. Open interest increases as more traders enter the market. … Continue reading
Congestion
Congestion or consolidation reflects a pattern without strong indication of a trend of commodity prices. During congestion aggressive buying and selling of commodity futures contracts occur within a limited range of price fluctuation.
Hard Red Winter Wheat
Hard Red Winter Wheat is a hard, brownish, mellow high-protein wheat used for bread, hard baked goods and all-purpose flour. It can have either hard or soft endosperm. Hard red winter wheat is seeded in the fall. It is produced … Continue reading
Soft Red Winter Wheat
Soft Red Winter Wheat is a low to medium protein wheat with soft endosperm used to make cake flour, pastry flour and some self-rising flours (baking powder and salt added). Soft red winter wheat is seeded in the fall. It … Continue reading