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Trading Terms

Forward contract -optional term

When an importer is unsure of the exact delivery date, they may encounter a situation where the contract rate is adjusted against them if they enter into a fixed term contract and are required to deliver significantly earlier than the expiry date. This uncertainty can be avoided by entering into a contract with a firm rate that applies for delivery within a specified period, typically 15 to 30 days. In this case, deliveries within the optional period would be executed at the contract rate, while earlier deliveries would require an adjustment to the rate, similar to pre-deliveries in fixed term contracts.

Non-Trend Day

During a narrow range day, the market experiences little to no movement in either direction. This may be due to factors such as low trading volume or lack of significant new...

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Security Selection Ratio

The success rate of trades in a specific account, measured by the percentage of profitable liquidations. This is a crucial metric in the world of finance, as it reflects the...

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Clustering

In the realm of finance, it is crucial to identify clusters of vectors that share similar characteristics. This process is known as vector clustering and it plays a crucial ...

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Vega

Option sensitivity to changes in volatility is known as "vega." As volatility increases, the price of an option will also increase, making it more expensive to purchase. Thi...

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