| Term | Definition | Source |
| Abandon | The act of an option holder in electing not to exercise or offset an option. | NFA |
| ACC | American Commodities Corporation. | NFA |
| Accommodation Trading | Non-competitive trading entered into by a trader, usually to assist another with illegal trades. | NFA |
| Action Type | An Action Type is a uniform category of rule violation, such as floor recordkeeping violations, sales practice violations and trade practice violations. | NFA |
| Actuals | The physical or cash commodity, as distinguished from a commodity futures contract. | NFA |
| Adjudication | The determination of a controversy and a pronouncement of a judgment based on evidence presented. Implies a final judgment of the court or other body deciding the matter, as opposed to a proceeding in which the merits of the cause of action were not reached. | NFA |
| Adjudication Committee | A committee empowered by a self-regulatory organization for the purpose of determining an issue of fact and reaching a decision on the basis of evidence presented. | NFA |
| Adjustments | Certain events such as a stock split or a stock dividend (e.g., a 3-for-2 stock split). An adjusted option may cover more than the usual one hundred shares. For example, after a 3-for-2 stock split, the adjusted option will represent 150 shares. For such options, the premium must be multiplied by a corresponding factor. Example: buying 1 call (covering 150 shares) at 4 would cost $600. See also Strike price interval | |
| Administrative Hearing | A proceeding wherein evidence is taken for the purpose of determining an issue of fact and reaching a decision on the basis of that evidence. An Administrative Hearing may take place outside the judicial process, before officials who have been granted judicial authority expressly for the purpose of conducting such hearings. | NFA |
| Administrative Law | Law created by administrative agencies by way of rules, regulations, orders and decisions. | NFA |
| Administrative Law Judge (ALJ) | The presiding officer of an administrative hearing. An ALJ does not sit as a law judge, and his power is essentially one of recommendation. In the federal system, the ALJ is empowered to administer oaths and affirmations, issue subpoenas, rule on evidence presented, take depositions, regulate the course of the hearing and make or recommend decisions. | NFA |
| Affidavit | A written statement made under oath. | NFA |
| Affirm | The act of an appellate body upholding a decision of a trial court, an adjudication committee or a lower appellate court is called affirming the decision. | NFA |
| Against Actuals | A transaction generally used by two hedgers who want to exchange futures for cash positions. Also referred to as Exchange for Physicals or Versus Cash. | NFA |
| Agency Bond | A debt security issued by a government-sponsored enterprise such as Fannie Mae or Freddie Mac, designed to resemble a US Treasury bond. | CFTC |
| Agency Note | A debt security issued by a government-sponsored enterprise such as Fannie Mae or Freddie Mac, designed to resemble a US Treasury note. | CFTC |
| Aggregation | The policy under which all futures positions owned or controlled by one trader or group of traders are combined to determine reporting status and speculative limit compliance. | NFA |
| Agricultural Trade-Option Merchant (ATM) | An individual or organization which solicits or offers trade options for sale. Must be registered with the Commodity Futures Trading Commission. | NFA |
| Aid and Abet | To actively, knowingly, intentionally, or purposefully facilitate or assist another individual in the commission or attempted commission of a crime. | NFA |
| All-or-none order (AON) | A type of option order which requires that the order be executed completely or not at all. An AON order may be either a day order or a GTC (good til cancel) order. | |
| Allowances | The discounts (premiums) allowed for grades or locations of a commodity lower (higher) than the par (or basis) grade or location specified in the futures contract. | NFA |
| American Option | An option that can be exercised at any time prior to or on the expiration date | CFTC |
| AMEX / ASE | American Stock Exchange. | |
| Answer | A written response to a demand or a third party claim. A written submission filed by a respondent named in a Complaint which answers each allegation in the Complaint by admitting, denying or averring lack of sufficient knowledge to admit or deny the allegation. | NFA |
| Appeal | A request to an appellate body to review a lower court's or an adjudication committee's decision. | NFA |
| Appeals Committee | A committee empowered by a self-regulatory organization for the purpose of hearing and deciding appeals from and reviews of decisions by hearing committees. | NFA |
| Appellant | The party bringing the appeal. | NFA |
| Appellate | About appeals; an appellate court has the power to review the judgment of a lower court or tribunal. | NFA |
| Appellee | The party against whom an appeal is brought. | NFA |
| Approved Delivery Facility | Any bank, stockyard, mill, storehouse, plant, elevator or other depository that is authorized by an exchange for the delivery of commodities tendered on futures contracts. | NFA |
| Arbitrage | The simultaneous purchase and sale of similar commodities in different markets to take advantage of a price discrepancy. | NFA |
| Arbitration | The process of settling disputes between parties. NFA's arbitration program provides a forum for resolving futures-related disputes between members or between members and customers. | NFA |
| Arbitration Panel | The arbitrators (one or three) appointed by NFA to hear and decide disputes brought to NFA for arbitration. | NFA |
| Arbitrator | A person chosen to decide disputes between parties in an arbitration proceeding. | NFA |
| Asian Option | An option whose payoff depends on the average price of the underlying asset during some portion of the life of the option. | NFA |
| Ask | Also called Offer. Indicates a willingness to sell a futures contract at a given price. See also Bid. | NFA |
| Ask / ask price | The price at which a seller is offering to sell an option or a stock. See also Assignment | |
| Assigment | Designation by a clearing organization of an option writer who will be required to buy (in the case of a put) or sell (in the case of a call) the underlying futures contract or security when an option has been exercised, especially if it has been exercised early.
| CFTC |
| Assignable Contract | One which allows the holder to convey his rights to a third party. Exchange-traded commodities are not assignable. | NFA |
| Assigned (an exercise) | Received notification of an assignment by The Options Clearing Corporation. See also Assignment | |
| Associate Member | A person who is associated with an NFA Member within the meaning of the term associated and who is required to be registered as an associated person with the Commodity Futures Trading Commission. | NFA |
| Associate Responsibility Action (ARA) | An action whereby an NFA Associate Member may be suspended from membership or may otherwise be directed to take remedial action when the President of NFA, with the concurrence of the Executive Committee, has reason to believe that the action is necessary to protect the commodity futures markets, customers or other Members or Associates of NFA. This may be a summary action. | NFA |
| Associated Person (AP) | An individual who solicits orders, customers or customer funds on behalf of a futures commission merchant, an introducing broker, a commodity trading advisor or a commodity pool operator and who is registered with the CFTC. | NFA |
| At the Market | An order to buy or sell a futures or options contract at whatever price is obtainable when the order reaches the trading floor. | NFA |
| At the Money | An option with a strike price which is equal to, or approximately equal to, the current market price of the underlying futures contract. | NFA |
| Auction Rate Secutiry | A debt security, typically issued by a municipality, in which the yield is reset on each payment date via a Dutch auction.
| CFTC |
| Audit Trail | The record of trading information identifying, for example, the brokers participating in each transaction, the firms clearing the trade, the terms and time of the trade, and, ultimately, and when applicable, the customers involved. | NFA |
| Automactic Exercise | A provision in an option contract specifying that it will be exercised automatically on the expiration date if it is in-the-money by a specified amount, absent instructions to the contrary.
| CFTC |
| Averaging down | Buying more of a stock or an option at a lower price than the original purchase so as to reduce the average cost. | |
| Award | The written decision of the arbitrators. | NFA |
