Terms
The best price which one can buy
What is bid price?
What is ask price - bid price?
OTC stands for this.
What is an Over the counter?
This process updates gains and losses every day based on the new futures price.
what is daily mark-to-market?
average rate on Repurchase-agreement contracts
what is SOFR (secured overnight financing rate)?
contract in which you reach out to dealing bank to negotiate asset, quantity, maturity, and they tailor to your needs
What is Forward contract?
The ability to trade quickly in large ammounts with little adverse price movement
What is Liquidity?
If the ask is $60.50 and the bid is $60.45, this is the bid-ask spread.
What is $0.05?
when the margin account reaches the "maintenance margin"
what is "margin call"?
when the fixed rate is offered against SOFR floating
What is the swap price?
the deposit made to begin in the futures market
What is initial margin?
This order guarantees speed, not price
What is a market order?
wealth managers, hedge funds, other banks, multinational companies, SMEs, and wealthy individuals are traditionally Clients of this market
What is OTC Markets?
to sell the same contracts you already bought
What is an example of reversing trades?
Placed by those determined
to trade immediately
what is Market order?
becomes seller to you, buyer for me
What is clearinghouse?
More depth in a market is equal to this
What is more liquidity?
2 kinds of orders within order driven markets
What is Limit buy order and Market Order?
Oil futures fall by $2. A trader is long 5 contracts, each for 1,000 barrels. This is the margin account change.
What is −$10,000?
The agent (trader) acts in selfish best interest even though it conflicts with the employer’s (principal’s) best interest
what is agency cost or principal-agent problem
quantity posted as available at best quotes
What is depth?
to provide liquidity by stepping in and transacting whenever equal and opposite orders fail to arrive in the market at the same time.
What is the role of the market maker?
This type of risk is why OTC clients need credit approval
What is counterparty credit risk, or the risk that the client fails to perform?
This system makes reversing trades easy to "settle up right away"
what is the margin system?
Lost €4.9 billion at Société Générale
What is Jérôme Kerviel?