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Q & R words
Quick Order: See Fill or Kill Order.
Quotation: The actual price or the bid or ask price of either cash commodities or futures contracts.
Rally: An upward movement of prices. Same as Recovery.
Random Walk: An economic theory that price movements in the commodity futures markets and in the securities markets are completely random in character (i.e., past prices are not a reliable indicator of future prices).
Range: The difference between the high and low price of a commodity during a given period.
Ratio Hedge: The number of options compared to the number of futures contracts bought or sold in order to establish a hedge that is risk neutral.
Ratio Spread: This strategy, which applies to both puts and calls, involves buying or selling options at one strike price in greater number than those bought or sold at another strike price.
Reaction: The downward price movement tendency of a commodity after a price advance.
Recovery: An upward price movement after a decline. Same as Rally.
Regular Warehouse: A processing plant or warehouse that satisfies exchange requirements for financing, facilities, capacity, and location and has been approved as acceptable for delivery of commodities against futures contracts. See Licensed Warehouse.
Replicating Portfolio: A portfolio of assets for which changes in value match those of a target asset. For example, a portfolio replicating a standard option can be constructed with certain amounts of the asset underlying the option and bonds. Sometimes referred to as a Synthetic Asset.
Reporting Level: Sizes of positions set by the exchanges and/or the CFTC at or above which commodity traders or brokers who carry these accounts must make daily reports about the size of the position by commodity, by delivery month, and whether the position is controlled by a commercial or non-commercial trader.
Resistance: In technical trading, a price area where new selling will emerge to dampen a continued rise. Also see Support.
Resting Order: An order to buy at a price below or to sell at a price above the prevailing market that is being held by a floor broker. Such orders may either be day orders or open orders.
Retender: In specific circumstances, some contract markets permit holders of futures contracts who have received a delivery notice through the clearing house to sell a futures contract and return the notice to the clearinghouse to be reissued to another long; others permit transfer of notices to another buyer. In either case, the trader is said to have retendered the notice.
Retracement: A reversal within a major price trend.
Reversal: A change of direction in prices.
Reverse Conversion: With regard to options, a position created by buying a call option, selling a put option, and selling the underlying futures contract.
Riding the Yield Curve: Trading in an interest rate futures according to the expectations of change in the yield curve.
Ring: A circular area on the trading floor of an exchange where traders and brokers stand while executing futures trades. Some exchanges use pits rather than rings. See Pit.
Risk Factor: See Delta Value.
Risk/Reward Ratio: The relationship between the probability of loss and profit. This ratio is often used as a basis for trade selection or comparison.
Roll-Over: A trading procedure involving the shift of one month of a straddle into another future month while holding the other contract month. The shift can take place in either the long or short straddle month. The term also applies to lifting a near futures position and re-establishing it in a more deferred delivery month.
Round Lot: A quantity of a commodity equal in size to the corresponding futures contract for the commodity. See Even Lot.
Round Turn: A completed transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.
Rules: The principles for governing an exchange. In some exchanges, rules are adopted by a vote of the membership, while regulations can be imposed by the governing board. |
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