Popular Trading & Technical Terms Used
Long A buyer of a futures contract:
Someone who buys a futures contract is often referred to as being long that particular contract.
Short A seller of a futures contract:
Someone who sells a futures contract is often referred to as being short that particular contract.
A margin is cash or marketable securities deposited by an investor with his or her broker. The balance in the margin account is adjusted to reflect daily settlement. Margins minimize the possibility of a loss through a default on a contract.
Initial Margin:

Initial Margin for the Clearing Members proprietary positions will be based on the minimum margin required for a particular commodity and will vary from commodity to commodity.

Maintenance Margin:

Maintenance Margin will be 75% of the Initial Margin. Under no circumstances should the Maintenance Margin fall below this level.

Variation Margin:

Variation Margin payments will be made on a daily or intraday basis by the Clearing member to the Clearing House based on adverse price movement in positions carried by the Clearing Member, calculated separately for customer and proprietary positions.

Business Day:

A day when the exchange is open for trading.

Exposure Limits:

Exposure Limits are defined as the Maximum Open positions that Clearing Members can take across all Contracts.


If a contract is not closed out before maturity, it usually settled by delivering the assets underlying the contract. When there are alternatives about what is delivered, where it is delivered, and when it is delivered, the party with the short position chooses.

Open Interest:

Open Interest is the total number of contracts outstanding. It is equal to number of long positions or number of short positions.

Last Traded Price:

Last traded price is the price just before the final bell each day. It is used for the daily settlement process.

Volume of Trading:

Volume of Trading is the number of trades in 1 day.

Spot Price:

The current price at which a particular commodity can be bought or sold at a specified time and

Doji Star:

A Spinning Top which gaps above or below the previous candle. It is a reversal signal, which requires a confirmation from the next candle. If the Doji star gaps above the previous green candle, it is a bearish signal indicating a top and vice versa.

Dark Cloud Cover:

A long white candlestick is followed by a black candlestick. The black candlestick opens above the white candlestick's high and closes well into the white candlestick's body.

Inverted Hammer:

A candlestick with a long upper shadow and a small body formed in a downtrend. The long upper shadow and small real body at the bottom of the trading range are cause for concern by the bears. They wonder if this is the end of the downtrend and take measures to protect their gains. If the next day opens above the body of the Inverted Hammer, then expectations could be for shorts to cover and propel a reversal rally.

Bullish Piercing Line:

A bottom reversal signal. A red candlestick followed by a green candlestick that opens lower than the red candlestick's low, but closes more than halfway into the red body. The gap down on the 2nd day perpetuates the downtrend. However, the 2nd day's close is above the midpoint of the 1st day's body. This suggests to the bears that a bottom could be forming. The more penetration of the close on the 2nd day to the 1st day's body, the stronger the reversal signal.

Hanging Man:

A small body (white or black) near the high with a long lower shadow with little or no upper shadow. The lower shadow should be two or three times the height of the body. It is a bearish formation during an uptrend.

Shooting Star:

A single day pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted Hammer except that it is bearish.

Spinning Top:

A candle with a small gap, negative or positive, between the open and close. Spinning tops usually indicate a trend reversal, but require a confirmation from the next candle. If they are formed at the peak of a rally, they usually indicate a top and vice versa.

Engulfing Bearish Formation:

A small green candle followed by and contained within a large red candle. This is usually an indication of a top.

Engulfing Bullish Formation:

A small red body followed by and contained within a large green body.

Bullish Divergence:

Occurs when prices reach a new low but an oscillator or RSI reaches a higher bottom than it reached during its previous decline. This is known as a Class A bullish divergences. Class A bullish divergences are often the best signals of an impending sharp rally.

Relative Strength Index (RSI):

The Relative Strength Index (RSI) is a popular oscillator used by traders. The name "Relative Strength Index" is slightly misleading as the RSI does not compare the relative strength of two securities, but rather the internal strength of a single security. A more appropriate name might be "Internal Strength Index." The RSI is a fairly simple formula, but is difficult to explain without pages of examples.