This is a list of definitions of terms used throughout this website.
- Broker Assisted
The account owner makes all trading decisions for a given account
with the assistance of a Broker. The account owner must authorize each
and every transaction prior to a trade being entered.
- Cash, Cash Account
All trading conducted on a non-leveraged basis, i.e. the
Client must settle each transaction in full and must have any
instrument sold on deposit in his/her account prior to entering into
the sale.
- Commercial Hedger
A trader who enters into a transaction looking to either acquire or dispose
of a specific instrument or commodity or to "hedge" i.e. protect himself/herself
from an adverse price move in a specific instrument or commodity. Hedge Accounts
generally have lower Margin requirements if they are trading on margin.
- Fully Managed
The account owner (by executing a
Written Power of Attorney) has granted a third party trading
authority over his/her account. By granting POA over an account the
Trading Manager does not have to consult with the account owner prior
to entering trades for a given account.
- Margin, Margin Account (includes Short Sales and Options Trades)
All trading conducted on a leverage basis, i.e. the client is required
to enter into a Margin Loan or to deposit a "Good Faith Deposit" to conduct
trading. In a Margin Transaction the risk of loss and/or profit is amplified
as the trader controls a larger quantity of a specific financial instrument
than he would in a Cash Transaction.
- Physical Delivery Client
A trader who enters into a transaction with the intention of taking physical
possession or making physical delivery of the specific instrument or commodity
bought or sold.
- Self-Directed
The account owner or his direct employee(s)
make all of the trading decisions independently for a given account.
- Speculator
A trader who enters into a transaction looking to profit from a favorable
change in the market price rather than from a need to acquire the instrument
or commodity purchased/sold for a commercial use.