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We have provided this guide to familiarize you with our
comprehensive Alpha One Trading.com Web site and our fast and convenient ALARONLINE online
trading service. Keep this guide near your computer desktop as a handy
user’s guide detailing the steps you’ll need to know to trade futures and
options with us. We’ve also included general trading information for your
trading education and reference needs.
For assistance or more information, contact Alpha One Trading
at (888) 556-5699 or click the button on the right edge of our header at Alpha One
Trading.com and we’ll call you!
Alpha One Trading is a family owned and operated firm
located in Costa Mesa, California. From the beginning it has been the goal of the firm to
provide the highest quality of service possible. We believe in supplying our clients and
prospects with all the educational support they need without the pressure to trade. We
also have high-tech methods of tracking paper trades and their results. Our most important
asset is our client and our most important commodity is our service.
Why Trade
Futures and Options?
Diversify
and Hedge
Leverage
and Speculate
Other
Advantages
Why
Trade with Alpha One Trading and ALARONLINE?
ALARONLINE
High leverage through low margins.
Maximum convenience and speed.
Accurate and comprehensive,
“up-to-the-click”SM information.
Alpha One Paper Trading accounts
Trading Resources
Everything You Need to Be an Educated
Trader
Trader’s Tools
Up-to-the-ClickSM
Quotes
Futures Charts
FREE Daily Research
Futures
News
Technical
Support
Trading Online
with ALARONLINE
What Are The
Hardware and Software Requirements for Using ALARONLINE?
How Can I Preview
ALARONLINE?
How Can I Open
an ALARONLINE Account?
How Do I Connect to
ALARONLINE?
What
Type of Contracts Can I Trade Through ALARONLINE?
What
Types of Orders Can I Place Through ALARONLINE?
How Can I Research Trades?
Online Quotes
How
Can I Create an Automated Quote Page?
How Can I
Place Trade Orders?
Futures Order
Options Order
Futures Spread Order
Options Spread Order
What
Happens To My Trade Order Once I Place It?
How
Can I Confirm That My Trades Have Been Executed?
How Can I
Change or Cancel My Trade Orders?
How Can I Check My
Open Positions?
How Can I View My
Daily Statements?
How Can I Confirm
Account Balances?
How
Can I Deposit Funds to My ALARONLINE Account?
How
Can I Withdraw Funds From My ALARONLINE Account?
How Can I Access
Online Trading Technical Support for ALARONLINE?
How
Can I Access Broker Assistance for Online Trading?
Trading Glossary
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As innovative and popular investment vehicles, futures
and options present significant opportunities and maximum flexibility to both the
experienced and first-time investor. Futures contracts allow individuals to trade
contractual obligations to buy or sell a grain, metal, currency, index or other commodity
at a specified price at a specified time. Buying options affords traders the
right—not the obligation—to purchase or sell futures contracts at a specified
price.
Diversify and Hedge
Futures contracts were developed to help smooth out commodity
supply and seasonal fluctuations in demand throughout the year. They are used, along
with options, to help producers and others hedge, that is, minimize, the loss associated
with price risk.
Seasoned investors with positions in the stock and cash
markets turn to futures and options to diversify their existing portfolios and to broaden
the range of investing tools and strategies they employ in their pursuit of profits.
In addition, these same experts use futures and options to protect their stock
position from adverse increases or declines in stock prices. They “hedge”
their stock or cash position—minimizing potential loss and managing their investment
strategy—by making counterbalancing investments in the futures contracts or options
of the corresponding stock index or currency index. By using futures and options,
they secure this protection without incurring high transaction fees.
The wide variety of expiration dates for futures contracts
and options and the broad range of strike prices for options provides traders with an
expansive range of hedging alternatives. These alternatives allow traders to
establish a price level today for currencies, stocks or commodities they plan to sell in
the future.
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Leverage and Speculate
Trading futures and options is not only for institutions and
hedgers. Many individuals utilize this investment vehicle because it offers an
inexpensive alternative to stock ownership and other traditional, costly investment
routes. Unlike stock market investments, which typically require margin deposits of
at least 50% and major reserves of investment capital, individuals can trade futures
contracts with a low initial and maintenance margin deposit, often as low as 5% to 10%
of the underlying contracts’ value.
And options present even greater leverage: option buyers pay
the premium and transaction costs upfront and have no need to post additional margin.
Individuals who believe prices or market trends will behave
in a particular way can speculate and profit on their opinions without investing the time
and money necessary to select individual stocks—and without investing the significant
capital required to actually purchase or deliver metals, grains, currencies, etc.
In this way, futures and options allow speculators—members of the
investing public as well as floor traders—to assume some of the price risk associated
with commodities or other futures products and to profit from properly anticipated price
changes. (Of course, only those traders who understand the risks associated with
trading should speculate; there is significant risk of loss when trading futures.)
Consider for example, those investors seeking the benefits of
a diversified equity portfolio or to profit from overall market trends. To best meet
their goals, these traders may desire to replicate the industry standard—the S&P
500, which includes 500 of the largest-capitalization companies and represents a broad
cross-section of the U.S. equity market, including stocks traded on several markets.
If these traders used traditional methods with a stockbroker,
the cost to purchase all of these stocks would be exorbitant and
prohibitive—approximately $350,000. Buying into the S&P 500 index to
achieve the same result would require about half this investment; index shares are sold as
securities and provide investment leverage of about 2-
to-1. Futures contracts on the index offer the next most affordable investment
vehicle with even greater leverage, with contracts valued at about 250 times the futures
price. But for only about $5,000—the low 5% margin on the current value of
E-mini S&P 500 futures contracts—investors can find within their reach
participation in the leading stock index, the benchmark of performance tracked by pension
and mutual funds around the U.S. E-mini S&P 500 contracts are valued at about 50
times the futures price. (Similarly, E-mini NASDAQ 100 futures are currently valued
at 20 times the futures price.)
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Other Advantages
Futures and options allow traders the flexibility to move
beyond the tried-and-true strategy, “buy low and sell high,” to also sell high
first and then seek to buy back low when the opportunity arises. This is known as
short selling.
In addition, these vehicles also afford traders liquidity and
accelerated opportunity. Because the index, currency and commodity markets move
frequently, traders can encounter and exploit price fluctuation in periods as short as a
day—or even intraday. And the large daily volume of futures and options trading
allows traders to quickly make their plays and, just as quickly, move out or on to another
market. Day trading is the term for this method of executing quick buy/sell
and offset strategies in search of small profit objectives.
Buying options also presents the added advantage of limiting
risk. Once an option is purchased, a buyer may recognize unlimited profit, but
the most that he or she can lose is limited to the premium, or the price of the option,
and transaction costs.
Finally, those trading futures and options can access
information about the markets and investments with relative ease. They can trade the
entire market without being forced to track the daily business activities and boardroom
decisions behind each and every stock they select. Futures and options traders can
also rely on predictable, reliable public and private reports to understand price
prospects for almost every commodity or futures contract traded.
Overall, the futures market has experienced tremendous growth
and diversification in the last century and a half, with an ever-expanding list of
commodities, interest rates and stock market indices available to trade. The
development of regulated trading of options on futures contracts has added another
dimension to futures trading. Even after all this innovation, the industry’s
primary purpose remains the same—to provide an efficient and effective mechanism for
the management of price risk. It accomplishes this objective by offering speculators
the opportunity to trade based on their investment in the market, thereby transferring
price risk from the producer/hedger to the speculator.
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At Alpha One Trading, we enhance and magnify the
benefits of trading futures and options by providing the tools necessary for educated
trading. Keeping with our mission to “facilitate the trading of futures and
options contracts as efficiently and most cost effectively as possible,” we add value
by helping our clients make more informed trades more quickly.
ALARONLINE
Our online trading service, ALARONLINE, uniquely builds on
the strengths of futures and options trading by providing our customers with maximum
leverage, convenience and information.
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High leverage
through low margins
ALARONLINE accounts require those trading futures and options
contracts to maintain exchange minimum margins (subject to change without notice), the
lowest performance bonds that industry standards allow.
We remind potential traders that while the leverage
associated with futures and options trading can present an advantage, it also increases
the risk associated with trading.
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Maximum convenience
and speed
Use your computer at home or at work (or both!) to access
your ALARONLINE account 24 hours a day. Trade online and receive online confirmation
of your trades within seconds of placing your orders. For certain contracts
including the E-mini S&P 500 and the E-mini NASDAQ 100, trades are executed in
GLOBEX2, the exchange’s computer system; other electronically traded contracts are
executed in other electronic trading systems.
In the future, still other contracts will be executed via
computer trading to allow for faster order-fill response. For those contracts that
remain “pit traded,” ALARONLINE employs a technologically advanced order-routing
system that delivers the order directly to the broker’s computer terminal in the
trading pit or in an area adjacent to it. (Please be advised that only certain
markets utilize this order routing system - ask your broker for details.)
Check open positions, access real-time quotes, monitor your
account, view your daily trading activity and confirm account balances—all with
privacy and security. And when you need convenient and speedy support—Online
Trading Technical Support, Customer Service and even broker assistance—ALARONLINE
delivers with just a click or a call.
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Accurate and
comprehensive, “up-to-the-click”SM information
Thoroughly research the futures market—access perhaps
the only freely available and comprehensive daily research in the industry, read futures
news, order trading books and publications, review historic price charts and check
real-time quotes—all without ever leaving the Alpha One Trading.com site and always
just a click away from your trading account.
ALARONLINE provides everything you need to be an educated
trader. Once you’ve researched online, we offer fast and accurate futures
and options direct order placement along with real-time, “up-to-the-click”SM
quotes and marked-to-market account information.
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Alpha
One Paper Trading accounts
As a brokerage firm, we have received many calls regarding
paper trading. Many of these callers have a little bit of knowledge that was recently
acquired, but have no idea how to apply it to trading. That’s the reason we came up
with this ‘Paper Trader’s Kit". In this kit you will find various tools and
information that will assist you in starting and maintaining your paper trading. Some of
you may have taken one or more of the many courses that are available to commodity
enthusiasts out there, but they all have a similar flaw. None of them teach you how to
paper trade. I think we have put together a pretty good package that will aid you in all
the steps of paper trading. From gathering information, all the way to figuring profits
and losses.
Now beginners can feel completely comfortable in trading, and
professionals can refine systems and strategies, without risking their funds. Alpha One
Trading is pleased to announce its new Futures and Option Paper Trading Program. Utilize
our resources and personnel while simulating trades in a real time environment. This is
live paper trading. After all, there is no substitute for experience.
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Everything
You Need to Be an Educated Trader
Given the volatility of the futures and options markets, fast
and accurate information is the very currency of trading. And whether you opt for
Alpha One Trading full-service brokerage services or trade your own account electronically
on ALARONLINE, you’ll find Alpha One Trading.com to be a comprehensive and valuable
Web site, offering you all the reference and information tools you need to master futures
and options trading and manage your account.
ALARONLINE users will find the site particularly useful,
since essential trading information is always just one click away from their online
trading account. Our seamless, easy-to-use site enables a customer in the midst of
placing an order to click over to check a contract’s expiration, size or point
valuation; click to check real-time quotes; click to view a chart tracking the
contract’s price performance over the last day, week or month; click to check the
descriptions of the order types and select the one that best suits the trading goal; and
click back to finalize the trade. All these functions can be executed within
seconds, without opening new screens or leaving the site.
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Trader’s
Tools
To free you up to focus on the
performance and projections of the contracts that interest you most, the Alpha One
Trading.com home page provides all the basic background data you need to understand and
execute your trades. Alpha One Trading has a reference library for traders, listing:
The abbreviations used to denote the contract months;
The symbols used to denote the different types of contracts;
Current margins and contract specifications, including each contract’s
trading hours, point values, tick fluctuations, sizes and initial maintenance and spread
margins;
The different order types, their modes of operation and the trading
strategies they are best suited to execute; and
Expirations for futures and options.
To provide even more trading
assistance, Alpha One Trading.com also allows traders to order more than 25 free trading
guides and materials, including recent government reports as well as booklets about
futures markets, index products, agricultural crops, currency products and interest rate
products.
Traders can also use our site to
order free trial issues of futures and options magazines and newsletters, such as Futures,
Commodities Now, Trends in Futures and AgTrader.
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Up-to-the-ClickSM
Quotes
Informed investing requires
instantaneous information. Every second counts when you are buying and selling in
the market, since the best trading strategies are synchronized with the market and the
best trading moves are tailored to the current performance of the market.
ALARONLINE customers simply log onto
ALARONLINE for real-time quotes, provided “up to the click”sm with no delays, so
that you never trade from outdated price information. Up to the clicksm means that
quotes are updated the instant you select to view them and that they present the most
accurate picture available of the market. ALARONLINE customers can also access a
customized and automated quote page, where they can simultaneously check the latest prices
for up to 21 contracts that they wish to monitor.
Customers and visitors alike can
access slightly delayed quotes at the Alpha One Trading .com Web site by clicking once on
a contract type. These quotes are delayed about 10 to 15 minutes.
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Futures
Charts
You may want to view historic price
activity for a futures contract. Once you’ve accessed the contract price quotes
at Alpha One Trading.com, click on the contract name to view the daily chart. You
can then alter the chart to view weekly, monthly or intraday price activity. At
Alpha One Trading.com, you can also select from several types of charts—moving
average, stochastic, relative strength index and movement index charts—as well as
several chart sizes and formats—bar, candle and line charts.
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FREE
Daily Research
Alpha One Trading research site contains current research
information on interest rate, agricultural, energy, currency, metals, equity and
"softs", produced by analysts and affiliates. Our research recognizes that
growing linkages between markets requires integrated analysis of all markets. Don't wait
to obtain a professional analysis of current crop conditions, this morning's Unemployment
Report, or a crucial weather forecast. Tap into the source. Gain the decisive information
advantage to secure your trading edges.
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Futures News
Turn to this online feature throughout the day to learn about
the latest government reports and market happenings. Alpha One Trading.com features
real-time news stories and updates provided on our site by Futures World News.
Alpha One Trading.com’s on-site links provide full-text
articles on developments and market performance. It’s like having your own
correspondent on the trading floor—all without ever having to leave the site and
always a click away from your trading account.
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Alpha
One Tradings Dedicated Online Trading Technical Support/Customer Service/24-hour Trade
Desk Assistance
Trading your account electronically should never mean that you trade entirely on your own.
Just as you will never be just another account number when you trade at Alpha One Trading,
you will never be without support when you use our online services or Web site.
Alpha One Trading Online Trading Technical Support can answer
your questions about using the trading program or executing online trades. Whether
you are trading online through ALARONLINE or using any of our comprehensive Web site
resources, you can access our toll-free Online Trading Technical Support directly from
Alpha One Trading.com. In fact when you use the Web site to notify us that you need
help, we’ll phone you immediately! Or, if you can’t receive calls while
connected to the Internet, you can direct us to phone you when you expect to be available
or at a time most convenient for you—any time from the next 15 minutes to the next
day. You can also phone (888) 556-5699.
Please remember that Online Trading Technical Support cannot
provide market recommendations. Contact your Alpha One Trading Account Executive
whenever you seek recommendations about the market or trading strategies. If an
Account Executive has not already been assigned to you, please call (888) 556-5699.
And if you want to make special requests of Customer
Service—such as requesting document or wire delivery or executing certain account
transactions such as withdrawals or deposits—please call (888) 556-5699 between 7
a.m. to 5:00 p.m. or use our Web site to E-mail Alpha One Trading at
info@Alpahonetrading.com at any time day or night.
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Alpha One Trading is at the
forefront of electronic trading. Our online service, ALARONLINE, provides you 24-hour
access to your trading account through your personal computer. Convenient, private and
secure, ALARONLINE offers yet another method for trading futures and options.
ALARONLINE is designed to allow
traders flexibility and convenience by providing them timely market information and direct
order placement through their computers. Whether you are at work or home, ALARONLINE
allows you to:
Place orders;
Monitor your account;
Check your open positions;
View your daily account statement;
Confirm account balances; and
Access real-time quotes.
Alpha One Trading Customer Service representatives are
available to help you Monday through Friday, 7:00 a.m. to 5:00 p.m. at (888)
556-5699. Of course, you can always contact us—day or night—through the
Alpha One Trading.com Web site by either E-mailing us or by notifying us that you want us
to phone you. General information and assistance on order placement are available 24
hours a day, 365 days a year.
The following pages feature a user’s guide spotlighting
step-by-step instructions for making trades or monitoring your account via ALARONLINE.
For your ease, we have grouped the steps by functions and have listed them as
answers to questions most commonly asked by online traders.
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What Are The Hardware and Software Requirements for Using ALARONLINE?
As long as your computer has an Internet connection, you
possess all the hardware and software you need to use ALARONLINE. ALARONLINE, which
uses Web-based trading, is accessed from our Web site, Alpha One Trading.com, and does not
require you to download any software.
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How Can I Preview
ALARONLINE?
To experience
the ALARONLINE trading program firsthand before you become an ALARONLINE client, click to
the far left of the Alpha One Trading.com header, on “Online Trading.”
At the dialog
screen requesting your account number and password, click “Demo Account” and
click “Login.” You will enter the demo version of ALARONLINE.
The demo
version will not provide real-time price quotes, but it will allow you to explore the
functionality of our system. You can use the demo version to place simulated trades,
to view simulated account balances, and to get comfortable placing trades online.
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How Can I
Open an ALARONLINE Account?
In compliance with the Commodity Futures Trading Commission,
individuals must complete and submit certain signed paperwork before opening an account.
Step 1. Complete Forms
You may
download the account forms by visiting Alpha One Trading.com and clicking on the
“Account Forms” button on the Alpha One Trading.com side bar. On the page
titled, “Opening an Account,” you can click Alaron Account Form to download the
necessary paperwork, including an additional risk disclosure form for your records.
The forms are
provided in Adobe Acrobat Reader. If you do not have Adobe Acrobat Reader software
loaded on your computer, you can download it free from the “Open an Account”
page.
If you are
already an Alpha One Trading client and are interested in online trading, download the
ALARONLINE Form from the “Open an Account” page.
If you do not
wish or are unable to download the necessary forms, you may use a link on the
“Opening an Account” page to request that we send you the forms via the U.S.
mail.
Of course, you
can always phone us at (888) 556-5699 or
E-mail us at info@Alphaonetrading.com to request the forms.
Step 2. Submit Forms
Alpha One Trading
550Paularino Ave
N107
Costa Mesa ca
92626
Step 3. Deposit Funds into Your ALARONLINE Account
Alpha One Trading has no minimum account balance. (We use
exchange minimum margins that are subject to change without notice, and these margin
balances must be maintained.) To open your account, you can send us a check
payable—in the amount you determine—to Alaron Trading or wire the funds to:
Harris Trust and
Savings
111 W. Monroe
Chicago, IL 60603
ABA#071-000-288
Credit:
Alaron Trading Corporation Customer Segregated Funds Account
Account
#165-083-7
Further credit
to: [Your name and account number]
How Do I Set and Change My ALARONLINE Password?
Once Alpha One
Trading has received your account form and approved your new account, an Alpha One Trading
Representative will phone you with an account number and will contact you via E-mail with
your ALARONLINE access code.
To change the
access code, phone (888) 556-5699 to contact Online Trading Technical Support (see How Can I Access
Online Trading Technical Support for ALARONLINE? below).
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How Do I Connect to
ALARONLINE?
ALARONLINE, which uses Web-based trading, is accessed from
our Web site, www.Alphaonetrading.com.
Once at our
Web site, click to the far left of the Alphaonrtrading.com header, on
“Onlinetrading.”
Enter your
account number and password and the dialog screen and click “Login.”
ALARONLINE
will open to an “Account Notices” page, listing the latest general information
that will help you trade, as well as any account messages specific to your account.
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What Type of Contracts Can I Trade Through ALARONLINE?
Alpha One Trading is at the forefront of electronic trading.
Our online service, ALARONLINE, provides you with 24-hour access to your trading
account through your personal computer. ALARONLINE is another convenient, private,
and efficient method for the trading of futures and options. The following list of
available contracts and codes for live Quotes is subject to change.
Indices
CODES |
Currencies |
Financials |
Metals |
S&P 500
SP |
Japanese
Yen JY |
T-Bonds
US |
Gold
GC |
E-mini S&P 500
EN |
Swiss
Franc
SF |
Eurodollar
ED |
Silver
SI |
NASDAQ 100
NQ |
Deutsche
Mark DM |
Euroyen
EY |
HG Copper HG |
E-mini NASDAQ EN |
British
Pound
BP |
T-Notes
TY |
Platinum
PL |
Dow
Futures DJ |
Canadian
Dollar CD |
T-Bills
TB |
Palladium PA |
NYFE
YX |
Euro
Currency EU |
Muni
MB |
|
Internet Index
IS |
Mexican
Peso
ME |
German Bund |
|
Nikkei
NK |
Australian
Dollar AD |
|
|
Russell
2000 RT |
U.S. Dollar
Index DX |
|
|
CRB
CR |
E-mini Euro Currency M7 |
|
|
MidCap
400 MD |
E-mini Japanese Yen JE |
|
|
KCVL
VL |
|
|
|
Energies |
Meats |
Grains |
Softs |
Crude
Oil CL |
Live
Cattle LC |
Soybeans
S |
Cocoa
CO |
Heating
Oil HO |
Lean
Hog LH |
Wheat
W |
Sugar
SB |
Unleaded Gas HU |
Pork
Bellies PB |
Corn
C |
Coffee
KC |
Natural
Gas NG |
Feeder
Cattle FC |
Oats
O |
Cotton
CT |
Propane
PN |
|
Soy
Meal SM |
Orange Juice OJ |
|
|
Soy
Oil BO |
Lumber
LB |
|
|
KC
Wheat KW |
|
|
|
MW
Wheat MW |
|
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What Types of Orders Can I Place Through ALARONLINE?
These orders can be placed for futures and options trades:
Market Order
Order that does not
specify a price; executed at the best possible price currently available.
Market if Touched (MIT) Order
A “market if touched” order specifies a price, but MIT orders become market
orders once the market reaches or passes through the limit price. This order may be
executed at, above or below the originally specified price; “MIT buy” orders are
placed below the current price, while “MIT sell” orders are placed above the
current price.
Market on Close (MOC) order
Order executed during the final minutes of trading at the best possible price.
“Or Better” (OB) Order
This order obligates the pit broker to secure the best possible price for the customer;
think of it as a market order with a limit. If an order is not designated with
an OB and the current market price is close to the price specified in the order, the pit
broker may question the runner to determine whether the order should have been a stop
order. In this case, the order may be returned for clarification, which could
delay execution of the order and could change the results of the fill.
Market on Opening (MOO) Order
Order executed during the opening range of trading at the best possible price obtainable
within the opening range.
Stop Order
Stop orders become market orders and are then executed only when the market trades at a
specified price. Stop orders can be used to minimize a loss on a long or short
position, to protect a profit on an existing long position or short position, or to
initiate a new long or short position. A “buy stop” order is placed
above the current price; a “sell stop” order is placed below the market.
Spread Order
Placing two or more opposite orders in an attempt to gain more price control by
maintaining counterbalancing long and short positions in different contracts or in
different months within the same contract; also an order to buy and sell two different
contracts at a specified differential. Traders use spread to gain
arbitrage—simultaneous purchase and sale of futures or options contracts that seeks
to benefit from price variations.
You must also designate each order as a day or open order:
Day Order
Day orders expire if they cannot be executed (e.g., the market price does not reach or
pass through the limit price of the order) on the day they were placed.
Open Order
Open orders continue to exist until they are executed. If an open order cannot
be executed on the day it is placed (e.g., because the market price does not reach or pass
through the limit price of the order) it will be filled on the next trading day or stay
open until it can be filled, is canceled or the contract expires.
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How Can I Research
Trades?
Alpha One Trading.com is a comprehensive and valuable Web
site, offering all the reference and information tools you need to master futures and
options trading and manage your account.
1.
From the home page, click on the left side bar to identify contract types and
abbreviations and to check current margins and contract specifications, including each
contract’s trading hours, point values, tick fluctuations, sizes and initial
maintenance and spread margins.
2.
Click on the Daily Research button on the Alphaonetrading.com header to read
daily reports written by our own in-house experts about all the futures and options
sectors.
3.
Click on the Futures News button on the Alphaonetrading.com header to read
full-text news stories and updates on developments and market performance from Futures
World News.
4.
When you are logged into your account, check up-to-the-clickSM
price quotes with ALARONLINE.
From ALARONLINE, click on Quick Quotes, type in the abbreviation of the
contract for which you are seeking price information on and click "Get Quote."
(To find the appropriate contract abbreviation, click on contract symbols on the
Alphaonetrading.com home page.)
- To enter a
futures quote, enter the futures contract symbol followed by the month symbol and a
one-digit number for the year. For example, a March S&P 500 futures contract would be
SPH0; a March soybeans futures contract would be SH0.
- To enter an
options quote, enter the contract symbol as noted above followed by a "space,"
then enter the strike price followed by a P (put) or a C (call). For example, a December
2000 S&P 1400 call would be SPZ0 1400C; a November 2000 soybeans 525 put would be SX0
525P.
5.
Check futures price charts by clicking the Quotes and
Charts button on the Alphaonetrading.com header, selecting the futures contract type from
the list that appears and then clicking the contract name.
You can modify the chart that appears by changing the period it covers to
daily, weekly, monthly or even intraday.
You can also change the chart study to moving average, stochastic, relative
strength index or movement index charts.
You can change the chart type to bar, candle or line charts.
You can adjust the chart density and size.
After modifying chart parameters, click on “Reset Values.”
If you wish to chart price performance for another futures contract, type the
abbreviation in the “Contract” box or select the futures contract name and date
from the pull-down menus and click “Get Chart.”
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How Can I
Create an Automated Quote Page for Checking Contracts That I Wish to Monitor?
Click Online
Quotes.
Type in the
abbreviations denoting the contracts for which you plan to regularly seek price
information.
To enter a futures quote, enter the futures contract symbol followed by the month symbol
and a one-digit number for the year. For example, a December S&P 500 futures
contract would be SPZ0; a November soybeans futures contract would be SX0.
To enter an options quote, enter the contract symbol as noted above followed by a
“space,” then enter the strike price followed by a P (put) or a C (call).
For example, a December 2000 S&P 1400 call would be SPZ0 1400C; a November soybeans
525 put would be SX0 525P.
You may enter
up to 21 contract abbreviations.
When you have
finished entering the contract abbreviations click “Save and Refresh.”
The latest, up-to-the-clickSM price quotes will appear.
Once this page
is programmed, you can click here at any time to simultaneously view the latest quotes for
these contracts. Click “Refresh” to bring up the latest quotes.
To change
contracts, enter new contract names and click “Save and Refresh.”
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How Can I Place Trade
Orders?
ALARONLINE uses four primary order forms for the placement of
all electronic orders: a futures order, an options order, a futures spread order and
an options spread order. Orders placed electronically after trading hours will be executed
the next trading day. To place orders OTHER THAN online orders, customers can contact
Alpha one trading 24-hour Trade Desk at (888) 556-5699, 7 days a week.
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Futures Order
1.
Click Futures Order.
2.
Click buy or sell.
3.
Select the contract you wish to trade from the pull-down
menu under “Contract.” The contracts are listed by categories, with the
abbreviation for the market at which the contract is traded listed behind each contract
name.
4.
Use the pull-down menus to select the month and year of the
contract.
5.
Enter the quantity of contracts you wish to trade.
6.
Select the order type from the pull-down menu.
7.
Enter the price at which you want to trade the contract.
When entering a
price, do not enter a decimal point. (See What Types of Orders Can I Trade Through
ALARONLINE? for more information about the different types of orders described below.)
Do not enter a
price if you are placing a “market,” “market on close” or “market
on open” order. The market price will be the price at which your order is executed.
If placing an
“MIT” or “market if touched” order, the order will be executed at the
market price once the market reaches the price you specify.
If placing an
“or better” order, the order will be executed at the price you specify or, if
the market outperforms your bid or offer, a more advantageous price.
If placing a
“stop” order, your order will be executed at the market only when the market
trades at the price you specify. A “buy stop” order is placed above the
current price; a “sell stop” order is placed below the market.
8.
Select day or open order. Day orders expire at the
end of the trading session; open orders remain until they are executed, are canceled or
the contract expires.
9.
Select day or night from the pull-down menu for “Trd.
Session”
10. Click
“Preview Order.”
11. A
preview summary indicates whether the order is complete or additional data must be
entered. The “Order Preview” summarizes the order and indicates the
latest tick on the contract.
12. Click
“Edit Order” to alter your trade or “Submit Order” to approve it.
13. Once
you click “Submit Order,” your order will be routed for execution. An
“Order Status” form will appear, indicating the number of your
order.
14. You
may click “Working Orders” on the “Order Status” form to view, cancel
or alter any pending orders listed on the Working Orders page.
15. Check
Today’s Fills to view the price at which your order was executed.
16. Click
“Update Information.” This page shows the profit/loss of the futures trade up to
the clickSM.
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Options Order
1.
Click Options Order.
2.
Follow Steps 1–9 as listed in the Futures Order instructions.
3.
Enter a strike price for the options contract.
4.
Click put or call for the options contract.
5.
Click open or close for the options contract.
6.
Follow Steps 10–16 as listed in the Futures Order instructions.
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Futures Spread Order
1.
Click Futures Spread Order.
2.
For Leg 1 of the spread order:
Select the
contract you wish to trade from the pull-down menu under “Contract.” The
contracts are listed by categories, with the abbreviation for the market at which the
contract is traded listed behind each contract name.
Use the
pull-down menus to select the month and year of the contract.
3.
Perform Step 2 for Leg 2, and if necessary, Leg 3 of the
spread order.
4.
Click buy or sell for Leg 2, and if necessary, Leg 3 of the
spread order
5.
Enter the quantity of contracts you wish to trade in each
of the legs.
6.
Select the order type from the pull-down menu.
7.
Enter the premium (the cost difference you desire between
the contracts).
8.
Select the leg of the spread order to which you want the
premium applied.
9.
Select day or open order. Day orders expire at the
end of the trading session; open orders remain until they are executed, are canceled or
the contract expires.
10. Select
day or night from the pull-down menu for “Trd. Session”
11. Click
“Preview Order.”
12. A
preview summary indicates whether the order is complete or additional data must be
entered. The “Order Preview” summarizes the order and indicates the
latest tick on the contract.
13. Click
“Edit Order” to alter your trade or “Submit Order” to approve it.
14. Once
you click “Submit Order,” your order will be routed for execution. An
“Order Status” form will appear, indicating the number of your order.
15. You
may click “Working Orders” on the “Order Status” form to view, cancel
or alter any pending orders listed on the Working Orders page.
16. Check
Today’s Fills to view the price at which your order was executed.
17. Click
“Update Information.” This page shows the value of the option.
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Options Spread Order
1.
Click Options Spread Order.
2.
Follow all the steps listed in the Futures Spread Order instructions, being sure to enter strike prices
for the contracts at Step 2 and after Step 5.
3.
Enter the strike price for the options in each of the legs.
4.
Click put or call for each of the legs.
5.
Click open or close for each of the legs.
6.
Enter the premium (the cost difference you desire between
the contracts).
7.
Select the leg of the spread order to which you want the
premium applied.
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What
Happens To My Trade Order Once I Place It?
Once you submit an online order, your order is routed
electronically through Alaronline
to the appropriate exchange, where it is filled per
your instructions (if possible). When your order is executed, the fill is confirmed
to your account.
For certain contracts including the E-mini S&P 500 and
the E-mini NASDAQ 100, trades are executed in GLOBEX2, the exchange’s computer
system; other electronically traded contracts are executed in other electronic trading
systems. In the future, still other contracts will be executed via computer trading
to allow for faster order-fill response.
For those contracts that remain “pit traded,”
ALARONLINE employs a technologically advanced order-routing system that delivers the order
directly to the broker’s computer terminal in the trading pit or in an area adjacent
to it.
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How Can I Confirm That My Trades Have Been Executed?
Click
Today’s Fills.
Click
“Update Information” to view the orders that have been executed. This page
shows the profit/loss of the futures trade or the value of the option.
Those orders
that have been placed but not yet executed will be posted on the Working Orders page.
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How Can
I Change or Cancel My Trade Orders?
Orders not yet
executed can be canceled or modified from the Working Orders page.
From the list
of pending orders, click on the order number you wish to cancel or change.
Click
“Cancel” or “Cancel/Replace.”
Modify the
order as you wish; click “Order Preview” and then “Submit Order.”
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How Can I Check
My Open Positions?
How Can I View
My Daily Statements?
Click
Today’s Statement. You can print this page for your records.
Please report
any account discrepancies immediately. The failure to immediately exercise your
right to have errors corrected may be deemed your agreement that your account is correct
and ratified. However, accounts are subject to Alaron’s corrections or
adjustments at any time.
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How Can I
Confirm Account Balances?
How
Can I Deposit Funds to My ALARONLINE Account?
You can wire funds, send checks payable to Alaron Trading or
transfer other trading accounts into your ALARONLINE account.
Option 1. Wire Funds
You should wire funds to:
Harris Trust and Savings
111 W. Monroe
Chicago, IL 60603
ABA#071-000-288
Credit: Alaron Trading Corporation Customer Segregated
Funds Account
Account #165-083-7
Further credit to: [Your name and
account number]
Option 2. Send Checks
You can send checks payable to Alaron Trading to:
Alaron Trading Corporation
822 W. Washington Blvd.
Chicago, IL 60607
When depositing funds by check, please be sure to include
your Alaron account number on the check.
Option 3. Transfer Accounts
You may transfer another trading account from another trading
firm into your ALARONLINE account. Such a transaction should transfer within three
days all the cash balances, open positions, Treasury Bills and collateral. To obtain
the form necessary to execute such a transfer, contact your Alpha One Trading Account
Executive or Customer Service at (888) 556-5699.
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How Can I Withdraw Funds From My ALARONLINE Account?
To request funds from your account or send you a check from
your account balance:
1.
Call Alpha One Trading Customer Service at (8888) 556-5699
between 7 a.m. and 5:00 p.m. CST.
OR
2.
Contact your Alpha One Trading Account Executive.
OR
3.
E-mail Alaron at info@Alphaonetrading.com at any time day
or night.
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How Can I Access Online Trading Technical Support for ALARONLINE?
Alpha One Trading Online Trading Technical Support can answer
your questions about using the Web site and the online trading program or executing online
trades.
Please remember that Online Trading Technical Support cannot
provide market recommendations. Contact your Alpha One Trading Account Executive
with all questions regarding trading advice. If an Account Executive has not already
been assigned to you, please call (8888) 556-5699.
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How Can I Access Broker Assistance for Online Trading?
When you trade via ALARONLINE, you benefit from the services
of an Alpha One Trading Account Executive. Contact your Alpha One Trading Account
Executive whenever you seek recommendations about the market or trading strategies.
If an Account Executive has not already been assigned to you, please call (888)
556-5699.
If you trade online without an Alpha One Trading Account
Executive, you may contact any Alpha One Trading account executive for assistance.
We know you will find trading with Alpha One Trading and
ALARONLINE an efficient, cost-effective and convenient experience. We look forward
to providing you the tools and expertise you need to make the most informed trades.
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Account Executive |
Your Alpha One Trading broker. Alpha One
Trading Account Executives are available to discuss your trading objectives and to tailor
their services and commission rates to best suit your unique needs. Broker services
range from monitoring active day traders’ order flow and market discipline to
patiently educating new traders as they develop their own trading styles. ALARONLINE
customers are encouraged to treat their accounts as broker-assisted accounts; the accounts
are a hybrid of traditional broker assistance. They allow customers to discuss
trading strategies, money management ideas, and stop loss placement with Alpha One Trading
Account Executives, while providing the convenience of self-directed online orders. |
actuals |
physical commodities; also cash commodities;
the commodities (pork bellies, wheat, etc.) or instruments (stocks, currencies, etc.)
“behind” or underlying the futures contracts or options being
traded. Delivery of actuals rarely results from futures trading—profits
are made by buying or selling offsetting futures contracts prior to the delivery date and
most futures contracts are liquidated (sold) or settled for cash. |
ALARONLINE |
State of the art online trading platform which
includes FREE research, quotes & charts, futures news, and up to the clickSM account
balances. |
arbitrage |
simultaneous purchase and sale of commodities
that seeks to benefit from price variations. Arbitrage is executed through a
“spread” between commodities, futures or options. Some arbitrage
strategies seek to exploit price differences across the same commodity, futures contract
or option being delivered in different months or being traded on different exchanges,
others target anticipated price differences across commodities, futures or options. |
at the money |
said of an option with a strike price
equal—or roughly equal—to the current price of the underlying futures
contract. Given the premium paid for an option, at-the-money options are not worth
exercising and are usually allowed to expire. |
basis |
the variance between the price of a futures
contract and the cash price of the commodity or instrument; basis reflects supply and
demand and carrying costs. |
bearish |
said of a trading outlook or strategy that
anticipates a decline in prices. |
beta |
measures the correlation between the movement
of a stock or index and the movement of the overall stock market. |
bid |
price at which a party is willing to buy
futures and options. |
break-even point |
futures price at which exercising an option
allows the trader to recoup the cost of the option’s premium but does not create a
profit. Traders break even on call options when the futures price is equal to the
strike price plus the premium; they break even on put options when the futures price
equals the strike price minus the premium. |
broker |
representative acting as an agent in customer
trades. Brokers may only execute orders for a customer or may also advise a customer
on trading information and trading actions. See Account Executive. |
bullish |
said of a trading outlook or strategy that
anticipates a rise in prices. |
call option |
right—not an obligation—to buy a
futures contract at a specific price; purchased when the trader believes the price of a
futures contract will rise above the option’s exercise price. For the writer of
a call option, the contract represents an obligation to sell the futures contract if the
option is assigned. |
carrying charges |
costs incurred by holding actuals (the
physical commodity); includes costs associated with storage, insurance and warehousing. |
cash settlement |
process by which the terms of a futures or
options contract are fulfilled through the payment or receipt in dollars of the amount by
which the futures or options contract is in the money. For example, quarterly index
options and futures contracts that remain in the money on the last trading day are
actually settled in cash for their in-the-money value (the underlying stocks are not
delivered). See actuals. |
CFTC |
Commodity Futures Trading Commission; the
federal regulatory agency charged with regulating futures trading. |
clearinghouse |
division of an exchange that adjusts and
clears all executed buy and sell orders; acts as an intermediary; is the buyer to all
sellers and the seller to all buyers. |
clearing member |
a member of a clearinghouse; all buy and sell
orders must be registered and eventually settled through a clearing member. |
close |
period at the end of the trading session,
officially designated by the exchange. |
commission |
fee charged by a broker to a customer for
performance of a specific duty, such as the buying or selling of futures contracts. |
contract |
a unit of trading for commodity futures or
options. |
contract month |
see delivery month. |
convergence |
the tendency for prices of actuals and futures
contracts to approach one another; usually occurs near or during the delivery month. |
conversion |
a position created in futures contracts (with
the same exercise price and expiration date) by selling a call option, buying a put option
and buying the underlying futures contract. |
cross-hedge |
hedging a cash market position in a futures
contract for a different but price-related commodity. |
CTA |
commodity trading advisor; operates as a money
manager for managed futures accounts; paid to issue analyses or reports on commodities;
may trade a system. |
daily price limits |
maximum price advance or decline that a
futures contract may move in one trading session from the previous day’s closing
price; set by the exchange. Once a price has increased (or declined) by its daily
limit, no trading can occur at a higher (or lower, if declined) price until the next day
of trading. |
day order |
expires if it cannot be executed (e.g., the
market price does not reach or pass through the limit price of the order) on the day it
was placed. |
day trading |
short-term trading strategy under which
traders liquidate or close out all positions within a day’s trading session; these
traders do not carry open positions overnight. |
delivery |
the tender and receipt of an actual commodity
or cash upon the expiration date of a futures contract. |
delivery month |
the futures contract month in which the
futures contract must be fulfilled with delivery or cash settlement if the contract is
held to expiration. |
delta |
measures the degree to which an option premium
will be affected by a change in the price of the underlying futures contract.
Options that are in the money are more likely to move in response to changes in the
underlying futures price than options that are at or out of the money. |
derivative |
financial instruments or arrangements that
derive their value from an underlying stock, bond, commodity or other asset.
Futures, swaps, some forwards, options and warrants and certain mortgage-backed securities
are forms of derivatives. |
disclosure document |
document that must be provided to and signed
by prospective customers; describes fees, performance, etc. |
exercise |
electing to purchase (call) or sell (put) the
underlying futures contract at the option strike price. Only the option holder can
exercise an option; American-style options can be exercised anytime during the life
of an option. European-style options can be exercised only at a specified time prior
to expiration. |
exercise price |
strike price; predetermined price at which an
option holder may choose to exercise his or her option to buy (call) or sell (put) a
futures contract. |
expiration date |
last day to exercise or offset an
option. Options often expire on a month prior to the delivery month of the
underlying futures contract; once they expire, options no longer convey any rights. |
fill or kill order |
order instructing the floor broker to buy or
sell at a specified price; if the order cannot be filled immediately, it is immediately
canceled. |
first notice day |
the first day when “Notices of Intent to
Deliver” the physical commodity can be made by the seller to the clearinghouse and by
the clearinghouse to a buyer. |
floor broker |
a trader on an exchange floor who executes
trading orders for others. |
floor trader |
exchange member who executes his or her own
trades by being personally present in the trading pit or place for futures trading. |
fundamental analysis |
analysis of the value of futures or options
based on the elements of supply or demand or on “story-telling”
factors: weather and seasonality factors for commodities, government
statistics or reports for commodities and instruments, etc. |
futures commission merchant |
organization or individual that solicits or
accepts orders for the purchase or sale of any commodity for future delivery of any
contract market. An FCM accepts payment from or extends credit to those whose orders
are accepted. Alaron is an FCM. |
futures contract |
a commitment to make or take delivery of a
specific quantity and quality of a given commodity at a predetermined place and time in
the future. All contract terms—quantity, quality and time—are
standardized, with the price being set by open outcry in the pit on the trading floor of
the commodity exchange. |
hedge |
protect against price risk or change by making
counterbalancing investments. Typically, hedgers forgo an opportunity for greater
profits from a favorable price movement to protect themselves from the potential of an
opposite movement in price. For example, traders may hedge their investments in the
cash markets (such as the stock market) with opposite positions in the futures contracts
or options of the corresponding stock index. |
holder |
option buyer; decides whether to exercise an
option or allow it to expire. |
initial margin |
minimum funds required to be deposited by
those trading futures contracts at the time an order is placed to buy or sell a futures
contract. See margin and performance bond. |
in the money |
a call is in the money if its strike price is
below the current market price; a put is in the money if its strike price is above the
current market price. In-the-money options with a value above the break-even
point result in profit for traders and are typically exercised. All in-the-money
options are automatically exercised by the exchange after the close of trading on the last
day of trading. However, automatic exercise can be canceled if notice is given to
the exchange by 6 p.m. on the last day of trading prior to expiration. |
intrinsic value |
degree to which an option is in the money;
profit that could be realized by exercising an option with a given strike price. A
call option has intrinsic value if its strike price is below the futures price; a put
option has intrinsic value if its strike price is above the futures price.
Options out of or at the money have no intrinsic value; they are worthless. |
introducing broker |
IB; individual who is engaged in soliciting or
accepting orders for the purchase or sale of futures, and who—unlike a futures
commission merchant—does not accept payment or extend credit for any trades or
contracts. |
last trading day |
day on which trading ceases for the current
delivery month; varies by commodity or instrument. |
leverage |
ability to control large dollar amounts of a
commodity with a comparatively small amount of capital. |
limit order |
order to buy or sell at a designated price;
limit orders to buy are placed below the current price, while limit orders to sell are
placed above the current price. In most instances, a limit order will not be
executed until the market trades above or below the limit price. |
local |
member of exchange who trades his own account
or fills orders for customers. |
long hedge |
purchase of futures against anticipated need
for a cash commodity to protect against an increase in the commodity’s value. |
long position |
when a trader has purchased futures or options
contracts without making an offsetting sale or offsetting options trade. Holders of
long positions profit from rising prices. |
maintenance margin |
minimum margin (on outstanding futures
contracts) that a customer must maintain. See margin, margin call and performance
bond. |
managed futures |
investment vehicle using an investment manager
(commodity trading advisor or CTA) to buy and sell futures and options on behalf of the
customer. Unlike the arrangement for other individual brokerage accounts, CTAs
(money managers) maintain total discretionary management of client assets in managed
futures accounts. Each individual investor must enter into an advisory agreement
with the commodity trading advisor and must deposit funds into a trading account based on
minimums the commodity trading advisor considers adequate to implement his or her programs
and to achieve proper account diversification. |
margin |
minimum funds required to be deposited by
those trading futures contracts. (Options are purchased with cash and do not require
traders to post margin.) Funds are deposited with brokers. In trading, margin
is used as a performance bond to ensure contract fulfillment; it is not a down payment for
purchases, as in the securities industry. Losses resulting from trading are
subtracted each day when the account is marked to market. Any resulting gains may be
withdrawn from the account. The exchange sets the margin for brokerage firms, which
in turn set margin for customers. |
margin call |
notice that a customer must deposit additional
funds to maintain “maintenance margin” in his or her account. Margin calls
are made when a change in price results in losses on a customer’s open position and
reduces the account below minimum margin requirements. |
marked to market |
when trading accounts are credited or charged
based on the profit or loss created by price changes affecting open positions.
Accounts are marked to market for each day’s trading session. |
market on close (MOC) order |
order executed during the final minutes of
trading at the best possible price. |
market on opening (MOO) order |
order executed during the opening range of
trading at the best possible price obtainable within the opening range. |
market order |
order that does not specify a price; executed
at the best possible price currently available. |
MIT order |
as with a limit order, “market if
touched” specifies a price, but MIT orders become market orders once the market
reaches or passes through the limit price. This order may be executed at, above or
below the originally specified price; “MIT buy” orders are placed below the
current price, while “MIT sell” orders are placed above the current price. |
NFA |
National Futures Association; a
self-regulatory organization for the U.S. futures industry committed to protecting the
rights of investors in the futures markets. |
offer |
indicated willingness to sell a futures
contract or option at a given price. |
offset |
liquidate or purchase futures contracts
through the sale of an equal number of contracts of the same delivery month, or covering a
short sale of futures through the purchase of an equal number of contracts of the same
delivery month. |
one cancels the other (OCO) order |
a combination of two orders written on one
order ticket instructing the floor broker to cancel the remaining side of the order when
one side is executed. The customer eliminates the possibility of a double fill by
placing both instructions on one ticket rather than two. |
opening range |
range of prices at which buy and sell
transactions took place during the opening of the market. |
open interest |
total number of futures contracts or options
outstanding on a given commodity. Markets with high open interest are more liquid. |
open order |
continues to exist until it is executed.
If an open order cannot be executed on the day it is placed (e.g., because the market
price does not reach or pass through the limit price of the order) it will be filled on
the next trading day or stay open until it can be filled, is canceled or the contract
expires. |
open outcry |
method of public auction for making bids and
offers in the trading pits of futures exchanges. |
open trade equity |
unrealized gain or loss on open positions. |
option |
the right—not the obligation—to
purchase (call option) or sell (put option) a futures contract at a stated price at any
time before a specified date. Options are bought and sold at a premium—a price
agreed to through open competition between buyers and sellers. Traders buy calls and
sell puts when they believe futures prices will increase; they buy puts and sell calls
when they believe futures prices will decrease. |
“or better” order |
obligates the pit broker to secure the best
possible price for the customer; think of it as a market order with a limit. If an
order is not designated with an OB and the current market price is close to the price
specified in the order, the pit broker may question the runner to determine whether the
order should have been a stop order. In this case, the order may be returned for
clarification, which could delay execution of the order and could change the results of
the fill. |
out of the money |
said of an option with no intrinsic
value. These options are not worth exercising because their strike price is either
below current market price in the case of long puts, or above current market price in the
case of long calls. |
out trade |
trade that cannot be cleared by a
clearinghouse because the data submitted by the two clearing members involved in the trade
differ in some way. |
overbought |
technical opinion that the market price has
risen too steeply and too fast in relation to underlying fundamental factors. |
oversold |
technical opinion that the market price has
declined too steeply and too fast in relation to underlying fundamental factors. |
performance bond |
margin; minimum amount of funds required to be
deposited by those trading futures contracts. (Options are purchased with cash and
do not require traders to post margin.) In trading, margin is used as a performance
bond to ensure contract fulfillment. That is, losses resulting from contract trading
are subtracted from a margin account each day when the account is marked to market.
A performance bond is typically around 10% of a position’s value. |
pit |
area on the trading floor of some exchanges
where trading in futures contracts or options is conducted by open outcry. |
point |
see tick. |
position trading |
buying or selling contracts and holding them
for an extended period of time; opposite of day trading. |
premium |
price of an option; agreed to through open
competition between buyers and sellers. The maximum amount an option buyer can
lose. Premium does not include related brokerage commission fees. |
put option |
right—not an obligation—to sell a
futures contract at a specific price; purchased when the trader believes the price of a
futures contract will decline below the option’s exercise price. |
pyramiding |
using unrealized profits on existing futures
positions as margin to increase the size of the position, normally in successively smaller
increments. |
round turn |
completed futures transaction involving both a
purchase and a liquidating sale, or a sale followed by a covered purchase. |
scalper |
trader who trades for small, short-term
profits during the course of a trading session, rarely carrying a position overnight; see
day trading. |
settlement price |
daily price at which the clearinghouse settles
all accounts between clearing members for each contract month. Settlement prices are
used to determine both margin calls and invoice prices for deliveries. The term also
refers to a price established by the clearing organization to calculate account values and
determine margins for those positions still held and not yet liquidated. |
short hedge |
sale of futures against ownership of a cash
commodity to protect against decline in the commodity’s value. |
short position |
when a trader has sold open contracts or
written an option without making an offsetting purchase or option trade. Holders of
short positions profit when prices fall in the case of futures and calls. Short puts
profit from a rise in prices. |
softs |
a category of food and fabric
commodities: sugar, cocoa, coffee, orange juice, cotton and lumber. |
speculate |
assume—and seek to profit from—the
risk associated with price fluctuations of commodities and instruments over time.
Speculators may be the general public or may be floor traders operating as exchange
members in the trading pits. |
spot price |
current market price of the underlying
instrument; cash price. |
spread |
price difference between long positions and
short positions in different contracts or in different months within the same contracts;
also an order to buy and sell two different contracts at a specified differential.
Traders use spread to gain arbitrage—simultaneous purchase and sale of contracts that
seeks to benefit from price variations. |
stop close only order |
an order for which a stop price will be
triggered only if the market reaches the stop during the close of trading. While
this type of order can protect a customer from the order being executed during adverse
price fluctuations during the day, it may cause the order to be executed at an undesirable
price in a fast market during the last few minutes of trading. |
stop limit order |
an order that specifies two prices in an
attempt to gain more control over the price at which the stop is executed. The
first part of the order is written as a stop order; the second part of the order specifies
a limit price. A stop limit order indicates that once the stop is triggered, the
customer does not wish to have the order executed beyond the limit price. Stop limit
orders should typically not be used when trying to exit a position. |
stop order |
stop orders become market orders and are then
executed only when the market trades at a specified price. Stop orders can be used
to minimize a loss on a long or short position, to protect a profit on an existing long
position or short position, or to initiate a new long or short position. A “buy
stop” order is placed above the current price; a “sell stop” order is
placed below. |
straddle |
the purchase of both a put and a call with the
same exercise price, expiration date, and underlying instrument. |
strangle |
the purchase of a put and a call with the same
expiration date and underlying instrument but different exercise prices. |
strike price |
exercise price; predetermined price at which
an options holder may choose to exercise his or her option to buy (call) or sell (put) a
futures contract. |
T-bills |
Treasury bills; short-term U.S. government
obligations, generally issued with 13-, 26- or 52-week maturities. |
T-bond |
Treasury bonds; long-term obligations of the
U.S. government that pay interest semiannually until they mature or are called, at which
time the principal and the final interest payment are paid to the investor. |
technical analysis |
analysis of the value of a futures contract or
option based on price patterns, price charts or market elements such as volatility,
volume, etc. |
theta |
measures the sensitivity of the value of an
option to the passage of time. |
tick |
the minimal fluctuation recognized in the
price of a futures contract or option; the unit of measure for all price movement on
contracts. Set by the exchanges, ticks vary by commodity, instrument and
contract. The tick for live cattle futures is .025 cents a pound and thus valued at
$10 a tick; the tick for S&P 500 index futures is .05 index points and valued at $25 a
contract. Also known as a point. |
time value |
equal to an option’s premium minus its
intrinsic value. The time value of an option is greater the farther in the future it
expires and the greater the volatility of the underlying futures price—these factors
make it more likely that an option will be in the money before it expires. Time
value erodes as an option nears its expiration date. |
Treasury Notes |
medium-term obligations of the U.S. government
that pay interest semiannually until they mature. |
uncovered sale |
selling an option without a position in the
underlying futures contract. |
underlying futures contract |
futures contract that the option conveys the
right to buy (in the case of a call) or sell ( in the case of a put). |
up to the clickSM |
ALARONLINE’s unique and speedy system for
providing immediate access to the latest price quotes and for crediting profits and
charging losses to a customer’s online account. |
volatility |
measurement of the change in price over a
given time. |
volume |
number of contracts traded in a specified
period of time. Volume indicates the liquidity of a market—the number of
willing buyers and sellers. |
writer |
option seller; obligated to buy or sell a
futures contract if an option holder exercises the option. |
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