Word of the Day
Futures Terms that begin "L"
Last Notice Day
The final day on which notices of intent to deliver on futures contracts may be issued.
Leaps
Long-dated, exchange-traded options. Stands for 'Long-term Equity Anticipation Securities.'.
Leverage
Leverage and gearing effectively mean the same thing: the process or effect of 'gearing up' or magnifying exposure to an investment strategy, manager or asset. Leverage can be achieved by borrowing capital or using derivatives . A leveraged investment is subject to a multiplied effect in the profit or loss resulting from a comparatively small change in price. Thus leverage offers the opportunity to achieve enhanced returns, but at the same time can result in a loss that is proportionally greater than the amount invested.
Lifting a Leg
The closing of one side of a balanced position, thus exposing oneself to price movement.
Limit Order
An order in which a customer stipulates the maximum/minimum price acceptable.
Liquid Market
A market with numerous buyers and sellers trading, making for easy execution.
Liquidation
The closing out of a long position. The term is sometimes used to denote closing out a short position, but this is more often referred to as covering.
Lock-up
A time period during which a new investor in a fund may not withdraw any capital committed to the fund.
Long
1) the buying side of an open futures contract, 2) a person who has bought futures contracts that are still open.
Long the Basis
A person or firm that has bought the spot commodity and hedged with a sale of futures is said to be long the basis.
Top