Glossary

An OPTION which can be exercised at any time between the purchase date and the EXPIRATION DATE. Contrast with EUROPEAN-STYLE OPTION. Given the greater flexibility offered by an American-style option, it is generally more costly than a European-style option.

Named for the American Petroleum Institute, API gravity is a measure of how dense a petroleum liquid is compared to water. If a petroleum liquid

A transport firm approved by an exchange to transport precious metals, e.g. GOLD, PALLADIUM, SILVER.

A facility, almost exclusively a warehouse, approved by an exchange for the delivery of commodities traded on the exchange. Another term is APPROVED WAREHOUSE.

A warehouse approved by an exchange for the delivery of commodities traded on the exchange. Another term is APPROVED DELIVERY FACILITY.

The practice of taking advantage of different prices for the same security in two or more markets by striking a combination of trades to capitalize on the imbalance; the resulting profit comes from the difference in prices between the markets traded in. Variations include the simultaneous purchase and sale of different delivery months of the same commodity; of the same delivery month, but different grades of the same commodity; and of different commodities. This term generally applies to securities alone, such as BONDS, COMMODITIES, currencies, DERIVATIVE instruments, and equities.

One who engages in ARBITRAGE.

An option whose exercise price is calculated as the average underlying price over the course of the option

An indication of willingness or a motion to sell a specified amount of a commodity at a specific price (also known as offer).

The price at which a seller is prepared to trade.