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Definition of Contract
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
A formal written statement of the rights and obligations of each party to a transaction.
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Futures contracts, such as stock index futures, that settle for cash, not involving
Similar to equipment trust certificates except that the lender is either the
The month in which futures contracts may be satisfied by making or accepting a delivery.
A guaranteed investment contract where the credit rating is tied to some variable
A cash market transaction in which delivery of the commodity is deferred until after the
In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to
Agreement to buy or sell a set number of shares of a specific stock in a designated future
A constant, set by an exchange, which when multiplied by the futures price gives
A contract promising a stated nominal interest rate over some specific time
A pure investment product in which a life company agrees, for a
A contract that obligates a purchaser of a project's output to make cash
When several futures contracts are considered, the contract settling last.
When several futures contracts are considered, the contract with the closest
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
contracts which have been bought or sold without the transaction having been completed by
The contract that balances the three types of agency costs (contracting, monitoring, and
A contract that, in exchange for the option price, gives the option buyer the right, but not
Options contract multiple
A constant, set at $100, which when multiplied by the cash index value gives the
Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals
A contract that obligates the purchaser to take any product that is offered to it (and pay
Turnkey construction contract
A type of construction contract under which the construction firm is
A guaranteed investment contract purchased with deposits over some future designated
an external party that has been granted an outsourcing contract to produce a part or component for an entity
an external party that has been granted an
a contract in which the customer agrees
Agreement to buy or sell an asset in the future at an agreed price.
Exchange-traded promise to buy or sell an asset in the future at a prespecified price.
A contract in which the seller agrees to provide something to a buyer at a specified future date at an agreed price.
An unwritten understanding between two groups, such as an understanding between an employer and employees that employees will receive a stable wage despite business cycle activity.
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
McNamara-O'Hara Service Contract Act of 1965
A federal Act requiring federal contractors to pay those employees working on a federal contract at
Walsh-Healey Public Contracts Act of 1936
A federal Act that forces government contractors to comply with the governmentâ€™s minimum wage and hour rules.
A contract accounting method that recognizes contract revenue
Method of accounting for sales or service agreements where completion
The physical commodity underlying a futures contract. Cash commodity, physical.
A promise to sell an asset before the seller has lined up purchase of the asset. This
An option contract that can be exercised at any time between the date of purchase and
A security that is collateralized by loans, leases, receivables, or installment contracts
contracts with trigger points that, when crossed, automatically generate buying or selling of
Regarding a futures contract, the difference between the cash price and the futures price observed in the
Bill of lading
A contract between the exporter and a transportation company in which the latter agrees to
A contract for privately placed debt.
A contractual provision in a bond indenture. A positive covenant requires certain actions, and
The contract that sets forth the promises of a corporate bond issuer and the rights of
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
An option that gives the right to buy the underlying futures contract.
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A loose quantity term sometimes used to describe a the amount of a commodity underlying one
The actual physical commodity, as distinguished from a futures contract.
The provision of some futures contracts that requires not delivery of underlying assets but
A transaction where exchange is immediate, as contrasted to a forward contract, which
Chicago Board Options Exchange. A securities exchange created in the early 1970s for the public
Cheapest to deliver issue
The acceptable Treasury security with the highest implied repo rate; the rate that a
A party to an explicit or implicit contract.
A firm which buys and sells future contracts for customer accounts. Related: futures
A trader is said to have a commitment when he assumes the obligation to accept or make
A commodity is food, metal, or another physical substance that investors buy or sell, usually via
Insurance that a construction contract will be successfully completed.
The movement of the price of a futures contract toward the price of the underlying cash
Rules set by the Chicago Board of Trade for determining the invoice price of each
The contractually specified price per share at which a convertible security can be
The risk that the other party to an agreement will default. In an options contract, the risk
The purchase of a contract to offset a previously established short position.
A short call option position in which the writer owns the number of shares of the underlying
The process of analyzing information on companies and bond issues in order to estimate the
The practice of hedging with a futures contract that is different from the underlying being
A financial future contract for the delivery of a specified foreign currency.
Currency risk sharing
An agreement by the parties to a transaction to share the currency risk associated with
The most distant months of a futures contract. A bond that sells at a discount and does not
The asset in a forward contract that will be delivered in the future at an agree-upon price.
The tender and receipt of an actual commodity or financial instrument in settlement of a futures contract.
The options available to the seller of an interest rate futures contract, including the quality
Those points designated by futures exchanges at which the financial instrument or
The price fixed by the Clearing house at which deliveries on futures are in invoiced; also the
contracts such as options and futures whose price is derived from the price of the
An option contract that can only be exercised on the expiration date.
Events of default
contractually specified events that allow lenders to demand immediate repayment of a debt.
The price at which the underlying future or options contract may be bought or sold.
Exercising the option
The act buying or selling the underlying asset via the option contract.
The time when the option contract ceases to exist (expires).
An expiration cycle relates to the dates on which options on a particular security expire. A
The equilibrium price for futures contracts. Also called the theoretical futures price, which equals
Events preceding and including bankruptcy, such as violation of loan contracts.
A contract entered into now that provides for the delivery of a specified asset in exchange
First notice day
The first day, varying by contracts and exchanges, on which notices of intent to deliver
Annuity contracts in which the insurance company or issuing financial institution pays a
The fee initially paid by the buyer upon entering a split-fee option contract.
A term used to designate all contracts covering the sale of financial instruments or physical
A term used to designate all contracts covering the sale of financial instruments or physical
Futures commission merchant
A firm or person engaged in soliciting or accepting and handling orders for
A market in which contracts for future delivery of a commodity or a security are bought or sold.
An option on a futures contract. Related: options on physicals.
The price at which the parties to a futures contract agree to transact on the settlement date.
A strategy designed to reduce investment risk using call options, put options, short selling, or futures
The risk of loss in foreign exchange trading that one party will deliver foreign exchange but the counterparty financial institution will fail to deliver its end of the contract. It is also referred to as settlement risk.
Implied repo rate
The rate that a seller of a futures contract can earn by buying an issue and then delivering
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