Glossary
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| Call An options contract, giving the buyer the right to buy a specific amount of an underlying at a fixed price on or before a specified date (physical delivery). The right to physical delivery can be substituted by a cash settlement (stock index derivate). |
| Cash Settlement The settlement of a contract by the payment or receipt of a cash sum instead of the physical delivery of the underlying. In the case of an option contract the cash settlement is determined by the difference between the strike price of the option and the closing market price of the underlying asset. In the case of a financial future contract the cash settlement is determined by the difference between the closing market price and the daily settlement price of the contract the day before. |
| CFTC The "Commodity Futures Trading Commission" is a U.S. federal regulatory agency that protects investors from fraud and manipulation in the derivates market. |
| Commodity Trading Advisor (CTA) A manager (company or individual) specializing in the currency or commodity futures markets. |
| Conversion Creation of a synthetic short future position by the writing of calls or the purchase of puts with the same strike price and expiry date with simultaneous entry of a "real" long future position (the opposite of a reversal). |
| Correlation A ratio for the degree of interdependence of two strategies or benchmarks. A perfect correlation is signified by the number 1.00, while for a completely negative correlation -1.00 is used. |
| Correlation Coefficient Used to measure the synchronization between two financial instruments. Systematically employed it can reduce the market risk of an instrument by comparing either a negative correlative security or a counter position of a positive correlative instrument. |