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Crush Spread
A crush spread is a commodity trading strategy in which the trader takes a long position in soybean futures against short positions in soybean meal futures and soybean oil futures to establish a processing margin. Soybeans are processed into two products—meal and oil—through a process called “crushing”, which is where the term stems from. The crush spread is the difference between the combined value of meal and oil and the value of the original soybeans. The crush spread is a gauge of the soybean processor's profit margin, or the gross processing margin from crushing soybeans. Purposes The soybean processor will be interested in the crush spread as part of its hedging strategy, traders as part of its risk management strategy, speculators will look at the crush spread for trading opportunities. Soybeans processors can use the crush spread in order to lock in a gross profit margin, and cover the risk of adverse price fluctuation: inflation of soybeans inputs and deflatio ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commodity
In economics, a commodity is an economic goods, good, usually a resource, that specifically has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to who Production (economics), produced them. The price of a commodity good is typically determined as a function of its market as a whole: well-established physical commodities have actively traded spot market, spot and derivative (finance), derivative markets. The wide availability of commodities typically leads to smaller profit margins and diminishes the importance of factors (such as brand, brand name) other than price. Most commodities are raw materials, basic resources, agriculture, agricultural, or mining products, such as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such as chemical substance, chemicals and computer memory. Popular commodities include Petroleum, crude ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Risk Management
Risk management is the identification, evaluation, and prioritization of risks, followed by the minimization, monitoring, and control of the impact or probability of those risks occurring. Risks can come from various sources (i.e, Threat (security), threats) including uncertainty in Market environment, international markets, political instability, dangers of project failures (at any phase in design, development, production, or sustaining of life-cycles), legal liabilities, credit risk, accidents, Natural disaster, natural causes and disasters, deliberate attack from an adversary, or events of uncertain or unpredictable root cause analysis, root-cause. Retail traders also apply risk management by using fixed percentage position sizing and risk-to-reward frameworks to avoid large drawdowns and support consistent decision-making under pressure. There are two types of events viz. Risks and Opportunities. Negative events can be classified as risks while positive events are classifi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Spark Spread
The spark spread is the theoretical gross margin of a gas-fired power plant from selling a unit of electricity, having bought the fuel required to produce this unit of electricity. All other costs (operation and maintenance, capital and other financial costs) must be covered from the spark spread. The term was first coined by Tony West's trading team on the trading floor of National Power Ltd in Swindon, UK during the late 1990s and quickly came into common usage as other traders realised the trading and hedging opportunities. The terms dark spread, quark spread and bark spread refer to the similarly defined differences ("spreads") between cash streams for coal-fired power plants, nuclear power plants and bio-mass power plants, respectively. These indicators of power plant economics are useful for trading energy markets. For operating or investment decisions published "spread" data are not applicable. Local market conditions, actual plant efficiencies and other plant costs have to ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Crack Spread
Crack spread is a term used on the oil industry and futures trading for the differential between the price of crude oil and petroleum products extracted from it. The spread approximates the profit margin that an oil refinery can expect to make by " cracking" the long-chain hydrocarbons of crude oil into useful shorter-chain petroleum products. In the futures markets, the "crack spread" is a specific spread trade involving simultaneously buying and selling contracts in crude oil and one or more derivative products, typically gasoline and heating oil. Oil refineries may trade a crack spread to hedge the price risk of their operations, while speculators attempt to profit from changes in the oil/gasoline price differential. Factors affecting the crack spread One of the most important factors affecting the crack spread is the relative proportion of various petroleum products produced by a refinery. Refineries produce many products from crude oil, including gasoline, kerosene, die ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Spread Trade
In finance, a spread trade (also known as a relative value trade) is the simultaneous purchase of one security and sale of a related security, called legs, as a unit. Spread trades are usually executed with options or futures contracts as the legs, but other securities are sometimes used. They are executed to yield an overall net position whose value, called the spread, depends on the difference between the prices of the legs. Common spreads are priced and traded as a unit on futures exchanges rather than as individual legs, thus ensuring simultaneous execution and eliminating the execution risk of one leg executing but the other failing. Spread trades are executed to attempt to profit from the widening or narrowing of the spread, rather than from movement in the prices of the legs directly. Spreads are either "bought" or "sold" depending on whether the trade will profit from the widening or narrowing of the spread. Margin The volatility of the spread is typically much lower th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago Board Of Trade
The Chicago Board of Trade (CBOT), is an American futures exchange, futures and options exchange that was founded in 1848. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other exchanges (CME, NYMEX, and COMEX) now operate as designated contract markets (DCM) of the CME Group. History The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges. It was created as a centralized venue where buyers and sellers could meet to negotiate and formalize forward contracts. The idea originated from a conversation between Thomas Richmond and W. L. Whiting, who discussed the potential benefits of forming a board of trade. Their exchange led to a March 13 meeting of merchants and businessmen who supported the initiative, resulting in a resolution to create the institution and draft a constitution. A committee was then formed to develop bylaws, which were officially ad ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bushel
A bushel (abbreviation: bsh. or bu.) is an Imperial unit, imperial and United States customary units, US customary unit of volume, based upon an earlier measure of dry capacity. The old bushel was used mostly for agriculture, agricultural products, such as wheat: in modern usage, the volume is nominal, with bushels denoting a mass defined differently for each commodity. The name "bushel" is also used to translate similar units in other measurement systems. Name The word "bushel" as originally used for a container itself, and later a unit of measurement. The name comes from the Old French ' and ', meaning "little box".. It may further derive from Old French ', thus meaning "little butt (unit), butt". History The bushel is an intermediate value between the pound (mass), pound and ton or tun (unit), tun that was introduced to England following the Norman Conquest of England, Norman Conquest. Norman England, Norman Weights and Measures Acts (UK), statutes made the London ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dalian Commodity Exchange
The Dalian Commodity Exchange (DCE) () is a Chinese futures exchange based in Dalian, Liaoning province, China. It is a non-profit, self-regulating and membership legal entity under the China Securities Regulatory Commission (CSRC), established on February 28, 1993. Dalian Commodity Exchange trades in futures contracts underlined by a variety of agricultural and industrial produce on a national scale. As of 2015, DCE has listed a total of 16 futures products, including corn, corn starch, soybean (gmo and non-gmo), soybean meal, soybean oil, RBD palm olein, egg, fiberboard, blockboard, linear low-density polyethylene (LLDPE), polyvinyl chloride (PVC), polypropylene (PP), coke, coking coal and iron ore. Normal trading hours are Monday-Friday from 9am to 11:30am and 1:30pm to 3pm Beijing Time. The DCE is a member of the China Futures Association. Structure and function The exchange has the deepest liquidity pool among all Chinese Commodity Futures Exchanges. According to the Futur ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Metric Ton
The tonne ( or ; symbol: t) is a unit of mass equal to 1,000 kilograms. It is a non-SI unit accepted for use with SI. It is also referred to as a metric ton in the United States to distinguish it from the non-metric units of the short ton (United States customary units) and the long ton ( British imperial units). It is equivalent to approximately 2,204.6 pounds, 1.102 short tons, and 0.984 long tons. The official SI unit is the megagram (Mg), a less common way to express the same amount. Symbol and abbreviations The BIPM symbol for the tonne is t, adopted at the same time as the unit in 1879.Table 6 . BIPM. Retrieved on 2011-07-10. Its use is also official for the metric ton in the United States, having been adopted by the United States |
Chinese Yuan
The renminbi ( ; currency symbol, symbol: Yen and yuan sign, ¥; ISO 4217, ISO code: CNY; abbreviation: RMB), also known as the Chinese yuan, is the official currency of the China, People's Republic of China. The renminbi is issued by the People's Bank of China, the Central bank, monetary authority of China. It is the world's Template:Most traded currencies, fifth-most-traded currency as of April 2022. The Yuan (currency), yuan () is the basic unit of the renminbi. One yuan is divided into 10 Jiao (currency), jiao (), and the jiao is further subdivided into 10 Fen (currency), fen (). The word ''yuan'' is widely used to refer to the Chinese currency generally, especially in international contexts. Valuation Until 2005, the value of the renminbi was Fixed exchange-rate system, pegged to the United States dollar, US dollar. As China pursued its Chinese economic reform, transition from planned economy, central planning to a market economy and increased its participation in foreign ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
CME Group
CME Group Inc. is an American financial services company based in Chicago that operates financial derivatives exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and the Commodity Exchange. The company also owns 27% of S&P Dow Jones Indices. It is the world's largest operator of financial derivatives exchanges. Its exchanges are platforms for trading in agricultural products, currencies, energy, interest rates, metals, futures contracts, Option (finance), options, stock indexes, and cryptocurrencies futures. In addition to its headquarters in Chicago, the company also has offices in New York, Houston, and Washington D.C., in the U.S., as well as abroad in Bangalore, Beijing, Belfast, Calgary, Hong Kong, London, Seoul, Singapore, and Tokyo. History The Chicago Mercantile Exchange (CME), was founded in 1898 as a nonprofit corporation. In 1919, it established its clearing house. In 2000, CME demutualized (became a joint stock ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Speculation
In finance, speculation is the purchase of an asset (a commodity, good (economics), goods, or real estate) with the hope that it will become more valuable in a brief amount of time. It can also refer to short sales in which the speculator hopes for a decline in value. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. In principle, speculation can involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bond (finance), bonds, commodity futures, currency, currencies, cryptocurrency, fine art, collectibles, real estate, and derivative (finance), financial derivatives. Speculators play one of four primary roles in financial markets, along with hedge (finance), hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where Fungibility, fungible instruments trade at different prices in dif ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
