IB
| See Introducing Broker.
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Immediate-or-Cancel (IOC)
| An instruction on an order that requires execution of as many lots as can be filled immediately, and the rest canceled.
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In Sight
| The amount of a particular commodity that arrives at terminal or central locations is or near producing areas. When a commodity is "in sight," it is inferred that reasonably prompt delivery can be made; the quantity and quality also become known factors rather than estimates.
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Income Bonds
| Bonds issued when the ability of the issuing company to pay interest is questioned. They are speculative instruments that pay high rates of interest.
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Income Stream
| A strategy of arranging bonds so that they produce a consistent series of payments.
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Indenture
| The terms of a corporate bond. Also known as deed of trust, it appears on the face of the bond certificate.
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Index Arbitrage
| The simultaneous purchase (sale) of stock index futures and the sale (purchase) of some or all of the component stocks which make up the particular stock index to profit from sufficiently large intermarket spreads between the futures contract and the index itself.
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Index Option
| An option whose underlying instrument an index. This includes options on the overall instrument market(such as the S&P 500 Index options) as well as options on commodity based index groups. Index options are cash settlement options.
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Industrial Revenue (ID Revenue, ID Revs, or Indust
| A form of municipal bond whose issuer's ability to pay interest and principal is based on revenue earned from an industrial complex.
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Inelasticity
| A characteristic that describes the interdependence of the supply, demand and price of a commodity. A commodity is inelastic when a price change does not create an increase or decrease in consumption. In-elasticity exists when supply and demand are relatively unresponsive to changes in price.
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Inflation
| An economic condition where there is an increase in the price of consumer goods, thereby eroding purchasing power.
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Initial Deposit
| See Initial Margin.
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Initial Margin
| The amount a futures market participant must deposit into a margin account at the time an order is placed to buy or sell a futures contract. Margin in Commodities is not a down payment as in securities. See also Margin.
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Insider
| Person with nonpublic information on a corporation. Directors, officers and stockholders owning more than 10% of any one class of stock are usually considered insiders.
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Insider Dealing
| The purchase or sale of shares by someone who possesses "inside" information about the company; i.e., information on the company’s performance and prospects which has not yet been made available to the market as a whole and which, if available, might affect the share price.
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Institutional Customer
| In the financial instruments market, roughly analogous to the commercial customer in the grain trade. The institutional customer is one with large holdings in securities (long or short) who is in the market to hedge these interests.
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Interbank Rates
| The Foreign Exchange rates at which large international banks quote other large international banks
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Intercommodity Spread
| A spread in which the long and short legs are in two different but generally related commodity markets. Also called an intermarket spread. See Spread.
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Interdelivery Spread
| A spread involving two different months of the same commodity. Also called an intracommodity spread. See Spread.
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Interest Rate Futures
| Futures contracts traded on fixed income securities such as G.N.M.A.s, U.S. Treasury issues, or CDS. Currency is excluded from this category, even though interest rates are a factor in currency values.
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Interest Rate Parity
| Traditional theory of foreign exchange which states that the forward premium or discount on one currency relative to another is directly related to the interest rate differential between the two countries. Because capital controls, restraints to trade, and national economic policy may affect any or all of the variables, actual realization of the theory may be difficult.
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Interest Rate Risk
| The prospect that Treasury and agency securities will decline in price if economy-wide interest rates rise.
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Interest Rate Swap Points
| Interest rates may be determined by a simple rule using the bid and offer spread on an FX rate. If the rate quoted is in foreign (non US) terms and the offered price is higher than the bid, then the interest rate in that nation is higher than the rate in the base nation for the particular time in question. If quoted in American terms, the opposite is true. Example – USD/ JPY quoted 105.75 to 105.65. Because the offered price is lower than the bid, then you know that rates are lower in Japan than in the US.
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Interest Rate Swaps (IRS)
| An exchange of two debt obligations that have different payment streams. The transaction usually exchanges two parallel loans; one fixed the other floating.
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Interim Dividend
| A dividend declared part way through a company's financial year, authorized solely by the directors.
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Intermarket Spread
| See Spread and Intercommodity Spread.
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Intermediate-Term Bonds
| Those maturing five to ten years after original issue.
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International Commodities Clearinghouse (ICCH)
| An independent organization that serves as a clearinghouse for most futures markets in London, Bermuda, Singapore, Australia, and New Zealand.
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In-The-Money
| An option is in-the-money when it has intrinsic value. A call is in-the-money when the market price of the underlying instrument is greater than the option's exercise price. A put is in-the-money when the market price of the underlying instrument is lower than the option's exercise price.
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Intracommodity Spread
| See Spread and Interdelivery Spread.
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Intrinsic Value
| A measure of the value of an option or a warrant if immediately exercised. The amount by which the current price for the underlying commodity or futures contract is above the strike price of a call option or below the strike price of a put option for the commodity or futures contract.
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Introducing Broker (or IB)
| Any person (other than a person registered as an "associated person" of a futures commission merchant) who is engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery on an exchange who does not accept any money, securities, or property to margin, guarantee, or secure any trades or contracts that result therefrom.
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Inverted Market
| A futures market in which the nearer months are selling at prices higher than the more distant months; a market displaying "inverse carrying charges," characteristic of markets with supply shortages. See Backwardation.
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Investment Banker
| A firm that engages in the origination, underwriting and distribution of an issue.
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Investment Trust
| Company whose sole business consists of buying, selling and holding shares.
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Invisible Supply
| Uncounted stocks of a commodity in the hands of wholesalers, manufacturers and producers which cannot be identified accurately. Stocks outside commercial channels but theoretically are available to the market.
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IRA-Individual Retirement Accounts
| a tax-deferred retirement plan created by the U.S. government.
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ISDA
| The International Swap Dealers Association, Inc., a New York-based group of major international swap dealers, which has published the Code of Standard Wording, Assumptions and Provisions for Swaps, or Swaps Code, for U.S. dollar interest rate swaps as well as standard master interest rate and currency swap agreements and definitions for use in connection with the creation and trading of swaps.
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Issue
| (1) The process by which a new security is brought to market. (2) Any security.
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Issue Date
| Month and day that a security is initially issued.
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Issued Stock
| Stock sold to the public.
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