Takeover
| The acquisition of control over a corporation by another company, which normally ousts the current management. The takeover can occur by means of a proxy fight or the acquisition of a controlling quantity of common stock.
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Taker
| The buyer of an option contract.
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TALISMAN
| The Exchange's computerized settlement system.
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Target Exit Point
| The predetermined price at which option holdings would be sold at an achievable profit. It is a key component of an overall strategy using risk-reward analysis and money management techniques.
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Target Fund
| A mutual fund containing bonds that mature in a single year, giving the entire fund a terminal maturity in that year.
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Tax Anticipation Bill
| Short-term security similar to a T bill that is accepted at par in payment of corporate federal taxes.
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Tax Anticipation Note
| A municipal note issued in anticipation of revenues from a future tax.
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Tax Exempt Bonds
| Municipal securities (whose interest is free from federal income tax).
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T-Bond
| See Treasury Bond.
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Technical Analysis
| An approach to analysis of futures markets and future trends of commodity prices that examines the technical factors of market activity. Technical analysts normally examine patterns of price change, rates of change and changes in volume of trading and open interest, often by charting, in the hope of being able to predict and profit from future trends. Contrasted with Fundamental Analysis.
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Ted Spread
| The difference between the price of the three-month U.S. Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.
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Tenants In Common
| A joint account in which the death of one of the owners would cause his/her share of the account to be retained by his/her estate.
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Tender
| The act on the part of the seller of futures contracts of giving notice to the clearinghouse that he intends to deliver the physical commodity in satisfaction of the futures contract. The clearinghouse, in turn, passes along the notice to the oldest buyer of record in that delivery month of the commodity. See also Retender.
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Tender Offer
| The offer made by one company or individual for shares of another company. The offer may be in the form of cash or securities.
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Tenderable Grades
| See Contract Grades.
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Term Maturity
| Bonds of an issue all mature on the same date.
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Term Structure of Interest Rates
| A graph representing the yield to maturity of Treasury securities at identified years of maturity.
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Terminal Elevator
| An elevator located at a point of greatest accumulation in the movement of agricultural products which stores the commodity or moves it to processors.
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Terminal Market
| Usually synonymous with commodity exchange or futures market, specifically in the United Kingdom.
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Theta
| The derivative of the option price equation with respect to the remaining time to expiration of the option. A measure of the sensitivity of the value of the option to the passage of time.
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Tick
| The smallest allowable increment of price movement for a contract. Also referred to as Minimum Price Fluctuation.
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Ticker
| Shows current and/or recent history of a currency either in the format of a graph or table.
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Ticker Tape
| A continuous paper tape transmission of commodity or security prices, volume, and other trading and market information, which operates on private leased wires by the exchanges, available to their member firms and other interested parties on a subscription basis.
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TIGRs
| Acronym for Treasury Investment Growth Receipt, a Merrill Lynch service mark for its zero coupon U.S. Treasury bond product of the 1980's.
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Time Premium Or Time Value
| The portion of the premium that reflects the remaining life of an option. It can also be measured as the amount over the option's intrinsic value
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Time Spread
| The selling of a nearby option and buying of a more deferred option with the same strike price.
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Time Spread Or Calendar Spread
| An option spread consisting of the purchase of an option and the simultaneous sale of a different option on the same instrument with a nearer expiration date. The purpose of a time spread is to profit from the accelerated loss in time value of the option that is written, relative to the option that is purchased. Time spreading is often a neutral strategy, but it can also be bullish or bearish, depending upon the options involved.
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Time Value
| That portion of an option's premium that exceeds the intrinsic value. The time value of an option reflects the probability that the option will move into-the-money. Therefore, the longer the time remaining until expiration of the option, the greater its time value. Also called Extrinsic Value.
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Time-of-Day Order
| This is an order which is to be executed at a given minute in the session. For example, "Sell 10 March corn at 12
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To-Arrive Contract
| A type of deferred shipment in which the price is based on delivery at the destination point and the seller pays the freight in shipping it to that point.
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Tomorrow Next (Tom/Next)
| Simultaneous buying and selling of a currency for delivery the following day.
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Trade Confirmation
| Written verification and information concerning a transaction that is sent to the customer on or before the first business day following the trade date.
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Trade Date
| The day a trade occurs.
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Trade House
| A firm which deals in actual commodities.
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Trade Option
| A commodity option transaction in which the taker is reasonably believed by the writer to be engaged in business involving use of that commodity or a related commodity.
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Traded Options
| Transferable Options with the right to buy and sell a standardized amount of a security at a fixed price within a specified period.
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Trader
| (1) A merchant involved in cash commodities; (2) a professional speculator who trades for his own account.
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Traders
| Generally people who trade for their own account or employees of dealers or institutions who trade for their employer's accounts.
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Trading Authorization
| Written permission for one to trade in another’s account.
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Trading Floor
| The physical location at the futures and options exchange where contracts actually are bought and sold.
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Transaction
| The entry or liquidation of a trade.
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Transaction Cost
| The cost associated with buying or selling of a financial instrument.
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Transaction Date
| The date on which the trade occurs.
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Transfer
| The process by which securities are reregistered to new owners. The old securities are canceled and new ones issued to the new registrants.
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Transfer Agent
| A commercial bank that retains the names and addresses of registered securities owners and that reregisters traded securities to the name of the new owners.
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Transfer Notice
| A term used on some exchanges to describe a notice of delivery. See Retender.
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Transfer Trades
| Entries made upon the books of futures commission merchants for the purpose of
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Transferable Option (or Contract)
| A contract which permits a position in the option market to be offset by a transaction on the opposite side of the market in the same contract.
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Treasury Bills
| Short-term U.S. government obligations, generally issued with 13, 26 or 52-week maturities.
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Treasury Bond
| Long-term (10 to 30 years), fixed interest government debt security.
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Treasury Bonds (or T-Bond)
| Long-term obligations of the U.S. government which pay interest semiannually until they mature or are called, at which time the principal and the final interest payment is paid to the investor.
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Treasury Direct
| The program through which investors may purchase new issues of Treasury bills, notes, and bonds directly from the Federal Reserve.
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Treasury Note
| Medium-term (1 to 10 years), fixed interest government debt security.
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Treasury Notes
| Same as Treasury Bonds except that Treasury Notes are medium-term and not callable.
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Trend
| The general direction, either upward or downward, in which prices have been moving.
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Trendline
| In charting, a line drawn across the bottom or top of a price chart indicating the direction or trend of price movement. If up, the trendline is called bullish; if down, it is called bearish.
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Truncated Risk
| The ability of an investment to resist additional loss. Truncated risk is of particular relevance to options. For example, one cannot lose more than the premium paid for on an option. Profits, however, are theoretically unlimited on an option and are equal to the intrinsic value of the option less the premium paid (assuming there is no longer any time value remaining).
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TRUPs
| A Salomon Smith Barney acronym for a Trust Preferred Security.
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Trust Indenture
| Written agreement between a corporation and its debt issue holders stating interest rates, maturity dates, collateral, etc.
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Trust Preferred Securities
| Trust preferreds represent most of the new preferred offerings coming to the market today. Trust preferreds are a hybrid security consisting of a preferred stock issued by a special trust and debt securities issued by the company. The special trust is a subsidiary of the company set up solely for the purpose of selling and administrating the trust preferreds. The trust sells their preferred securities to investors, in denominations ranging from $25 upward, and then uses the proceeds from the sale of the preferred stock to buy debt securities (debentures, etc.) from the company setting up the trust. The interest payments from the debt securities are used to fund the preferred stock's distributions. When the debt securities mature and are paid off, the trust in turn uses those funds to pay off the trust preferred securities which mature at the same time. Trust preferreds are subject to redemption, generally at the issue or liquidation preference price, and generally in five years from the date of issue. Redemption of the securities, on or after the specified optional redemption date, is optional for the trust but the call for redemption is mandatory for the holder of the securities. The advantage of this hybrid arrangement to the company is that the interest paid on the debt securities is deductible from their income taxes while normal preferred dividends would not be deductible.
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Turnover
| The volume traded, or level of trading, over a specified period, usually daily or yearly.
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Two Way Price
| Both the bid and offer rate is quoted for a Forex transaction.
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Two-Dollar Broker
| An exchange member who executes orders from other member firms and charges a fee for each execution.
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Type
| Refers to an option being either a put or a call.
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