Glossary

Qualification of a security whose market value is above the nominal value.

Embodies the margin, which would have to be rendered with the adverse price development accepted for the next day to offset all positions.

The description of a position, which is neither long nor short.

In stock exchange trading: the difference between a security’s nominal value and higher market value, expressed in % of the nominal value.
In foreign exchange trading: the difference between the spot price and the higher forward price.

The process through which the clearing house calculates the clearing member with long positions, who will oppose the delivery of the basic securities. Since the same clearing member mostly has both long and short positions in the same contract, the assignment algorithm is programmed in such a way that the number of deliveries to be effectively settled is as small as possible between clearing members.

A short position option, which has been allotted to be exercised and for which no delivery has yet taken place.

A random process, through which the stock exchange determines those option writers, who must meet their received obligation and consequently deliver or accept the basic value.

An option, which can currently be exercised up to and including the expiry date.

Exploitation of local or international differences of exchange of the same values, for example securities, foreign currency, bank notes, whereby these values are bought on the market with the lowest prices and sold on the market with the highest prices. In the ideal case, arbitration is completely free of risk.

The process through which the clearing house calculates the clearing member with long positions, who will oppose the delivery of the basic securities. Since the same clearing member mostly has both long and short positions in the same contract, the assignment algorithm is programmed in such a way that the number of deliveries to be effectively settled is as small as possible between clearing members.

A commonly used term in investment banking, which means that the market value of a security corresponds to the nominal value.

An option, where the basic price corresponds to the current spot price of the basic value.