P1:a/b P2:c/d QC:e/f T1:g
gloss JWBK182-McDowell April 25, 2008 16:35 Printer: Yet to come
Glossary 183exchange was a not-for-profit organization. The exchange demutualized in Novem-
ber 2000, went public in December 2002, and merged with the Chicago Board of
Trade in July 2007. CME trades several types of financial instruments: interest rates,
equities, currencies, and commodities. CME has the largest options and futures
contracts open interest (number of contracts outstanding) of any future exchange
in the world. Trading is conducted in two methods: an open outcry format and the
CME Globex©Relectronic trading platform. Approximately 70 percent of total vol-
ume at the exchange occurs on CME Globex.
Chicago Mercantile Group (CME Group) The world’s largest and most diverse
exchange. Formed by the 2007 merger of the Chicago Mercantile Exchange (CME)
and the Chicago Board of Trade (CBOT), CME Group serves the risk management
needs of customers around the globe. As an international marketplace, CME Group
brings buyers and sellers together on the CME Globex electronic trading platform
and on its trading floors.
choppy market Seebracketed market.
churning (excessive trading) When a broker excessively trades an account for
the purpose of increasing his or her commission revenue. This practice is entirely
unethical and does not serve the customer’s investment or trading goals.
close The period at the end of the trading session; sometimes refers to the
closing price.
commission Fees paid to a brokerage house to execute a transaction.
commission ratio Total dollars of commission paid divided by total dollars profit
earned equals the commission ratio. This formula is not applicable to traders that
are not generating a profit or have a pay off ratio of less than 1 to 1.
commodities Physical goods that are traded at a futures exchange such as grains,
foods, meats, metals, etc.
consolidating market This is also known as a bracketed, channeled, sideways or
nontrending market. Seebracketed market.
Consumer Price Index (CPI) Issued by the Bureau of Labor Statistics, this figure
is a popularly used measure of inflation. It measures the relative change in prices
of a basket of consumer products and services.
contract A single unit of a commodity or future. This is similar to shares in stocks.
contrarian One who trades or invests on contrary opinion using the theory that
they can profit by doing the opposite of the majority of traders or investors in the
market.
correction A short, sharp reverse in prices during a longer market trend.
corrective Elliott wave Refers to Elliott wave structure made up of impulsive
wave counts and corrective wave counts. Usually refers to a correction wave se-
quence in an impulsive trend wave sequence.