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Trading glossary

The trading glossary is a reference source for pgm market terminology used on this site and elsewhere.

mining glossary is available in the Production section.

Terms appearing in italics are defined within the glossary.

Further information can be found in the FAQs.


A

Active Delivery Month :

The quoted delivery month on the most frequently traded futures contract on a futures exchange. Spot prices will be derived from the contract price for the active delivery month.

Ask :

Lowest price at which a dealer is willing to sell a commodity or security (alternative term to offer).

Assay :

Test of precious metal purity or fineness.

Assay mark :

The stamp placed by an assayer on a precious metal product as a guarantee of its fineness.

Assay office :

An organisation setting and monitoring the fineness of precious metals in a particular country

B

Backwardation :

Market scenario when the spot price of a commodity is higher than the forward price. In the precious metal markets this is the result of the monetary interest rate being less than the precious metal lease rate.

Base Price :

See Johnson Matthey Base Price.

Bear :

A dealer who expects the value of a commodity, security, currency or market sector to fall.

Bear market :

A market in which prices are falling or are expected to fall. Dealers are more likely to be sellers than buyers in a bear market.

Bear position :

A position taken by a dealer in a bear market, involving selling commodities, securities or currency without owning them. See also short selling.

Bid Price :

The highest price at which a dealer is willing to buy commodities, securities or currency.

Bid - Offer/Ask spread :

the difference between the price at which a dealer is willing to buy (Bid) and sell (Offer/Ask) a commodity, security or currency. The Bid will be the lower of the two prices and the offer price the higher.

Bull :

An investor who expects the value of a commodity, security, currency or market sector to rise.

Bull position :

When a dealer buys a commodity, security or currency without making a corresponding sale. See also long position.

Bull market :

A market in which prices are rising or are expected to rise. In a bull market it is more likely that dealers will be buyers than sellers.

Bullion :

Precious metals such as platinum, palladium, gold and silver in bulk form, i.e. in the form of bars, ingots or plate rather than in coin, grain or sponge.

Buying forward :

Buying commodities, securities or currency at a specified price for delivery at a future date.

C

Closing Price :

The price at the end of the day's trading on a commodity market or stock exchange.

Commodity :

A physical substance traded on a commodity market. Examples of hard commodities include platinum, copper and oil, whereas soft commodities include grain, cotton and rubber.

Commodity Futures Trading Commission (CFTC) :

The United States Government's regulatory body for US future markets.

Contango :

Market scenario when the forward price of a commodity is higher than the spot price. In the precious metal markets this is the result of monetary interest rates being greater than precious metal lease rates.