Investment Terms: L
This article is from the Investment
Investment Terms: L
- Lagging Indicators:
Market indicators showing the general
direction of the economy and confirming or denying the trend implied
by the leading indicators. Also referred to as concurrent indicators.
- Last Trading Day:
According to the Chicago Board of
Trade rules, the final day when trading may occur in a given futures
or options contract month. Futures contracts outstanding at the end of
the last trading day must be settled by delivery of the underlying
commodity or securities or by agreement for monetary settlement (in
some cases by EFPs).
- Leading Indicators:
Market indicators that signal the
state of the economy for the coming months. Some of the leading
indicators include: average manufacturing workweek, initial claims for
unemployment insurance, orders for consumer goods and material,
percentage of companies reporting slower deliveries, change in
manufacturers' unfilled orders for durable goods, plant and equipment
orders, new building permits, index of consumer expectations, change
in material prices, prices of stocks, change in money supply.
The ability to control large dollar amounts
of a commodity with a comparatively small amount of capital.
- Limit Order:
An order in which the customer sets a
limit on the price and/or time of execution.
See Position Limit, Price Limit, Variable
The ability to buy (sell) contracts on one
exchange (such as the Chicago Mercantile Exchange) and later sell
(buy) them on another exchange (such as the Singapore International
A characteristic of a security or commodity
market with enough units outstanding to allow large transactions
without a substantial change in price. Institutional investors are
inclined to seek out liquid investments so that their trading activity
will not influence the market price.
Selling (or purchasing) futures contracts
of the same delivery month purchased (or sold) during an earlier
transaction or making (or taking) delivery of the cash commodity
represented by the futures contract. See Offset.
- Liquidity Data Bank®(LDB®):
A computerized profile of
CBOT market activity, used by technical traders to analyze price
trends and develop trading strategies. There is a specialized display
of daily volume data and time distribution of prices for every
commodity traded on the Chicago Board of Trade.
- Loan Program:
A federal program in which the
government lends money at preannounced rates to farmers and allows
them to use the crops they plant for the upcoming crop year as
collateral. Default on these loans is the primary method by which the
government acquires stocks of agricultural commodities.
- Loan Rate:
The amount lent per unit of a commodity to
One who has bought futures contracts or owns a
cash commodity. Long Hedge: See Purchasing Hedge.
The lowest price of the day for a particular