Word of the DayWelcome to Investmenterms.com, a comprehensive dictionary for commodity futures traders.
Floor Broker
A person with exchange trading privileges who, in any pit, ring, post, or other place provided by an exchange for the meeting of persons similarly engaged, executes for another person any orders for the purchase or sale of any commodity for future delivery.
NFA
National Futures Association.
Yield
The amount of interest or dividend paid on a loan or an investment, expressed as a percentage. The yield on a stock is calculated by dividing the dividend by the current market price.
Zero Coupon
Refers to a debt instrument that does not make coupon payments, but, rather, is issued at a discount to par and redeemed at par at maturity.
Net New Highs
A net new high is reached when the net asset value of an investment exceeds the previous peak level in the net asset value (also known as the 'high watermark'). Performance fees are levied on net new highs.
Risk-adjusted Performance
Risk relative to return - the return achieved per unit of risk or the risk associated with a particular level of reward, typically represented by the Sharpe ratio. Improving the risk-adjusted return depends either on increasing returns and maintaining the level of risk, or maintaining the level of returns and lowering the associated risk.