Daily Price Limits - See Limit (Up or Down).

Day Order - An order that expires automatically at the end of each day's trading session. There may be a day order with time contingency. For example, an "off at a specific time" order is an order that remains in force until the specific time during the session is reached. At such time, the order is automatically canceled.

Day Traders - Commodity traders, generally members of the exchange on the trading floor, who take positions in commodities and then offset them prior to the close of trading on the same trading day.

Day Trading - Establishing and offsetting the same futures market position within one day.

Dealer Option - A put or call on a physical commodity, not originating on or subject to the rules of an exchange, in which the obligation for performance rests with the writer of the option. Dealer options are normally written by firms handling the underlying commodity and offered to public customers, although the reverse may also be true.

Deck - The orders for purchase or sale of futures and option contracts held in the hands of a floor broker.

Declaration Date - See Expiration Date.

Declaration (of Options) - See Exercise.

Default - Failure to perform on a futures contract as required by exchange rules, such as failure to meet a margin call, or to make or take delivery.

Deferred Futures - The futures contracts that expire during the most distant months. Also called Back Months.

Months - See Forward Purchase or Sale.

Deliverable Grades - See Contract Grades.

Deliverable Stocks - Stocks of commodities located in exchange approved storage, for which receipts may be used in making delivery on futures contracts. In the cotton trade, the term refers to cotton certified for delivery. Also see Certificated Stocks.

Delivery - The tender and receipt of the actual commodity, tile cash value of the commodity, or of a delivery instrument covering the commodity (e.g., warehouse receipts or shipping certificates), used to settle a futures contract. See Notice of Delivery.

Delivery, Current - Deliveries being made during a present month. Sometimes current delivery is used as a synonym for nearby delivery.

Delivery Date - The date on which the commodity or instrument of delivery must be delivered to fulfill the terms of a contract.

Delivery Instrument - A document used to effect delivery on a futures contract, such as a warehouse receipt or shipping certificate.

Delivery Month - The specified month within which a futures contract matures and can be settled by delivery.

Delivery Nearby - The nearest traded month. In plural form, one of the nearer trading months.

Delivery Notice - The written notice given by the seller of his intention to make delivery against an open short futures position on a particular date. This notice, delivered through the clearing house, is separate and distinct from the warehouse receipt or other instrument that will be used to transfer title.

Delivery Option - A provision of a futures contract which provides the short with flexibility in regard to timing, location, quantity, or quality in the delivery process.

Delivery Points - Those locations designated by commodity exchanges where stocks of a commodity represented by a futures contract may be delivered in fulfillment of the contract.

Delivery Price - The price fixed by the clearing house at which deliveries on futures are invoiced - generally the price at which the futures contract is settled when deliveries are made.

Delta - See Delta Value.

Delta Margining - An option margining system used by some exchanges for exchange members and/or floor traders which equates the changes in option premiums with the changes in the price of the underlying futures contract to determine risk factors on which to base the margin requirements.

Delta Value - The expected change in an option's price given a one-unit change in the price of the underlying futures contract or physical commodity.

Deposit - The initial outlay required by a broker of a client to open a futures position, returnable on liquidation of that position.

Depository Receipt - See Vault Receipt.

Derivative - A financial instrument, traded on or off an exchange, the price of which is directly dependent upon (i.e. "derived from") the value of one or more underlying securities, equity indices, debt instruments, commodities, other derivative instruments, or any agreed upon pricing index or arrangement (e.g., the movement over time of the Consumer Price Index or freight rates). Derivatives involve the trading of rights or obligations based on the underlying product, but do not directly transfer property. They are used to hedge risk or to exchange a floating rate of return for a fixed rate of return.

Designated Self Regulatory Organization (DSRO) -In the US, Self regulatory organizations (i.e., the commodity exchanges and the National Futures Association) must enforce minimum financial and reporting requirements for their members, among other responsibilities outlined in the CFTC's regulations. When a futures commission merchant (FCM) is a member of more than one SRO, the SRO's may decide among themselves which of them will be responsible for assuming these regulatory duties and, upon approval of the plan by the Commission, be appointed the "designated self regulatory organization" for that FCM.

Diagonal Spread - A spread between two call options or two put options with different strike prices and different expiration dates.

Differentials - The discounts (premiums) allowed for grades or locations of a commodity lower (higher) than the par or basis grade or location specified in the futures contract. See Allowances.

Discount - (1) The amount a price would be reduced to purchase a commodity of lesser grade, (2) sometimes used to refer to the price differences between futures of different delivery months, as in the phrase "July at a discount to May," indicating that the price for the July future is lower than that of May.

Discount Basis - Method of quoting securities where the price is expressed as an annualized discount from maturity value.

Discount Bond - A bond selling below par.

Discretionary Account - An arrangement by which the holder of an account gives written power-of-attorney to someone else, often a broker, to buy and sell without prior approval of the holder; often referred to as a "managed account" or "controlled account". See Controlled Account.

Distant or Deferred Delivery - Usually means one of the more distant months in which futures trading is taking place.

Dominant Future - That future having the largest number of open contracts.

Double Hedging - As used by the CFTC, it implies a situation where a trader holds a long position in the futures market in excess of the speculative limit as an offset to a fixed price sale even though the trader has an ample supply of the commodity on hand to fill all sales commitments.

DSRO - See Designated Self-Regulatory Organization.

Dual Trading - Dual trading occurs when: (1) a floor broker executes customer orders and, on the same day, trades for his own account or an account in which he has an interest; or (2) an FCM carries customer accounts and also trades, or permits its employees to trade, in accounts in which it has a proprietary interest, also on the same trading day.

Duration - A measure of a bond's price sensitivity to changes in interest rates.