Job Lot - A form of contract having a smaller unit of trading than is featured in a regular contract.

Kerb Trading or Dealing - See Curb Trading.

Large Order Execution (LOX) Procedures - Rules in place at the Chicago Mercantile Exchange that authorize a member firm which receives a large order from an initiating party to solicit counterparty interest off the exchange floor prior to open execution of the order in the pit and that provide for special surveillance procedures. The parties determine a maximum quantity and an "intended execution price." Subsequently, the initiating party's order quantity is exposed to the pit; any bids (or offers) up to and including those at the intended execution price are hit (accepted). The unexecuted balance is then crossed with the contraside trader found by the LOX procedures.

Large Traders - A large trader is one who holds or controls a position in any one future or in any one option expiration series of a commodity on any one contract market equaling or exceeding the exchange or CFTC-specified reporting level.

Last Notice Day - The final day on which notices of intent to deliver on futures contracts may be issued.

Last Trading Day - Day on which trading ceases for the maturing (current) delivery month.

Leaps - Long-dated, exchange-traded options.

Leverage Contract - A contract, standardized as to terms and conditions, for the long-term (ten years or longer) purchase (1ong leverage contract) or sale (short leverage contract) by a leverage customer of a leverage commodity which provides for: (1) participation by the leverage transaction merchant as a principal in each leverage transaction; (2) initial and maintenance margin payments by the leverage customer; (3) periodic payment by the leverage customer or accrual by the leverage transaction merchant to the leverage customer of a variable carrying charge or fee on the initial value of the contract plus any margin deposits made by the leverage customer in connection with a short leverage contract; (4) delivery of a commodity in an amount and form which can be readily purchased and sold in normal commercial or retail channels; (5) delivery of the leverage commodity after satisfaction of the balance due on the contract; and (6) determination of the contract purchase and repurchase, or sale and resale, prices by the leverage transaction merchant.

Leverage Dealer - See Leverage Transaction Merchant.

Leverage Transaction Merchant - Any individual, association, partnership, corporation, or trust that is engaged in the business of offering to enter into, entering into, or confirming the execution of leverage contracts, or soliciting or accepting orders for leverage contracts, and who accepts leverage customer funds or extends credit in lieu of those funds.

Licensed Warehouse - A warehouse approved by an exchange from which a commodity may be delivered on a futures contract. See Regular Warehouse.

Life of Contract - Period between the beginning of trading in a particular futures contract and the expiration of trading. In some cases this phrase denotes the period already passed in which trading has already occurred. For example, "The life-of-contract high so far is $2.50." Same as Life of Delivery or Life of the Future.

Limit (Up or Down) - The maximum price advance or decline from the previous day's settlement price permitted during one trading session, as fixed by the rules of an exchange. See Daily Price Limits.

Limit Move - A price that has advanced or declined the permissible limit during one trading session, as fixed by the rules of a contract market.

Limit Only - The definite price stated by a customer to a broker restricting the execution of an order to buy for not more than, or to sell for not less than, the stated price.

Limit Order - An order in which the customer specifies a price limit or other condition, such as time of an order, as contrasted with a market order which implies that the order should be filled as soon as possible.

Liquidation -The closing out of a long position. The term is sometimes used to denote closing out a short position, but this is more often referred to as covering. See Cover.

Liquid Market - A market in which selling and buying can be accomplished with minimal price change.

LocaI - A member of a U.S. exchange who trades for his own account and/or fills orders for customers and whose activities provide market liquidity. See Floor Trader.

Locked-In - A hedged position that cannot be lifted without offsetting both sides of the hedge (spread). See Hedging. Also refers to being caught in a limit price move.

London Gold Market - Refers to the five dealers who set (fix) the gold price in London: Mocatta & Goldsmid, N. Rothschild & Sons, Johnson Matthey, Sharps Pixley, and Samuel Montagu & Co.

London Option - A generic term sometimes used to describe options on physical commodities or on futures contracts traded abroad (typified by options on London commodity markets). These options, which often had nothing whatsoever to do with legitimate foreign markets gained notoriety--prior to their ban in the United States in 1978 - because of the sales practices and fraud allegations associated with the American dealers who sold them.

Long - (1) One who has bought a futures contract to establish a market position; (2) a market position which obligates the holder to take delivery; (3) one who owns an inventory of commodities. See Short.

Long Hedge - Purchase of futures against the fixed price forward sale of a cash commodity.

Long the Basis - A person or firm that has bought the spot commodity and hedged with a sale of futures is said to be long the basis.

Lookback Option - An option whose payoff depends on the minimum or maximum price of the underlying asset during some portion of the life of the option.

Lot - A unit of trading. See Even Lot, Job Lot, and Round Lot.

LTM - Leverage Transaction Merchant.