Glossary

A US tax rule for section 1256 contracts, which include regulated futures: 60 percent of a capital gain or loss counts as long-term and 40 percent as short-term, however long you held the position.

Sources: irs.gov: p550, irs.gov: about-form-6781

Learn more: Local lesson 13: Tax basics for US futures

A VWAP that starts its running calculation from a point on the chart you choose, instead of only from the start of a session. It shows the volume-weighted average price since that point.

Sources: tradingview.com: anchored-vwap-drawing-tool, tradingview.com: volume-weighted-average-price-vwap

Learn more: Floor Trader lesson 8: Anchored VWAP

The lowest price a seller is currently willing to accept, also called the offer. If you buy at the market right now, you buy at the ask.

Sources: CFTC glossary (A), CFTC glossary (O), cmegroup.com: cme-liquidity-tool-user-guide

Learn more: Order Filler lesson 1: Bid, ask, and spread

The highest price a buyer is currently willing to pay. If you sell at the market right now, you sell at the bid.

Sources: CFTC glossary (B), cmegroup.com: cme-liquidity-tool-user-guide

Learn more: Order Filler lesson 1: Bid, ask, and spread

An entry order sent with two exit orders already attached: a protective stop on one side and a profit target on the other. The two exits are linked so that when one fills, the other is canceled.

Sources: CFTC glossary (O), CFTC glossary (S), cmegroup.com: closing-your-position

Learn more: Order Filler lesson 7: Brackets and OCO

The thick part of a candlestick, running from the period's opening price to its closing price.

Source: cmegroup.com: chart-types-candlestick-line-bar

Learn more: Clerk lesson 3: Candle anatomy

The distance from a candle's high to its low: the full length of the candle from the tip of one wick to the tip of the other.

Source: cmegroup.com: chart-types-candlestick-line-bar

Learn more: Clerk lesson 3: Candle anatomy

The Commodity Futures Trading Commission: the U.S. federal agency, created in 1974, that regulates the futures markets and enforces the law that governs them.

Source: CFTC glossary (C)

Learn more: Runner lesson 13: Who regulates futures

Trader slang for a sideways market with no clear direction. In this course, chop means the messy kind of sideways movement, where price swings unevenly and there is no clean ceiling or floor.

Source: tradingview.com: choppiness-index-chop

Learn more: Floor Trader lesson 1: Trend, range, and chop

The organization that stands in the middle of every trade, becoming the buyer to every seller and the seller to every buyer, so neither side has to depend on the other to pay.

Sources: CFTC glossary (C), CFTC glossary (D)

Learn more: Runner lesson 3: The exchange

A dollar amount, set in advance, that ends your trading for the day once that day's losses reach it.

Source: cmegroup.com: risk-management-and-your-trade-plan

Learn more: Local lesson 7: Daily loss limits

The single official price set for each contract at the end of every trading day, the same for everyone. The clearing house uses it to settle every account and work out margin.

Source: CFTC glossary (S)

Learn more: Runner lesson 12: Daily settlement

The stream of real-time and historical prices that your platform and charts display. The exchange charges a fee for this market data, which your broker may bill separately or build into other costs.

Source: cmegroup.com: getting-started-with-your-broker

Learn more: Order Filler lesson 10: Brokers and platforms

An order that is good only for the current trading session. If it has not filled by the end of that session, it expires on its own. Futures orders are usually sent as day orders unless you choose another time in force.

Sources: CFTC glossary (D), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 9: Order duration

A candle whose open and close are the same or nearly the same, so its body is just a thin line. It shows a period that ended about where it began.

Source: tradingview.com: doji

Learn more: Clerk lesson 5: Reading candle size

Depth of Market: a price ladder on your trading platform that shows the bids and offers waiting at several prices above and below the current price.

Source: cmegroup.com: welcome-to-the-trading-simulator

Learn more: Order Filler lesson 5: The order book

How far an account has fallen from its highest point, measured in dollars or as a percentage of that high. The deeper the drawdown, the larger the percentage gain needed to get back.

Sources: cmegroup.com: controlling-risk, law.cornell.edu: 4.10

Learn more: Local lesson 8: Drawdown math

A two-candle shape where the second candle's body completely covers the first candle's body and closes in the opposite direction.

Source: tradingview.com: engulfing-bullish

Learn more: Clerk lesson 6: Common candle shapes

The average amount a set of trades makes or loses per trade over many trades: win rate times average win, minus loss rate times average loss. It describes an average, not the result of the next trade.

Source: the lesson that teaches it, linked below, where the formula is stated and worked through.

Learn more: Local lesson 6: Win rate and expectancy

Two kinds of futures firms that take customer orders. A futures commission merchant (FCM) also accepts customers' money to back their trades. An introducing broker (IB) takes orders but does not hold customer money.

Sources: CFTC glossary (F), CFTC glossary (I)

Learn more: Order Filler lesson 10: Brokers and platforms

The execution of your order, the moment the trade actually happens. A partial fill means only some of your contracts have been executed so far.

Sources: CFTC glossary (F), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 6: Fills and slippage

Flat means you hold no position in a contract. Flattening means getting there: closing what you hold with the opposite trade in the same contract and size, and canceling any working orders that could open a new position.

Sources: CFTC glossary (O), CFTC glossary (P), cmegroup.com: closing-your-position

Learn more: Order Filler lesson 13: Common order mistakes

An agreement to buy or sell something at a price fixed today, with the trade completed on a set future date. Both sides are bound by it, and most traders end it early by making the opposite trade instead of taking delivery.

Sources: CFTC glossary (F), cmegroup.com: understanding-futures-expiration-contract-roll

Learn more: Runner lesson 1: What is a futures contract?

An empty price space between two neighboring candles: one candle's whole range sits above the previous candle's high or below its low, so no trades happened at the prices in between.

Sources: cmegroup.com: chart-types-candlestick-line-bar, tradingview.com: gaps

Learn more: Clerk lesson 10: Gaps

CME Group's electronic trading platform, where its futures are bought and sold on screen with access nearly around the clock. You reach it through a broker.

Source: cmegroup.com: globex

Learn more: Runner lesson 3: The exchange

Good Till Canceled: an order that keeps working across trading days until it fills or you cancel it. It also ends if the contract itself expires, so an old forgotten GTC order can still fill days later.

Sources: CFTC glossary (G), CFTC glossary (O), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 9: Order duration

A single candle with a small body near the top and a long lower wick: price fell after the open, then climbed back to close well above the low.

Source: tradingview.com: hammer-bullish

Learn more: Clerk lesson 6: Common candle shapes

A person or business that already has real exposure to a price, like a farmer growing a crop, and takes a futures position on the opposite side to reduce the risk of a bad price move.

Source: CFTC glossary (H)

Learn more: Runner lesson 2: Hedgers vs. speculators

High-volume nodes are prices in a volume profile where a lot of trading happened, seen as peaks. Low-volume nodes are prices where little traded, seen as valleys, often where price moved through quickly.

Source: tradingview.com: volume-profile-indicators-basic-concepts

Learn more: Floor Trader lesson 10: Volume profile

Initial margin is the amount required to open a futures position. Maintenance margin is a lower floor your account must stay above for as long as the position is open.

Sources: CFTC glossary (M), cmegroup.com: margin-know-what-is-needed

Learn more: Runner lesson 8: Margin

Controlling a large amount of market value with a small amount of money. Because of it, small price moves turn into big gains or losses in your account.

Source: CFTC glossary (L)

Learn more: Runner lesson 7: Notional value and leverage

An order that sets the worst price you will accept: the most you will pay to buy or the least you will take to sell. It can fill at that price or better, or not fill at all.

Sources: CFTC glossary (L), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 3: Limit orders

A chart that joins each period's closing price into one line. It is quick to read, but it hides the open, high, and low of each period.

Source: cmegroup.com: chart-types-candlestick-line-bar

Learn more: Clerk lesson 2: Chart types

Holding a position you opened by buying. A long position makes money if the price rises and loses money if it falls.

Source: CFTC glossary (L)

Learn more: Runner lesson 11: Long and short

Money you keep on deposit with your broker while a futures position is open, as a good-faith guarantee that you can cover losses. It is not a down payment and not a loan.

Sources: CFTC glossary (M), cmegroup.com: margin-know-what-is-needed

Learn more: Runner lesson 8: Margin

A demand from your broker to add money after your account drops below maintenance margin, bringing it back up to the initial margin level. If you cannot, your position may be closed.

Sources: CFTC glossary (M), cmegroup.com: margin-know-what-is-needed

Learn more: Runner lesson 8: Margin

Revaluing every open position at the day's settlement price and paying the gain or loss into or out of your account in cash, every day, instead of all at the end.

Source: CFTC glossary (M)

Learn more: Runner lesson 12: Daily settlement

An order to buy or sell right away at the best price available. You get speed, but not a guaranteed price.

Sources: CFTC glossary (M), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 2: Market orders

Smaller Micro E-mini versions of the E-mini S&P 500 and E-mini Nasdaq-100 futures. MES is $5 per index point ($1.25 per tick) and MNQ is $2 per point ($0.50 per tick).

Sources: cmegroup.com: micro-e-mini-sandp-500.contractSpecs, cmegroup.com: micro-e-mini-nasdaq-100.contractSpecs

Learn more: Runner lesson 5: Micros

The average price over a set number of recent bars, recalculated as each new bar forms and drawn as a line on the chart. It is a smoothed picture of past prices, not a signal.

Source: cmegroup.com: understanding-moving-averages

Learn more: Floor Trader lesson 9: Moving averages

The National Futures Association: the futures industry's self-regulatory organization, working under CFTC oversight. Its members include the brokerage firms that hold customer futures accounts.

Source: CFTC glossary (N)

Learn more: Runner lesson 13: Who regulates futures

The full dollar value of the market one contract controls, found by multiplying the futures price by the contract's size or multiplier. For MNQ the multiplier is $2 per index point.

Sources: cmegroup.com: about-contract-notional-value, cmegroup.com: micro-e-mini-nasdaq-100.contractSpecs

Learn more: Runner lesson 7: Notional value and leverage

One Cancels the Other: two linked orders where, as soon as one is filled, the other is canceled automatically.

Source: CFTC glossary (O)

Learn more: Order Filler lesson 7: Brackets and OCO

In this course, the high and low prices made during the first part of the regular session, measured from the 8:30 a.m. CT open. You choose how long the window is and use the same length every day.

Sources: CFTC glossary (O), tradingview.com: time-price-opportunity-tpo-indicator, nyse.com: hours-calendars

Learn more: Floor Trader lesson 5: The opening range

The exchange's list of resting buy orders (bids) and sell orders (offers) at each price, where incoming orders are matched by price and time of arrival.

Source: CFTC glossary (O)

Learn more: Order Filler lesson 5: The order book

The highest and lowest prices traded on CME Globex during the overnight hours, from the 5:00 p.m. CT reopen until the regular-hours open at 8:30 a.m. CT.

Sources: cmegroup.com: micro-e-mini-nasdaq-100.contractSpecs, nyse.com: hours-calendars, tradingview.com: regular-and-electronic-trading-hours-for-cme-futures

Learn more: Floor Trader lesson 4: Key reference levels

The price in a volume profile where the most volume traded during the chosen period.

Source: tradingview.com: volume-profile-indicators-basic-concepts

Learn more: Floor Trader lesson 10: Volume profile

Choosing how many contracts to trade so that a stopped-out trade loses no more than your risk per trade. Contracts equal risk per trade divided by the dollar risk of one contract, rounded down.

Sources: cmegroup.com: proper-position-size, cmegroup.com: the-2-percent-rule

Learn more: Local lesson 4: Position sizing

A short checklist you run before the 8:30 a.m. CT open: marking the day's reference levels on your chart and noting the times of scheduled economic releases. It is a map of the day, not a trading signal.

Sources: cmegroup.com: trader-tips, nyse.com: hours-calendars

Learn more: Floor Trader lesson 14: Marking your chart

The previous session's closing price. For futures, a chart may show either the last traded price or the official daily settlement price set by the exchange, and the two can differ. Know which one your platform shows.

Sources: CFTC glossary (S), cmegroup.com: understanding-equity-index-daily-and-final-settlement, tradingview.com: previous-close, tradingview.com: can-i-switch-settlement-and-last-prices-as-close-for-futures

Learn more: Floor Trader lesson 4: Key reference levels

The highest and lowest prices of the previous trading session. For futures, that can mean the regular-hours session only or the full electronic session, so check which one your chart is using.

Sources: cmegroup.com: support-and-resistance, tradingview.com: regular-and-electronic-trading-hours-for-cme-futures

Learn more: Floor Trader lesson 4: Key reference levels

A paid test run by a private trading company: you trade a simulated account under the firm's rules, and if you reach its profit target without breaking a rule, you may earn a funded account on the firm's terms. Topstep's version, the Trading Combine, is sold as a monthly subscription. Rules vary by firm and can change.

Sources (Topstep help center, as of 2026-10-15; read on that date, and firm rules change): help.topstep.com: trading-combine-parameters, help.topstep.com: what-is-the-maximum-loss-limit, help.topstep.com: what-is-the-reset; and the lesson that teaches it, linked below.

Learn more: Local lesson 11: How prop evaluations work

A market that moves sideways, back and forth between a ceiling and a floor, because neither buyers nor sellers can push price past those levels. CME Group also calls this consolidation.

Source: cmegroup.com: trend-and-continuation-patterns

Learn more: Floor Trader lesson 1: Trend, range, and chop

A price area above the current price where a rising market may slow down, pause, or turn back down, often because sellers step in there. It is a zone, not an exact price, and it does not always hold.

Sources: CFTC glossary (R), cmegroup.com: support-and-resistance

Learn more: Floor Trader lesson 3: Support and resistance

How much a trade stands to make if it reaches its target, compared with how much it loses if it hits its stop. Divide the distance to the target by the distance to the stop: a 10-point target with a 5-point stop is 2 to 1.

Source: cmegroup.com: the-2-percent-rule

Learn more: Local lesson 5: Risk-to-reward

The most money you plan to lose on one trade if it hits its stop, decided before you enter. It is often a fixed dollar amount or a fixed percentage of the account. It is a plan, not a guaranteed maximum.

Sources: cmegroup.com: the-2-percent-rule, cmegroup.com: proper-position-size, cmegroup.com: risk-management-and-your-trade-plan, investor.gov: investor-bulletins-15

Learn more: Local lesson 2: Risk per trade

A short written set of limits you make before trading, such as your risk per trade, how you size positions, and your maximum loss for a day. Written rules can be checked before and after every session.

Sources: cmegroup.com: risk-management-and-your-trade-plan, cmegroup.com: proper-position-size

Learn more: Local lesson 14: Writing a risk plan

Closing a position in the contract month that is about to expire and opening the same position in the next contract month, so you stay in the trade.

Source: cmegroup.com: understanding-futures-expiration-contract-roll

Learn more: Runner lesson 9: Contract months and symbols

A side is one transaction, either a buy or a sell. A round turn is a complete trade, opening a position and then closing it, so it takes two sides. Fees are quoted either way, so check which one you are reading.

Sources: CFTC glossary (R), nfa.futures.org: nfa-assessment-fees

Learn more: Order Filler lesson 11: Commissions and fees

Regular trading hours: 8:30 a.m. to 3:00 p.m. CT (9:30 a.m. to 4:00 p.m. ET), the U.S. stock market's core session. Index futures trade far longer than this, nearly around the clock.

Sources: cmegroup.com: globex, nyse.com: hours-calendars

Learn more: Runner lesson 10: Trading hours

Holding a position you opened by selling. A short position makes money if the price falls and loses money if it rises. In futures you do not need to own anything to sell first.

Source: CFTC glossary (S)

Learn more: Runner lesson 11: Long and short

The difference between the price you expected when you sent an order and the price you actually got, usually counted in ticks.

Source: nfa.futures.org: forex-regulatory-guide

Learn more: Order Filler lesson 6: Fills and slippage

Two common moving averages. A simple moving average (SMA) gives every bar in its window equal weight. An exponential moving average (EMA) gives more weight to recent bars, so it reacts faster to new prices.

Source: cmegroup.com: understanding-moving-averages

Learn more: Floor Trader lesson 9: Moving averages

A trader with no business price risk to protect who takes on risk hoping to profit from correctly guessing where prices will go. Anyone trading their own account for profit is a speculator.

Source: CFTC glossary (S)

Learn more: Runner lesson 2: Hedgers vs. speculators

The difference between the bid price and the ask price, usually counted in ticks.

Sources: CFTC glossary (B), cmegroup.com: cme-liquidity-tool-user-guide

Learn more: Order Filler lesson 1: Bid, ask, and spread

A single number that tracks how a chosen group of stocks is doing, like a scoreboard for that part of the market. The S&P 500 and the Nasdaq-100 are stock indexes.

Sources: cmegroup.com: micro-e-mini-sandp-500.contractSpecs, cmegroup.com: micro-e-mini-nasdaq-100.contractSpecs, investor.gov: market-index

Learn more: Runner lesson 4: Stock index futures

An order that waits until the market trades at a chosen trigger price, then becomes a live order to buy or sell. A sell stop sits below the current price and a buy stop sits above it.

Sources: CFTC glossary (S), cmegroup.com: futures-order-types

Learn more: Order Filler lesson 4: Stop orders

A price area below the current price where a falling market may slow down, pause, or turn back up, often because buyers step in there. It is a zone, not an exact price, and it does not always hold.

Sources: CFTC glossary (S), cmegroup.com: support-and-resistance

Learn more: Floor Trader lesson 3: Support and resistance

A peak on the chart: a high where price turned back down, with lower highs on both sides of it. You can only confirm a swing high after price has moved away from it.

Sources: cmegroup.com: technical-patterns-reversals, tradingview.com: pivot-points-high-low

Learn more: Floor Trader lesson 2: Swing highs and lows

A trough on the chart: a low where price turned back up, with higher lows on both sides of it. You can only confirm a swing low after price has moved away from it.

Sources: cmegroup.com: technical-patterns-reversals, tradingview.com: pivot-points-high-low

Learn more: Floor Trader lesson 2: Swing highs and lows

The smallest amount a futures price can move up or down. For MES and MNQ one tick is 0.25 index points, so 4 ticks make 1 point.

Sources: CFTC glossary (T), cmegroup.com: micro-e-mini-sandp-500.contractSpecs, cmegroup.com: micro-e-mini-nasdaq-100.contractSpecs

Learn more: Runner lesson 6: Ticks and points

How much time each candle or bar on a chart covers. On a 5-minute chart, every candle shows five minutes of trading.

Source: cmegroup.com: chart-types-candlestick-line-bar

Learn more: Clerk lesson 7: Timeframes

A practice trading environment with no real money at risk, where you can place, change, and close orders the way you would on a real platform.

Source: cmegroup.com: welcome-to-the-trading-simulator

Learn more: Local lesson 15: Your first sim trade

A maximum loss level, used in some prop evaluations, that moves up as the account balance makes new highs but never moves down, so your room to lose is measured from your best balance. Topstep's Maximum Loss Limit, for example, trails the end-of-day balance and stops trailing once it reaches the starting balance. Rules vary by firm and can change.

Sources (Topstep help center, as of 2026-10-15; read on that date, and firm rules change): help.topstep.com: what-is-the-maximum-loss-limit, help.topstep.com: trading-combine-parameters; and the lesson that teaches it, linked below.

Learn more: Local lesson 11: How prop evaluations work

A stop order whose trigger price follows the market by a set distance as price moves in your favor, and stays fixed when price moves against you. Not every broker or platform offers it, and their rules differ.

Source: investor.gov: investor-bulletins-15

Learn more: Order Filler lesson 8: Moving and trailing stops

The general direction prices have been moving over time. In an uptrend the market keeps making progress higher; in a downtrend it keeps making progress lower. A trend describes the past, not a promise about what comes next.

Sources: CFTC glossary (T), cmegroup.com: trend-and-continuation-patterns

Learn more: Floor Trader lesson 1: Trend, range, and chop

The band of prices in a volume profile where a chosen share of the period's volume traded, built outward from the point of control. The usual setting is 70 percent, and traders can change it.

Source: tradingview.com: volume-profile-indicators-basic-concepts

Learn more: Floor Trader lesson 10: Volume profile

How much and how quickly price moves. A volatile stretch has big bars and fast swings; a quiet one has small bars and slow movement. Formally, it is measured as the annualized standard deviation of returns.

Source: CFTC glossary (V)

Learn more: Floor Trader lesson 12: Volatility and time of day

The number of contracts traded during a set period. Each contract that changes hands adds one, whether that trade opened or closed a position.

Sources: CFTC glossary (V), cmegroup.com: what-is-volume

Learn more: Clerk lesson 8: Volume

A chart tool that shows how much volume traded at each price over a chosen period, drawn as sideways bars along the price scale.

Source: tradingview.com: volume-profile-indicators-basic-concepts

Learn more: Floor Trader lesson 10: Volume profile

Volume-weighted average price: the average price traded since a starting point, where prices with more volume count for more. It starts over at its anchor, usually the start of each session.

Sources: cmegroup.com: understanding-equity-index-daily-and-final-settlement, tradingview.com: volume-weighted-average-price-vwap

Learn more: Floor Trader lesson 6: What VWAP is

Lines drawn above and below VWAP at a chosen multiple of the standard deviation, a statistical measure of how spread out the values have been since VWAP's anchor. They are reference lines, not signals.

Source: tradingview.com: volume-weighted-average-price-vwap

Learn more: Floor Trader lesson 7: Reading VWAP

The thin lines above and below a candle's body. The top of the upper wick marks the period's highest price and the bottom of the lower wick marks its lowest.

Source: cmegroup.com: chart-types-candlestick-line-bar

Learn more: Clerk lesson 3: Candle anatomy