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In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the underlying. Derivatives can be used for a number of purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation, or getting access to otherwise hard-to-trade assets or markets.
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as stock that is only traded privately, such as shares of private companies that are sold to investors through equity crowdfunding platforms. Investments are usually made with an investment strategy in mind.
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FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker for trading on the foreign exchange market. FXCM allows people to speculate on the foreign exchange market and provides trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil. It is based in London.
A commodity trading advisor (CTA) is US financial regulatory term for an individual or organization who is retained by a fund or individual client to provide advice and services related to trading in futures contracts, commodity options and/or swaps. They are responsible for the trading within managed futures accounts. The definition of CTA may also apply to investment advisors for hedge funds and private funds including mutual funds and exchange-traded funds in certain cases. CTAs are generally regulated by the United States federal government through registration with the Commodity Futures Trading Commission (CFTC) and membership of the National Futures Association (NFA).
Spoofing is a disruptive algorithmic trading activity employed by traders to outpace other market participants and to manipulate markets. Spoofers feign interest in trading futures, stocks, and other products in financial markets creating an illusion of the demand and supply of the traded asset. In an order driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe that there is pressure to sell or to buy the asset.
Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, transfer agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor.
References
- ↑ Staff, Investopedia (18 November 2003). "Wash Trading".
- ↑ "Self Trade Prevention Functionality" (PDF). theice.com. September 2013.
- 1 2 Cong, Lin William; Li, Xi; Tang, Ke; Yang (December 2022). "Crypto Wash Trading". Working Paper Series. doi: 10.3386/w30783 .
{{cite journal}}: Cite journal requires|journal=(help) - 1 2 von Wachter, Victor; Jensen, Johannes Rude; Regner, Ferdinand; Ross, Omri (2022-02-07). "NFT Wash Trading: Quantifying suspicious behaviour in NFT markets". arXiv: 2202.03866 [cs.CR].
- ↑ Khalid, A. (4 February 2022). "Traders are selling themselves their own NFTs to drive up prices". Engadget.
- ↑ "CFTC Orders Coinbase Inc. to Pay $6.5 Million for False, Misleading, or Inaccurate Reporting and Wash Trading | CFTC". www.cftc.gov. Retrieved 2023-03-29.
- ↑ "Financial Services Authority" (PDF). www.fsa.gov.uk.
- ↑ Roy, Dorris, M. "Independentreserve.com/au" . Retrieved 25 April 2021.
{{cite news}}: CS1 maint: multiple names: authors list (link) - ↑ Advait Jayant - The Economics of Wash Trading in the NFT Markets , retrieved 2023-09-22