Last Notice Day (LND) – The last day on which the holder of a short futures position can give notice of their intention to deliver that cash commodity on a futures contract.
Last Trading Day (LTD) – The last day of trading for the current futures month. For example, the LTD for July ICE Futures Canada Barley is the trading day preceding the fifteen day of July.
Law of Demand - The relationship between the quantity consumers are willing to purchase and the price for each quantity. As prices rise the quantity purchased declines and vice versa.
Law of Supply - The relationship between the quantity supplied and price for each quantity. As the quantity supplied rises, prices fall, and vice versa.
Life of Contract – The time period between first day a futures contract traded and the most recent or last trade for the same futures contract.
Limit(up or down) -The maximum amount the price of a futures contract is permitted to trade above or below the previous session's closing price during one trading session. Limits are set by the rules of each exchange. In some futures contracts, the limit may be expanded or removed entirely during a trading session under the rules of certain exchanges.
Limit or Limited Order – A futures or options order in which the customer specifies a minimum sale price or a maximum purchase price. See "market order."
Liquidity – A term that describes a market's level or volume of trading activity. See "liquid market."
Liquid Market - A market in which there is sufficient activity to be able to accept large orders to buy or sell futures or options contracts, with little change to the current price. A liquid market will have sufficient volume that it allows ease of entry into, and exit from, the market. See also "volume."
Liquidation - The closing out or offsetting of a long or buy position in any futures contract. A long or buy futures position is "liquidated" by selling an equal number of the same futures contract. See also "cover."
Live Cattle Futures (LC) - Futures contracts traded at the CME representing 40,000 pounds of 55% Choice and 45% Select, Yield Grade 3, live, slaughter steers, averaging between 1100 pounds and 1350 pounds, delivered to one of several US delivery points.
Live-to-Cutout Spread – The difference between the packer purchase price of a slaughter steer and the total of the boxed-beef cutout value and the by-product value. The live-to-cutout spread, used in the U.S., provides an estimate of beef packer gross margins. The spread does not represent actual beef packer profitability because it does not account for any direct or indirect packer-incurred costs other than the cost of the slaughter steer.
Local- An individual, with exchange trading privileges, who trades futures and options for his own account, either directly on an exchange floor or connected to the exchange by computer. Locals trading activities help to provide market liquidity.
Locked limit - A price for a futures contract that as increased or decreased the maximum amount, allowed by a commodity exchange rules, during one trading session so that trading does not continue.
- An individual who has bought a futures or an option contract and who has not yet closed out that position by offsetting (selling) the contract.
- An individual or business, which owns inventory or has forward bought inventory. For example, a feedlot may be "long" barley if it has barley in storage or has forward-bought barley supplies.
- The opposite of "short."
Long hedge – A hedge of buying futures or buying call options to protect against a possible price increase of a cash commodity the hedger intends to buy. Also known as a "buyer hedge."
Long-liquidation – See "liquidation."
Lot - Usually any definite quantity of a commodity of uniform grade. A lot is also the standard unit of trading in a futures market.
MGEX – Minneapolis Grain Exchange.
Maintenance Margin - The minimum amount of money, usually smaller than the initial margin, that a futures trader or a seller of options must keep in his or her margin account at all times. A drop below maintenance level requires a deposit back to the initial margin level. See "margin call."
Margin - The funds, or collateral, deposited with futures commission merchants by buyers and sellers of futures contracts to guarantee performance on those futures contracts. The margin is a performance bond or guarantee, not a down payment. See "initial margin" and "maintenance margin."
Margin Call – A demand, from a brokerage firm to a futures trader or seller of options, for additional funds to restore the margin up to the minimum level because of unfavourable price movement or some other unforeseen event. See "maintenance margin."
Marketed to Market – The process whereby a futures exchange clearing house credits or debits a trader's margin account based on the closing futures price. Each and every futures trade is marked to market at the end of every trading day.
Market if Touched (MIT) – An order to buy or sell futures or options when a specified price is reached. A sell MIT is placed above the current market price and a buy MIT is placed below the current market price.
Marketing Agency - A national or regional body established under the Farm Products Agencies Act (Canada) to administer a marketing plan for a specific, supply-managed commodity. As of June 2013, the Egg Farmers of Canada, the Turkey Farmers of Canada, the Chicken Farmers of Canada, and the Canadian Hatching Egg Producers are examples. Provincial marketing boards are members of the marketing agency. The agency may also include members from food processing businesses or food processing associations.
Marketing Board – A compulsory marketing organization for certain primary agricultural products, operating under government regulated authority. The organization operates under provincial legislation such as Alberta's Marketing of Agricultural Products Act. It co-ordinates or regulates the marketing of a farm product within a province. All specified region, are compelled by law to adhere to the regulations of a marketing plan. Most Alberta marketing boards have power to regulate minimum farm gate prices, to negotiate master contracts between producers and buyers and to regulate production through licensing and quota systems. Marketing boards collect service charges, check-offs, levies or license fees to maintain their operations as well as finance research, market development, industry services, advertising, promotion, etc. Boards operating in Alberta as of June 2013 include Alberta Milk, the Alberta Chicken Producers, the Egg Farmers of Alberta, the Alberta Sugar Beet Growers, and the Alberta Vegetable Growers (Processing). Note: Some Canadian provinces use the words marketing board and marketing commission interchangeably.
Marketing Commission - A compulsory organization for certain primary agricultural products, operating under government regulated authority. The organization operates under provincial legislation such as Alberta's Marketing of Agricultural Products Act. All producers of a given product and in some cases, the first buyer of the product from the producer in a province or specified region, are compelled by law to adhere to the regulations of a marketing plan. Marketing commissions implement a producer service charge, check-off or levy to fund research, market development, industry services, advertising, promotion, etc. Some marketing commissions have authority to license producers and/or buyers. Commissions do not set minimum farm-gate prices, do not negotiate contracts between producers and processors, and do not manage production quotas. Examples of commissions operating in Alberta include the Alberta Barley Commission, Alberta Beef Producers, Alberta Canola Producers, Alberta Pork, Alberta Pulse Growers, and Alberta Wheat Commission.
Market Order – An order to buy or sell a futures contract or option contract to be filled immediately at the best price obtainable at the time.
Maximum Price Fluctuation – See "limit (up or down)."
Minimum Price Fluctuation – The smallest price change allowed by an exchange in trading of a specific futures contract. For instance, the minimum price fluctuation for Barley as of April 2013 is $0.10 per tonne.
Moving Average - An average price calculated by adding a new price and dropping the oldest price in the sequence of prices. For example, if a five-day moving average is being calculated, the price for the most recent day is added and the price six days prior is deleted before calculating the most recent moving average price.
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