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For futures contracts, brokerage commissions are typically quoted per contract for a round turn. Seat: A position on an exchange that gives the owner the right to conduct actual trades on the trading floor.

The number of seats is limited and represents an asset that seat owners can sell to other qualified and willing buyers. Short Position: The designation given to a situation where one has sold a futures contract. An individual in a short position has an obligation to offset the short position with a buy on the same futures contract, or deliver the commodity.

Speculating: Buying and selling futures or options contracts for the purpose of earning a profit by correctly anticipating commodity price changes. Speculating in commodity futures and options is generally considered a highrisk investment strategy.

Speculation occurs whenever a futures or options position is opened when you do not have or plan to have the physical commodity specified in the contract. Strengthening Basis: Occurs when the basis is getting larger.

Since basis can be a positive or negative number, a strengthening basis means a larger positive number or a smaller negative number. Basis gets stronger whenever the cash price increases relative to the futures price.

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