Hedger
Categories: Strategies, Investing and Trading,
Hedgers in the futures market try to offset potential price changes in the spot market by buying or selling a futures contract. In general, they are either producers or users of the commodity or financial product underlying that contract. Their goal is to protect their profit or limit their expenses. For example, a cereal manufacturer may want to hedge against rising wheat prices by buying a futures contract that promises delivery of September wheat at a specified price.If, in August, the crop is destroyed, and the spot price increases, the manufacturer can take delivery of the wheat at the contract price, which will probably be lower than the market price. Or the manufacturer can trade the contract for more than the purchase price and use the extra cash to offset the higher spot price of wheat.
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NASD
Categories: Brokerages, Compliance and Governance,
NASD is the largest self-regulatory organization (SRO) in the United States. Formerly known as the national association of securities dealers, NASD regulates broker-dealer firms and licenses registered representatives - better known as stockbrokers - who make a business of trading securities. In addition, NASD regulates trading in stocks, mutual funds, variable annuities, corporate bonds, and futures and options contracts on securities, and acts as regulator for a number of securities exchanges, NASD also reviews materials that investment companies provide to their clients and prospective clients to ensure those materials comply with the relevant guidelines. Through its BrokerCheck database, NASD provides a resource for investors to check the credentials of people and firms with whom they're considering working. The NASD website also provides investor education and alerts on current issues of importance to investors. Finally, NASD also resolves disputes between broker-dealers and their clients, through either mediation or arbitration. NASD disciplines firms and individuals who violate the rules.
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