Glossary

Much of the volume is position unwinding rather than a view, so price action means little.

The buyer's maximum loss is the premium, which is the whole appeal. The seller collects that premium and carries the entire remaining risk — the half most beginners never look at.

Nothing ever traded as this series. It is a construction, and the rule used to build it decides where every historical level sits.

For a commodity this is the nearest thing to reading an annual report. It tells you what would actually be delivered, where, and in what quantity, which is what the price is a price of.

Roughly in line with short-term interest rates in an ordinary market. A negative number is not automatically bearish: check for a dividend before expiry first, because the futures holder does not receive it and the price discounts it.

The instrument your order actually joins. Levels, entries and stops belong on its chart; the spliced continuous chart is for shape and trend.

Bought either to profit from a fall or to insure a holding against one. The gain is large but capped, because a price cannot go below zero.

A second undisclosed choice on top of the adjustment method. It changes which sessions appear on your chart at all, so two platforms can disagree about the candles as well as the levels.

In that window the price answers to warehouse stock and delivery logistics rather than to anybody’s view of the commodity, and the participants left in the book are not the ones a chart pattern was learned on.

It produces a falling chart in a market that is doing nothing, which is why a decay and a breakdown look identical on a premium chart. It accelerates close to expiry.

Reads as bearish and frequently is not. Rule out a dividend due before expiry, and remember that a crowded long book in a stock under F&O ban can only sell futures — the discount that produces is plumbing, not opinion.

The mechanism behind the expiry-week calendar. Positions are unwound because holding them got expensive on a fixed schedule, not because anyone changed their mind about the company — which is why so many of those moves reverse in the new series.

It shrinks to nothing at expiry by construction, so a currency futures chart can fall over a month in which the spot rate rose. Measure the premium as a distance and compare it with the move your setup expects.

There is a partial mechanism — writers hedging their exposure do exert some pull near expiry — but it is weak, easily swamped by news, and it recalculates as open interest shifts.

It takes every single-stock future open at expiry and every single-stock option that finishes in the money, while index contracts stay cash-settled — which is why the two behave so differently in the final week. A cheap option finishing marginally in the money becomes an obligation for the full strike price times lot size.

The only route that carries a short past an expiry date without a paid roll, with tenures running to about a year. The catch is availability: in exactly the names a bearish thesis tends to be about, there may be no lender at any price, and the lender can recall early.

A given strike in a given expiry is a distinct instrument with a start date and an end date. The same strike number next month is a different contract with different time remaining and different liquidity.

It inflates post-tax profit until a published expiry date, then profit drops with nothing happening operationally.