Trading Basics
LIFFE
London International Financial Futures and Options Exchange. Now owned by Euronext.
Other Trading Basics
Bid
Traders can go short at the bid price.
The terminology is from the broker point of view, they are bidding to buy from you.
Backwardation
Backwardation occurs when a bid price exceeds the ask price.
This usually occurs when stock is suspended or under a share repurchase scheme.
It can also mean that a futures contract will trade at a higher price when it is coming close to expiring.
The opposite of backwardation is known as contango.
American Option
An option that can get exercised at any time during its life.
European options can only be exercised at the end.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
