Rally

An upward price movement. See Recovery.

Range

The difference between the highest and lowest prices recorded during a specified time period, usually one trading session, for a given futures contract or commodity option.

Ratio writing

When an investor writes more than one option to hedge an underlying futures contract. These options usually are written for different delivery months. Ratio writing expands the profit potential of the investor’s option position. Example: an investor would be ratio writing if he is long one August gold contract and he sells (writes) two gold calls, one for February delivery, the other for August.

Recovery

Rising prices following a decline.

Registered Commodity Representative (RCR)

A person registered with the exchange(s) and the CFTC who is responsible for soliciting business, “knowing” his/her customers, collecting margins, submitting orders, and recommending and executing trades for customers. A registered commodity representative is sometimes called a “broker” or “account executive.

Regulations (CFTC)

The guidelines, rules, and regulations adopted and enforced by the Commodity Futures Trading Commission (the CFTC is a federal regulatory agency established in 1974) in administration of the Commodity Exchange Act.

Reparations

Parties that are wronged during a futures or options transaction may be awarded compensation through the CFTC’s claims procedure. This compensation is known as reparations because it “repairs” the wronged party.

Reportable positions

Positions where the reporting level has been exceeded. See also Reporting level.

Reporting level

An arbitrary number of contracts held by a trader that must be reported to the CFTC and the exchange. Reporting levels apply to all traders; hedgers, speculators, and spreaders alike. Once a trader has enough contracts to exceed the reporting level, he has a “special account,” and must report any changes in his positions.

Resistance

A horizontal price range where price hovers due to selling pressure before attempting a downward move.

Retender

The right of a futures contract holder, who has received a notice of intention to deliver from the clearinghouse, to offer the notice for sale on the open market, thus offsetting his obligation to take delivery under the contract. This opportunity is only available for some commodities and only within a certain period of time.

Ring

A designated area on the exchange floor where traders and brokers stand while executing trades. Instead of rings, some exchanges use pits.

Risk disclosure document

A document outlining the risks involved in futures trading. The document includes statements to the effect that: you may lose your entire investment; you may find it impossible to liquidate a position under certain market conditions; spread positions may not be less risky than simple “long” or “short” positions; the use of leverage can lead to large losses as well as large profits; stop-loss orders may not limit your losses; managed commodity accounts are subject to substantial management and advisory charges. There is a separate risk disclosure document for options which warns of the risks of loss in options trading. This statement includes a description of commodity options, margin requirements, commissions, profit potential, definitions of various terms, and a statement of the elements of the purchase price.

Rolling hedge

Changing a futures hedge from one contract month to another. Rolling a short hedge may be advisable when more time is needed to complete the cash transaction to avoid delivery on the futures contract. Hedge rolling may also be considered to keep the hedge in the less active, more distant months, thus reducing the likelihood of swift price movements and the resulting margin calls.

Round turn

A complete futures transaction (both entry and exit); for example, a sale and covering purchase, or a purchase and liquidating sale. Commissions are usually charged on a “round-turn” basis.