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Span

• Is the Standard Portfolio Analysis of Risk (SPAN®) system. It was initially developed and implemented by the Chicago Mercantile Exchange. Other exchanges and clearinghouses have since adopted this methodology. It evaluates the performance bond, or margining requirements, for positions on a portfolio basis. It matches and evaluates similar instruments. These instruments can be futures, options, and derivatives. SPAN® tries to indicate the largest potential one day loss that a portfolio might experience. These losses can be attributable to adverse price and volatility behavior. Since the inception of SPAN®, methodologies such as Value at Risk (VAR), have also focused on standard deviation (confidence level) statistics. SPAN® uses 16 different scenarios or market conditions in the calculation of the risk arrays.

• To cover all contingencies within a specified range.

 
 Embedded terms in definition
 Basis
Bond
Chicago mercantile exchange
Confidence level
Cover
Derivatives
Exchange
Futures
Instruments
Market
Options
Performance bond
Portfolio analysis
Portfolio
Range
Risk arrays
Risk
Scenarios
Standard deviation
Value at risk
Volatility
 
 Referenced Terms
 Crop year: Is a time Span which does not necessarily correspond to a calendar year. A crop year commences with the beginning of the harvest and continues until the start of the next harvest. Each crop has its own specifications.

 Good till canceled: Is an order which remains in effect until it is executed or canceled. The cancellation can be predetermined such as can in 2 months (giving a specific time) or left open and not specifying any time. However, many brokerage firms and traders may require ratification of all open orders at the end of the month or other time Span of their choosing to minimize errors.

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