DEFINITION of 'Blue Month'

The month during which there is the greatest trading activity in derivatives trading. These derivatives can be options, futures, or other type of derivative-based instruments. The occurrence of a blue month is typically of interest to hedge funds and large financial institutions because the volume of derivative trading can be used as a technical trading signal.

BREAKING DOWN 'Blue Month'

Volumes of daily traded shares are much more accessible than the volume of daily derivative trading. However, options and futures trading activity is also publicly accessible to keen investors. The month when the volume of derivative trading is highest is referred to as the blue month.

RELATED TERMS
  1. Exchange Traded Derivative

    An exchange traded derivative is a derivative that is standardized ...
  2. Underlying Security

    An underlying security is a stock, bond, currency, or commodity ...
  3. Derivative Product Company - DPC

    A derivatives product company is a ratings oriented subsidiary ...
  4. Derivative

    A derivative is a security with a price that is dependent upon ...
  5. Derivatives Time Bomb

    Derivatives time bomb is a descriptive term for a possible market ...
  6. Equity Derivative

    A derivative instrument with underlying assets based on equity ...
Related Articles
  1. Trading

    Derivatives 101

    A derivative investment is one in which the investor does not own the underlying asset, but instead bets on the asset’s price movement with another party.
  2. Investing

    Complex Derivatives Made Simple

    Many ETFs hold derivatives. Here's how to be sure if you own a derivatives-based ETF.
  3. Trading

    Are Derivatives Safe For Retail Investors?

    These vehicles have gotten a bad rap in the press. Find out whether they deserve it.
  4. Personal Finance

    Careers in the Derivatives Market

    The growing interest in and complexity of derivatives means opportunities for job seekers.
  5. Investing

    Corporate Futures: Big Names, Big Risk

    We don't often think of Disney and derivatives, but it is one of many companies that use derivatives to hedge risks.
  6. Trading

    Examples Of Exchange-Traded Derivatives

    We look at some of the most common exchange-traded derivatives.
  7. Financial Advisor

    A Fresh Look At The Financial Markets

    Different markets provide unique opportunities and risks for investors. Find out more here.
  8. Tech

    A Cryptocurrency Derivatives Boom Might Be On Its Way

    After being on the back burner of policymakers and companies in the space, cryptocurrency derivatives might soon have their moment later this year.
  9. Trading

    Any Way the Wind Blows, You Can Trade the Weather

    You can trade on anything these days, including the weather.
RELATED FAQS
  1. How big is the derivatives market?

    Learn how different calculations can reduce the estimate of the total derivatives market by as much as 90 to 95%. Read Answer >>
Hot Definitions
  1. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  2. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  3. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
  4. Inventory Turnover

    Inventory turnover is a ratio showing how many times a company has sold and replaces inventory over a period.
  5. Watchlist

    A watchlist is list of securities being monitored for potential trading or investing opportunities.
  6. Hedge Fund

    A hedge fund is an aggressively managed portfolio of investments that uses leveraged, long, short and derivative positions.
Trading Center