F

Face value

See Par value

Fair value

An option value derived from a mathematical option valuation model

Fannie Mae

Securities issued by the Federal National Mortgage Association (FNMA) of the US.

Fast market

Rapid movement in a market caused by strong interest by buyers and/or sellers. In such circumstances price levels may be omitted and bid and offer quotations may occur too rapidly to be fully reported.

Fill or kill order

An order submitted to the order book with a specified size and at the option of the member firm, a specified limit price which either executes in its entirety against eligible orders at the price of those orders or is rejected in full from the order book.

Final dividend

The dividend paid by a company at the end of its financial year, recommended by the directors, but authorised by the shareholders at the company’s Annual General Meeting.

Financial future

A futures contract based on a financial instrument.

Financial Services Action Plan (FSAP)

The FSAP is the European Commission’s response towards improving the single market in financial services. Adopted in 1999, the FSAP contains a list of 42 measures to be implemented, grouped around four strategic objectives (retail markets; wholesale; prudential rules and supervision; and wider conditions for an optimal single financial market). The Markets in Financial Instruments Directive forms a major part of the implementation of the FSAP.

Firm quote

A market-maker’s quote which is a price which he/she is committed to deal.

First notice day

The first day on which notices of intention to deliver actual commodities against futures market positions can be received.

Fixed-interest security

A security or bond which offers an annual guaranteed interest payment. There is usually a fixed date at which the bond is redeemed.

Flexible exchange (FLEX) option

A semi-customised, exchange-traded put or call option issued by a clearing house. Customisation is limited to expiration date, strike and exercise style (European or American).

Floor

An agreement with a counterparty that sets a lower limit to interest rates for the floor buyer for a stated time period.

Flotation

The occasion on which a company’s shares are offered on the market for the first time.

Forward rate agreement (FRA)

An agreement to borrow or lend at a specified future date at an interest rate that is fixed today. The borrowing and lending is purely notional as the contract allows the purchaser to fix interest costs for a specific future period.

Fourth market

The direct trading of securities between institutional investors without the use of brokers or dealers.

Free float

The number of shares not held by corporate insiders that are freely tradable in the public market or markets on which a company's securities are listed.

Freimakler

Independent dealers admitted to trade on German stock exchanges by the board of governors of the individual exchange. Freimakler participate in stock exchange dealings as intermediaries. They do not conclude business directly with buyers or sellers of securities. Freimakler, unlike Kursmakler, are not subject to any legal restriction with regard to the execution of business on their own account. The main area of trading of Freimakler is trading in the securities on other markets than the official trade. They may, however, also deal in officially listed securities.

Freiverkehr

The free market section of German stock exchanges.

Front month

The nearest active contract month of a futures contract.
See also Spot month

Front running

A situation where the employees of a brokerage firm or a bank trade in equity shares using price-sensitive information that is privately available to the firm.

Fully paid

Applied to new issues, when the total amount payable in relation to the new shares has been paid to the company.

Fungibles

Instruments that are equivalent, substitutable and interchangeable in law.

Furthest month

The month that is furthest away from settlement of a futures or options contract.

Futures contract

A contract traded on a futures exchange which requires the delivery of a specified quality and quantity of a commodity, currency or financial instrument in a specified future month, if not liquidated before the contract matures.