Glossary - F

FAIR VALUE
The theoretical price at which a futures contract would be expected to trade.
 
FALSE BREAKOUT
A short lived price movement that breaks through a prior high or low before succumbing to a large move in the opposite direction.
 
FAST MARKET
Term used to define an unusually hectic market.
 
FED
The Fed is short for Federal Reserve, which is the central banking system of the United States. The Fed issues announcements regarding U.S. monetary policy which can have significant effect on the Forex market.
 
FIAT CURRENCY
Fiat money is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country.
 
FIBONNACI NUMBERS
Leonardo Fibonacci was an Italian mathematician born in the 12th century. He is known to have discovered the "Fibonacci numbers," which are a sequence of numbers where each successive number is the sum of the two previous numbers.
e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
These numbers possess a number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number.
 
FILL
Used to describe when a market order is executed, commonly expressed as having been "filled".
 
FILL OR KILL ORDER
A limit order that must be filled immediately or canceled.
 
FINANCIAL OMBUDSMAN SERVICE
Was established in 2001 as a result of the Financial Services and Markets Act 2000 to help settle disputes between consumers and UK based businesses providing financial services, such as banks, building societies, insurance companies, investment firms, financial advisers and finance companies.
 
FINANCIAL SERVICES COMPENSATION SCHEME
This is a "statutory fund of last resort" in the United Kingdom, set up under the Financial Services and Markets Act 2000 to compensate customers of "authorized financial services firms" in the event of their insolvency. It consolidated previous compensation schemes into one combined scheme. The scheme covers deposits, insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.
 
FISCAL CLIFF
The United States fiscal cliff refers to the effect of a series of laws that if unchanged, will result in tax increases, spending cuts, and a corresponding reduction in the budget deficit starting in 2013. The result of these laws will be a 19.63% increase in tax revenue and a 0.25% reduction in spending. The double effect of tax increases in conjunction with cuts in government expenditure may result in the US economy falling over the cliff. The term was first used by the FED Chairman Ben Bernanke.
 
FIXED INCOME SECURITY
Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable. Commonly known as a bond.
 
FOMC
The Federal Open Market Committee is made up of twelve presidents or governors from the various Reserve Banks in the USA. They meet regularly to decide, amongst other things, what US interest rates should be.
 
FOREX MARKET
The Forex Market is the biggest financial market in the world in terms of trading volume. Daily trading volume varies from 1.5 to 3 trillion dollars. As a comparison the daily trading volume of the world‟s biggest stock exchange, NYSE, is approximately 20 billion dollars. It is therefore impossible for an individual to manipulate or influence the market.
 
FOREIGN INVESTMENT
Foreign investment refers to the net inflows of investment in an economy other than that of the investor.
 
FSA
The Financial Services Authority. The Government appointed body responsible for regulating the financial service industry within the UK.
 
FTSE 100 INDEX
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the 'footsie'  is a share index of the 100 most highly capitalized UK companies listed on the London Stock Exchange.
 
FUNDAMENTAL ANALYSIS
Analysis focusing on the global economy, overall state of individual economies, interest rates, FX rates, capital flows and changes in GDP levels.
 
FUTURE
A futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date.