Glossary Of Trading

Fed (the US Federal Reserve Bank)

The Central Bank of the United States, established by Congress in 1913, administers the US’ Federal monetary policy by setting long-term interest rates, conducting monetary research and regulating financial institutions.

Fiat Currency

A fiat currency is one of no inherent value, save the value promised upon it by government regulation. The Latin word is the 3rd-person of fio – “let it be done”.

Fibonacci Sequence

A series of values according to which - among others - retracements and reversals along a trend can be expected. The values of the Fibonacci series were defined by the 12th-century Italian mathematician, Leonardo Bonacci, and is calculated by adding two subsequent numbers to derive the next number in the sequence.

Fill or Kill

An order that will be cancelled (killed) if the conditions for its filling are not entirely met.

Fiscal Policy

The policy that determines the manner in which a government uses income derived primarily through taxation, bonds issuance, and others. An expansionary policy is usually adopted during a recession, while a contractionary policy is usually adopted alongside an expanding economy.

Foreign Exchange (Forex/FX)

The exchange of currencies belonging to different states or entities. The forex market is decentralized and global. It operates 24/5, whenever an exchange is open anywhere in the world.

FTSE (Financial Times & London Stock Exchange)

The FTSE, established in 2002 by the London Stock Exchange and the Financial Times, provides data services and market indexes. The FTSE 100, for example, tracks the top 100 stocks traded on the London Stock Exchange.

Fundamental analysis

The study of an asset’s inherent value. Current affairs and economic data may influence the value of a national currency or the demand/supply of a commodity; a sector’s health and a company’s management and market position may influence a company’s perceived value.

Futures /Forwards

A binding contract (an obligation, not an option) between 2 parties to buy and/or sell a financial instrument or commodity at a future time and at a predetermined (contracted) price. Futures are usually traded at an exchange, whereas forwards are usually traded over-the-counter.