Friday, February 3rd 2012 - 06:04:14 pm

TradeStocksAmerica.com Glossary of Terms

Glossary of Terms
(Some abbreviations are for communication on the Trading Room)

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Fast market - A financial market experiencing high trading volume and increased volatility.

Fed Discount Rate – is the rate at which banks borrow money from a Federal Reserve Bank.

Federal Funds Rate – is the interest rate that banks lend their deposits to other depository institutions on a short term basis, usually one day. This has been modified in March 2008 to allow some non-depository institutions such as investment banks to access the Federal Discount window and borrow money along with banks.

Federal Reserve – The Federal Reserve System was formed by the US Government in 1913 and is considered as the central bank system. The formal purpose as stated in the Federal Reserve Act is ….. To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.

Fibonacci studies - were developed by a mathematician named Leonardo Fibonacci around 1200 AD. He discovered a relationship of what is now referred to as Fibonacci numbers while he studied the population growth in rabbits. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, and so on. Any given number is approximately 1.618 times the preceding number and any given number is approximately .618 times the following number. This relationship is used today by some people to evaluate target points where stocks tend to go.

Fixed Income - A security that pays a stated interest rate, such as a bond, money market instrument, or preferred stock.

Float - The number of shares of a security that are in the hands of the investors and available for trading by the public.

FNMA - Federal National Mortgage Association or Fannie Mae, a congressionally chartered corporation which buys mortgages on the secondary market, packages them together and sells them as mortgage-backed securities to investors on the open market. Monthly principal and interest payments are guaranteed by FNMA but not by the U.S. Government.

Forex market - An over-the-counter market where buyers and sellers execute foreign exchange transactions; also called foreign exchange market.

Forward P/E - Price/earnings ratio, using earnings estimates for the next four quarters.

Freefalling – refers to a stock’s price dropping straight down without any apparent buying.

FTSE - The Financial Times Stock Exchange 100 stock index, a market cap weighted index of stocks traded on the London Stock Exchange. Similar to the S&P 500 in the United States.

Fundamental analysis - is the study of economic, industry, and company conditions to determine the value of a company’s stock. Fundamental analysis typically focuses on key statistics in a company’s financial statements to determine if the stock price is correctly valued. Revenues, P/E ratios, PEG ratios, book value, and earnings are examples of information evaluated in fundamental analysis.

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