Fair value An option value derived from a mathematical option valuation model.
Fannie Securities issued by the Federal National Mortgage Association (FNMA) of the USA.
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.
Final Dividend The dividend paid by a company at the end of its financial year, recommended by the directors, but authorized by the shareholders at the company's Annual General Meeting.
Financial future A futures contract based on a financial instrument.
Firm Quote A market-maker's quote which is a price which he/she is committed lo deal.
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.
Flotation The occasion on which a company's shares are offered on the market for the first time.
Fourth market The direct trading of large blocks of securities between institutional investors without the use of brokers or dealers.
Freie Makler Independent dealers admitted to trade on German stock exchanges by the Board of Governors of the individual exchange.
Freie Makler participate in stock exchange dealings as intermediaries. They do not conclude business directly with buyers or sellers of securities. Freie Makler, 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 Freie Makler 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 the German stock exchanges.
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.
Gamma The rate at which a delta changes over time.
Gearing A company's debts expressed as a percentage of its equity capital.
Geldkurs The bid price on German and Swiss exchanges.
Genussscheine Dividend right certificate (German and Swiss stockexchanges). Security incorporating the right to participate in the net
profit and the liquidation proceeds of a company as well as the right to subscribe to new shares in the case of a rights issue. However the holder has no membership rights, in particular he cannot attend shareholder meetings. The dividend-right certificate may be in a bearer or registered form.
Geregelter Markt The Regulated Market section of the German stock exchanges.
Gilt Edged 1) In the UK loans issued on behalf of the government to fund its spending. 'Longs' are gilts with a redemption date greater than 15 years, 'Mediums' those with a redemption date between 5 and 15 years and 'Shorts' those with a redemption date within 5 years. 2) In the USA top quality stocks issued by corporations with a known record for profit and of paying dividends over the years. In the USA also refers to high quality bonds.
Ginnie Mae Securities issued by the Government National Mortgage Association (GNMA) of the USA.
Going long The purchase of a stock or commodity for investment or speculation.
Going short The selling of a stock or commodity not owned by the seller.
Grey market The market in a new issue prior to formal offering.
Gross Before deduction of tax.
Grossing-up Calculating a gross or pre-tax rate of interest or dividend by adding a notional amount of tax to the net, or post-tax amount received.
Handel Ondersteunend Systeen (HOS) Computerized Trade Support System of the Amsterdam Stock Exchange. All professional market parties of the
Amsterdam Stock Exchange are linked to a central computer. The system provides an efficient order routing registration and execution of the orders into transactions, as well as a position prognosis facility to determine the best prices. Fully automated links with the price dissemination system as well as the fixed settlement system are also provided.
Hedge The purchase or sale of options or futures contracts as a temporary substitute for a transaction to be made at a later date. Usually it involves opposite positions in the cash or futures or options market.
Hoekman Each officially quoted security trading on the Amsterdam Stock Exchange is assigned to a hoek where this security is traded. In a hoek at
least two hoekmen compete in trading the security in which they are allowed to execute orders. Based on orders received from banks and brokers, a price is determined by the hoekman. All hoekman in the same security must agree on the price.
Hors-cote The market on the Paris Stock Exchange where issues not traded on the official list-or second market are traded.
Index Linked Gilt A Gilt, the interest and capital of which change in line with the Retail Price Index.
Indicative Quote A market-maker's price which is not firm.
Inhaberaktien Swiss or German bearer shares.
Initial margin The margin required to secure a new futures or options position.
Insider Dealing The purchase or sale of shares by someone who possesses 'inside' information about the company; i.e. information on the company's
performance and prospects which has not yet been made available to the market as a whole, and which, if available, might affect the share price.
Inter-bank rates The bid and offer rates at which international banks place deposits with each other.
Inter-dealer broker A specialist broker who acts as an intermediary between market-makers who wish to buy or sell securities to improve their book positions, without revealing their identities to other market-makers.
Interim Dividend A dividend declared part way through a company's Financial year, authorized solely by the directors.
Intersettle A sister company of SEGA, the Swiss Clearing Corporation, which has been set up for international settlement purposes.
In-the-money A call option is in-the-money if the price of the underlying instrument is higher than the exercise/strike price. A put option is in-the-money if the price of the underlying instrument is below the
exercise/strike price. See Out-of-the-money.
Intrinsic value The amount by which an option is in-the-money. The intrinsic value is the difference between the exercise/strike price and the
price of the underlying security.
Investment Trust A company whose sole business consists of buying, selling and holding shares.
ISIN code The International Securities Identification Number. The structure of the ISIN code is : two-digit alpha country code (ISO 3166) or
'XS' for securities numbered by CEDEL or Euroclear; nine-digit alpha-numeric code based on the national securities code or the common CEDEL/Euroclear code: a check digit computed according to the modulus 10 'double add double'.
Itayose This is a method of trading employed on Japanese exchanges. Under the itayose method, which is used in the case of opening trades and the like, all orders reaching the floor before the opening are treated as simultaneous orders, and in accordance with the principle of priority, eacb buy order is compared with sell orders till its quantity and price are matched by a sell order and treat the price as a single price for the consummation of the transaction.
Kassakurs On German stock exchanges, the official cash settlement price established once per day, for orders of the amount of less than 50 shares.
Kassenverein German securities clearing and deposit bank. 534
Kerb Trading Trading that takes place after the market has closed.
Kursmakler The function of the Kursmakler is to act as an intermediary between persons admitted to deal on German stock exchanges and to fix
official prices of those securities to which he or she is entrusted. The Kursmakler are subject to certain legal restrictions in the conclusion of business on their own account.
Kursmaklerkammer A public body representing the Kursmakler of the German stock exchanges. The Kursmaklerkammer is responsible for the allocation of
securities among the Kursmakler, for the control of the settlement of prices and for the editing of the Official List.
Last trading day The day on which trading ceases for an expiring contract.
LIBID The London Interbank Bid Rate. The rate charged by one bank to another for a deposit.
LIBOR The London Interbank Offered Rate, the rate charged by one bank to another for lending money.
LIMEAN The average of the LIBOR and LIBID rates.
Limit The maximum price fluctuation permitted by an exchange from the previous session's settlement price for a given contract.
Limit order An order to buy or sell a specified amount of a security at a specified price or better.
Liquidity The level of trading volume in a market.
Listed security The securities of a private company or public body which is traded on a securities exchange and' has signed a listing agreement with the stock exchange.
Loan Stock Stock bearing a fixed rate of interest. Unlike a debenture, loan stock may be unsecured.
Local A futures trader who normally trades on an exchange on his/her own account.
Locked market A market is locked when the bid price equals asked price.
Long Owning a security.
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