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Trading terms glossary
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F

Face Value
Face value represents the amount that must be paid out at a bond or stock’s maturity. It may also mean the dollar value of a security, set by the issuer. 

Fair value
Fair value is the present value of a stock, once the stock’s intrinsic value is considered. This may cause debate, as fair value is based on a subjective understanding. 

Federal Reserve
Referred to as the ‘Fed’ for short, the Federal Reserve is the central banking system in the United States.

Fiat currency
Money that is given legal tender status by a government and is not linked to the value of physical commodities like gold or silver.

Fibonacci retracement
A Fibonacci retracement is a technical analysis tool that can help traders identify when to open and close a position, or when to apply stops and limits to their trades. It involves drawing trend lines on price charts between two points, usually the price highs and lows, in order to find possible areas of support and resistance. 

Fill
Fill is the term used to refer to the completion of an order to trade a financial asset. There is no guarantee that every trade will become filled.

Financial instrument
A financial instrument is a contract between two parties, which act as financial assets. These can be traded and settled. 

Financial market
A marketplace where the trading of securities occurs. The financial market provides an avenue for the purchase and sale of financial assets. 

Fixed costs
Fixed costs are the expenses incurred by a company that are not impacted by the scale of production. Fixed costs remain constant for a given period.

Floating exchange rate
A floating exchange rate is where the price of a currency is determined by supply and demand factors, relative to other currencies. Currencies with floating exchange rates can be traded without any restrictions, unlike fixed exchange rates. 

FOMC
The FOMC stands for the Federal Open Market Committee, which is a committee of the Federal Reserve System. The FOMC is in charge of decisions around interest rates and the US money supply.

Forex
Forex is a global marketplace for trading international currencies. It is sometimes referred to as foreign exchange or FX.

Forward contract
A contract that has a defined date of expiry, which obliges the holder to buy or sell an asset by a specific date. The contract can vary and be customised between different instances.

Fundamental analysis
Fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing the factors that could influence its price in the future. This form of analysis is based on external events and influences, as well as financial statements and industry trends.

Learn more about exit systems for a fundamental approach

Futures contract
A futures contract is an agreement between to buy or sell an asset at a defined price on a specified date in the future. They are also sometimes referred to simply as ‘futures.’