FOK (Fill or Kill) Order
A limit order to buy or sell a security in which the client instructs the broker to execute the order immediately in its entirety. If the order cannot be executed, it is canceled. FOK orders are usually used when a client wants to transact a large quantity of a security--one that would cause a significant price change if a market order to buy or sell were entered.
See: Fill; Limit Order; Market Order
A nickname for the "Financial Times' " FT-SE 100 Index (Financial Times-Stock Exchange 100 stock index). It is a market value-weighted index of 100 alpha stocks traded on the London Stock Exchange.
See: Alpha; Index
A listing prepared annually by Forbes magazine of the largest U.S. publicly-owned corporations. Corporations are ranked by sales, assets, profits, and market value.
See: Fortune 500
Predicting current and future market trends using existing data and facts. Analysts rely on technical and fundamental statistics to predict the directions of the economy, stock market and individual securities.
See: Fundamental Analysis; Technical Analysis
A listing prepared annually by Fortune magazine of the 500 largest U.S. industrial corporations, ranked by sales. Fortune also prepares a listing called the Fortune Service 500 for non-industrial corporations.
See: Forbes 500
A plan whereby an employee may contribute pretax earnings to a qualified tax-deferred retirement plan--also called "cash or deferred arrangement" (CODA) or "salary reduction plan." Withdrawals for other than death, disability, termination of employment, or qualifying hardship prior to the age of 59 1/2 may be subject to a 10% penalty tax.
See: Non-Qualified Plan; Qualified Pension Plan or Trust; Tax Deferred
Direct trading of large blocks of securities between institutional investors to avoid brokerage commissions. Quotes can be obtained through a service called Instinet, an acronym for Institutional Networks Corporation.
See: Commission; Instinet
Less than one full share of stock. An investor may have a fractional share as the result of a dividend reinvestment program. If the amount of the dividend is not sufficient to purchase a full share of stock, the investor will be credited with a fractional share until enough dividends are received to purchase a full share. For instance, if XYZ stock issues a $1.00 dividend and the stock is trading at $10.00, a customer with dividend reinvestment will be credited a fractional share of 1/10.
See: Dividend; Dividend Reinvestment Plan
FRB (Federal Reserve Board)
Acronym for the Federal Reserve Board, the governing body of the Federal Reserve System. The Federal Reserve Board is comprised of seven members appointed by the President and subject to confirmation by the Senate. In order to ensure members' independence from political influence, each member serves a 14-year term. The FRB is responsible for setting monetary policy for the U.S. and has the authority to determine bank reserve requirements, set the discount rate, regulate the availability of credit, and control the purchase of securities on margin.
See: Discount Rate; Federal Reserve System
1: A situation that occurs when a member of an underwriting syndicate withholds a portion of a public offering of a new securities issue with the intent to sell it at a price higher than the initial offering price. This is a violation of securities regulations because the underwriter is not making a legitimate offering to the public.
2: A situation that occurs when a customer purchases a security, then sells the same security and uses the proceeds to pay for the purchase. This practice is prohibited by Federal Regulation T which requires that customers pay for securities within prespecified time frames. Firms are required to freeze or restrict customer accounts that engage in this practice for 90 days.
See: Frozen Account; Initial Public Offering
A sales charge in connection with the purchase of an investment, which is applied at the time of purchase. Generally this term is associated with mutual funds, but may also apply to life insurance policies and limited partnerships.
See: Investment Company; Limited Partnership; Load Mutual Fund; Mutual Fund; No Load Mutual Fund; Sales Charge
Term used to identify brokerage industry personnel who deal directly with the public, such as sales and trading personnel.
See: Back Office
A situation that occurs when a securities or commodities trader takes a position in a security in order to take advantage of a large upcoming transaction of which he is aware.
A brokerage account in which the customer may only purchase securities up to the amount of cash in the account and only sell securities if the certificates are held in the account. Generally, an account is frozen for freeriding, which is a violation of Federal Regulation T. Frozen accounts may also be called restricted accounts.
See: Freeriding; Regulation T
Term which refers to the requirements established by the Securities and Exchange Commission regarding public divulgence of material facts by corporations.
Full Faith and Credit
Term used to describe a security for which a government entity pledges its full taxing and borrowing power, plus revenue other than taxes to support the payment of interest and repayment of principal. For instance, Treasury securities are backed by the full faith and credit of the U.S. government.
See: Principal; Treasuries
Full Service Broker
A broker that provides a variety of brokerage and financial services to clients, including offering advice on investment decisions. Generally full service brokers charge higher commissions than discount brokers who execute trades but do not give any investment advice.
See: Broker; Discount Broker; Retail House
Price at which a corporation's fundamental earnings power is fully reflected in the security's market price. If the stock goes up from that price, it is considered to be overvalued. If the stock goes down, it is undervalued.
See: Overvalued; Undervalued
Research and examination of a corporation's financial statements and balance sheets to predict the future price movements of their securities. Among other indicators, fundamental analysts study past records of assets, earnings, sales, products, management and markets to predict future trends. By assessing a firm's prospects, fundamentalists can evaluate whether a security is overvalued or undervalued. In contrast to fundamental analysis, technical analysis does not consider a corporation's financial data. Technical analysts rely on price and volume movements of stocks.
See: Balance Sheet; Financial Statement; Fully Valued; Income Statement; Market Analysis; Technical Analysis; Volume
A person who thinks that a corporation's security prices are determined by its future earnings and dividend abilities. Besides studying a corporation's financial data, they will also examine its industry and how the economy will affect the company's core business.
See: Dividend; Fundamental Analysis; Technical Analyst
A contract to buy or sell a prespecified amount of a commodity or financial instrument at a particular price on an agreed upon date in the future. Futures differ from options in that the holder of an option has a choice whether or not to exercise the option, but the parties involved in a futures contract are obligated to complete the transaction.
See: Futures Market; Options
A commodity exchange where futures contracts are traded.
See: Futures Contract; Spot Market