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Financial Times Stock Exchange Index (FTSE) The United Kingdom equivalent of the United States S&P500 Index and the Australian All Ordinaries Index. The FTSE lists the 100 largest public companies traded on the London Stock Exchange. Usually referred to in the trade as "Footsie." |
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First Market See Primary Market. |
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floor broker A registered agent, working on exchange trading floors, who trades on behalf of clients. |
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floor traders Employees of brokerage firms who work on exchange trading floors. Exchange members who trade only for their own accounts or for accounts in which he or she holds some financial interest. |
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Fourth Market The direct trading of large blocks of securities between institutional investors through a computer network, such as Instinet, rather than on an exchange. |
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fundamental analysis In equities markets, fundamental analysis attempts to determine the value of a particular company through analysis of the earnings, the management, and the relative data of that company. |
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gap A significant price movement of a security or commodity between two trading sessions, such that there is no overlap in the trading ranges for the two days; or sometimes, such that the second day's opening price is outside the first day's trading range. A day in which the daily range is completely above the previous day's daily range. See also inside day. |
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good-till-canceled order An order that is left in force until it is executed or canceled. |
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Hang Seng A market-value weighted index of the stock prices of the 33 largest companies on the Hong Kong market. |
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hedge An investment made in order to reduce the risk of adverse price movements in a security by taking an offsetting position in a related security, such as an option or short sale. |
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hedge fund A fund usually used by wealthy individuals and institutions that is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leveraging, program trading, swapping, arbitrage, and derivatives. Because they are restricted by law to fewer than 100 investors, the minimum investment is typically $1 million. The general partner (manager) usually receives performance-based compensation. |
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holy grail system A mythical trading system that perfectly follows the market and is always right, producing large gains and zero drawdowns. No such system exists. |
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index A benchmark against which financial or economic performance is measured, such as the S&P 500 or the Consumer Price Index. |
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indicator A way of summarizing data in a meaningful way to help traders and investors make decisions. |
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individual retirement account (IRA) A tax-deferred retirement account for an individual that permits individuals to set aside up to $2,000 per year, |
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