Options Glossary

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Fade

Selling a rising price or buying a falling price.

Fair Market Value

The value of an asset under normal conditions.

Fair Values

The theoretical value of what an option should be worth usually generated by an option pricing model such as the Black-Scholes option pricing model.

Fast Market

A stock with so much volume that the order entry systems have difficulty processing all of the orders.

Fill

An executed order.

Fill Order

An order that must be filled or canceled immediately.

Fill or Kill

Placing an order to buy or sell an exact number of units or none at all.

Financial Instruments

The term used for debt instruments.

Fixed Delta

A delta figure that does not change with the change in the underlying. A futures contract has a fixed delta of plus or minus 100.

Floor Broker

An exchange member who is paid a fee for executing orders.

Floor Ticket

A summary of the information on an order ticket.

Floor Trader

An exchange member who executes orders from the floor of the exchange only for his/her own account.

Fluctuation

A variation in the market price of a security.

Front Month

The first expiration month in a series of months.

Fundamental Analysis

An approach to trading research to predict futures and stock price movements based on a balance sheet and income statements, past records of earnings, sales, assets, management, products and services.

Futures

All contracts covering the purchase and sale of financial instruments or physical commodities for future delivery. These orders are transacted on a commodity futures exchange.

Futures Contract

Agreement to buy or sell a set number of shares of a commodity or financial instruments in a designated future month at a price agreed upon by the buyer and seller.