Glossary

All A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

F

Federal Obligations

Fixed interest securities, which are issued with a five-year maturity and annual interest rate payout of the bond as a continuous issue.

Federal Treasury Obligations

Fixed interest securities, which are issued as continuous issues of the Federation in two versions. Type A has a maturity of six years with an increasing interest rate and an annual payout. Repayment is the nominal sum. Type B has a maturity of seven years. The interest rates are accumulated during maturity and paid in a lump sum with the capital when due. Federal treasury obligations are absolutely safe, which means the bond is liable with its assets and internal revenue.

Fill-or-Kill Order

Fill-or-Kill orders are either completely used or cancelled.

Final Accounting Price

The official accounting price set at last trading day of a contract.

Financial Future

An obligation, which binds both contracting partners, on the delivery or cancellation of a financial product of a certain quality and quantity at an agreed price and at a set time. Financial Futures is a collective term for standardised financial futures contracts, which are traded on the stock exchange.

Financial Futures Contracts

An obligation, which binds both contracting partners, on the delivery or cancellation of a financial product of a certain quality and quantity at an agreed price and at a set time. Financial Futures is a collective term for standardised financial futures contracts, which are traded on the stock exchange.

First Advice of Delivery Date

The earliest point of time when the futures contracts seller can inform the purchaser through the clearing house that upon maturity of the contract, he intends the physical delivery of the basic security.

Fixed Hedge

A hedging strategy whereby the entire amount of the basic security with options is hedged and the hedge is only cancelled when the underlying risk no longer exists. The hedging position remains unaltered through the duration of the hedge.

Floater

Floating rate notes or floaters are loans with variable interest rates whereby the interest rate is regularly adjusted (e.g. every six months) to a certain benchmark interest rate. This benchmark interest rate is mostly oriented towards the short-term investment rate, for example the 6-month LIBOR, the daily set average interest rate in London. This means: with floaters, the investor takes part in continuous changes to the respective benchmark interest rate. This then is a particular benefit if the corresponding rate increases sharply throughout the duration of the loan. This however also means that through the constant adjustment of the interest at the time of purchase, it cannot be seen exactly what return the loan will bring by maturity. Some issuers simply agree a minimum interest rate, but then also often limit the upper interest calculation with a maximum value, the so-called cap. “Reverse floaters” are a conversion of classic floaters. Even with this type of loan the interest rate is regularly adjusted to a benchmark interest rate. The difference between the floaters: this adjustment appears in an inverse ratio. Here a constant basic interest rate is determined from which the benchmark interest rate is deducted – for example 12 percent minus LIBOR. Result: the stronger the decline of the respective benchmark interest rate, the higher the interest calculation of the loan.

Floating Averages

Floating averages are the simplest trend lines. The individual points are displayed through mathematical images of the last daily rates in a certain period. Depending on the size of the period to be considered, the most different type of floating averages can as a result be generated. Therefore included in the most significant mathematical means are the 38-, 100-, and 200-day lines for short, medium and long-term considerations. The 200-day line (here the average of the last 200 daily rates is generated each day) counts as the most important, most reliable, floating average. It shows the long-term trend of a security. With the short-term averages, the reliability of the trend statements is essentially less. We would recommend our investors to use the corresponding floating averages when inspecting a limited commitment in the CCR share.

Floor

A contractually tradable right to a previously defined minimum interest rate.

Floor Trading

A trading method on the stock exchange whereby the floor traders shout out their supplies and demand or use hand signals for this.

Fluctuation Margin Option

The simultaneous purchase of a cap and the sale of a floor. If the cap premium can be partly or fully financed through the sale of a floor, free hedging is achieved.

Foreign Currency Futures

A contractual agreement to deliver a standardised amount of a certain currency at a previously negotiated price at a later agreed maturity date.

Foreign Currency Futures Contract

A contractual agreement to deliver a standardised amount of a certain currency at a previously negotiated price at a later agreed maturity date.

Foreign Currency Option

An agreement to buy or sell a set amount of foreign currency at an agreed price.

Foreign Currency Swap

A forward spot sale of a currency against another currency and simultaneous buyback or vice versa.

Forward Contract

An agreement between two parties to buy or sell a certain amount of specified goods at previously agreed terms, whereby delivery and payment occur at a later date. The terms of each contract are to be set by the individual parties. In contrast to the futures, forward deals are not conducted on the stock exchange but instead on the OTC trade.

Forward Market

A market where purchasing and selling agreements are concluded for the delivery and payment at a future date, where all details of the agreement have already been settled when concluding the business transaction.

Forward Rate Agreement

An agreement between two parties whereby one party obliges the other party, against receipt of premium at a future time, to pay the difference between the set interest rate and the market interest rate at an agreed amount.

FRA

An agreement between two parties whereby one party obliges the other party, against receipt of premium at a future time, to pay the difference between the set interest rate and the market interest rate at an agreed amount.

Future

A contractual agreement to buy or sell a standardised amount of certain goods at a previously agreed price at a set future date.

Future Rate Agreement

A contractual agreement to accept or deliver an interest rate tool, which is correspondingly similar to the contact regarding the validity period and interest calculation, at a previously negotiated price at an agreed later maturity date.

Futures Contract

A contractual agreement to buy or sell a standardised amount of certain goods at a previously agreed price at a set future date.

Futures Market

The opposite to the spot market, a market on which standardised contracts are traded, which are to be fulfilled at a later date.

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