Forex Signals from the Leading Forex Alert Provider! :: Forex Signals

Fast Market - Rapid movement in a market caused by strong interest by buyers and/or sellers. In such circumstances, price levels may be omitted, and bid and offer quotations may occur too rapidly to be fully reported.

Fed Fund Rate - The interest rate on Fed funds. This is a closely watched short-term interest rate as it signals the Fed's view as to the state of the money supply.

Federal Reserve System of US - The central banking system of the U.S. comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership in the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state-chartered banks.

Fill - The process of completing a customer's order to buy or sell a currency pair.

Fill Price - The price at which a buy or sell order was executed.

Fill or Kill - An order which must be entered for trading, normally in a pit three times, if not filled is immediately canceled.

First Notice Day - The first day that a notice of intent to deliver a commodity can be made by a clearinghouse to a buyer in fulfillment of a given month's futures contract.

Fisher effect - The relationship that exists between interest rates and exchange rate movements, so that in an ideal situation, interest rate differentials would be exactly offset by exchange rate movements.

Five Against Note Spread - FAN - A spread in the futures markets created by taking offsetting positions in futures contracts for five-year treasury notes and ten-year treasury bonds.

Financial Risk - The risk that a firm will be unable to meet its financial obligations.

Fixed Exchange Rate - Official rate set by monetary authorities. Often the fixed exchange rate permits fluctuation within a band.

Fixed-Income Arbitrage - An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities.

Flat - A price that is neither rising nor declining. In forex, the condition of being neither long nor short in a particular currency. Also referred to as 'being square'. A bond that is trading without accrued interest.

Flexible Exchange Rate - Exchange rates with a fixed parity against one or more currencies with frequent revaluations. A form of managed float.

Floating exchange rate - A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the foreign-exchange market. Contrast to fixed exchange rate regime.

FOMC - Federal Open Market Committee, the committee that sets money supply targets in the U.S. which tend to be implemented through Fed Fund interest rates etc.

Foreign Currency Effects - The extent to which the changes in a foreign currency affects the return on a foreign investment.

Foreign Exchange - The purchase or sale of a currency against sale or purchase of another.

Foreign Exchange Risk - The risk of an investment's value changing due to changes in currency exchange rates. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movements in exchange rates. Also known as "currency risk" or "exchange-rate risk".

Forex - An abbreviation of Foreign Exchange (FX).

Forex Futures - An exchange-traded contract to buy or sell a specified amount of a given currency at a specified price on a specific date in the future. All forex futures are written with a specific termination date, at which point delivery of the currency must occur, unless an offsetting trade is made to counteract the initial position.

Forex Club - Groups formed in the major financial centers to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International.

Forward - A transaction that settles at a future date.

Forward Points - The points that are added to or subtracted from the spot rate to calculate the forward rates for a forward foreign exchange transaction. These points are based on the differential between the interest rates of the two currency pairs.

Forward Contract - A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. Although the delivery is made in the future, the price is determined on the initial trade date.

Forward Margins - Discounts or premiums between spot rate and the forward rate for a currency. Normally quoted in points.

Forward Operations - Forex transactions, on which the fulfillment of the mutual delivery obligations is made on a date later than the second business day after the transaction was concluded.

Forward Outright - A commitment to buy or sell a currency for delivery on a specified future date or period. The price is quoted as the spot rate minus or plus the forward points for the chosen period.

Forward Rate - Forward rates are quoted in terms of forward points, which represents the difference between the forward and spot rates. In order to obtain the forward rate from the actual exchange rate the forward points are either added or subtracted from the exchange rate. The decision to subtract or add points is determined by the differential between the deposit rates for both currencies concerned in the transaction. The base currency with the higher interest rate is said to be at a discount to the lower interest rate quoted currency in the forward market. Therefore, the forward points are subtracted from the spot rate. Similarly, the lower interest rate base currency is said to be at a premium, and the forward points are added to the spot rate to obtain the forward rate.

Forward Rates - The net price resulting from calculating the forward points and subtracting them from the existing spot rate. This is the rate at which a currency can be purchased or sold for delivery in the future.

Forward Rate Agreement - FRA - A contract that determines the rate of interest, or currency exchange rate, to be paid, or received, on an obligation beginning at a some future start date.

Free Reserves - Total reserves held by a bank minus the reserves required by the authority.

Front Office - The activities carried out by the dealer, normal trading activities.

Fundamentals - The macro economic factors that are accepted as forming the foundation for the relative value of a currency, these include inflation, growth, trade balance, government deficit and interest rates.

Fundamental Analysis - Analysis based on economic factors.