Face Amount: The par value (i.e., principal or maturity value) of a security appearing on the face of the instrument.
Fail: The failure of a seller to deliver securities to the purchaser or of the buyer to deliver the proper funds as contracted.
Fannie Mae: Trade name for the Federal National Mortgage Association (FNMA).
Fiduciary: An individual or group, such as a bank or trust company, that acts for the benefit of another party or to which property is given to hold in trust.
Fill or Kill : The instructions to fill an entire order immediately or kill (cancel) the entire order.
Firm: A term designating a buy or sell order made for a security that will not change in price for a specified period of time. It is sometimes accompanied by a recall within a specified time, such as five or ten minutes.
Firming of the Market: A period of improvement when security prices tend to rise or to stabilize at current levels.
Fiscal Year: An accounting or tax period comprising any 12-month period. The federal government’s fiscal year starts October 1; the fiscal year of national chartered banks begins on January 1.
Flat: The price at which a bond is traded, including consideration for all unpaid interest accrued. Bonds that are in default of interest or principal are traded flat. Income bonds, which pay interest only to the extent earned, are usually traded flat. With most other bonds, the buyer pays the market price plus interest accrued since the last coupon or payment date, which is referred to as “and interest.”
Floating-Rate Note/Bond: A note or bond with a fluctuating interest rate. The rate is adjusted periodically according to a predetermined formula, based upon specific market indicators. Thus, it provides the investor with a rate of return comparable to the rate prevailing in the current market environment.
Floating Supply: The total amount of securities available for immediate purchase from dealers and other investors who wish to sell.
Freddie Mac: Trade name for the Federal Home Loan Mortgage Corporation (FHLMC).
Free: Delivery of securities upon presentation of a signed receipt. Payment is received by debiting or crediting accounts or by check, wire transfer, or other means.
Free and Open Market: A market in which supply and demand indicate prices for securities. Full Faith and Credit: Indicator that the unconditional guarantee of the United States government backs the repayment of a debt.