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Fair Value
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The theoretical price that the S&P future should trade above the cash index. |
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False Breakout
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A breakout of a chart pattern that aborts. To ensure that a breakout is genuine, look for confirmation by the same or other indicators. |
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Fibonacci Number
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The sequence of numbers (0,1,2,3,5,8,13,21,34,55,89,144,233...), discovered by the Italian mathematician Leonardo de Pise in the 13th century. It is the mathematical basis of the Elliott Wave Theory, where the first two terms of the sequence are 0 and 1 and each successive number is the sum of the previous two numbers. |
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Fibonacci Ratio
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The ratio between any two successive numbers in the Fibonacci sequence, known as phi. The ration of any number to the next higher number is approximately 0.618, and to the lower number approximately 1.618, after the first four numbers of the series. |
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Flags or Pennants
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Sideways market price action that has a slight drift in price counter to the direction of the main trend; a consolidation phase. The difference between flag and pennant formations is that the flag shows a rectangular consolidation period and the pennant is represented by two converging trendlines, resembling a symmetrical triangle. These patterns seem to occur at about the midpoint of the market move. |
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Floor Broker
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An individual who executes orders on the trading floor or an exchange for any other person. |
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Floor Trader
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Member of an exchange who are personally present on the trading floors of exchanges to make trades for themselves and their customers. Sometimes called scalpers or locals. |
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Fundamental Analysis
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An analytical technique for the buying and selling of stocks based on the belief that stock prices are determined by the underlying value of a company in terms of its cash, current assets, and earnings. |
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Futures Contract
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A standardized binding agreement to buy or sell a specified quantity or grade of a commodity at a later date, i.e., during a specified month. Futures contracts are freely transferable and can be traded only by public auction on designated exchanges. |
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Futures Commission Merchant
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A firm or person engaged in soliciting or accepting and handling orders for the purchase or sale of futures contracts, subject to the rules of a futures exchange and, who, in connection with solicitation or acceptance of orders, accepts any money or securities to margin any resulting trades or contracts. The FCM must be licensed by the CFTC. |
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There
is a substantial risk of loss in futures trading.