Face Value - The debt (or loan) amount that appears on the face of the certificate and that the issuer must pay at maturity.

Factor - A decimal between 0 and 1 that represents the amount of mortgages remaining in a pool of mortgage-backed securities.

Factor Book - A tabular presentation that shows relevant information about factors, value of remaining mortgages, and interest rates on mortgage-backed securities.

Factor Table - A table used to compute the outstanding principal on Pass-Throughs -- Ginnie Maes, Freddie Macs and Fannie Maes.

Fannie Mae - Nickname for the Federal National Mortgage Association and the mortgage-backed securities it issues.

Farmer Mac - Nickname for the Federal Agricultural Corporation and the securities it issues.

Federal Farm Credit System - Established by Congress to provide credit to farms and farm-related enterprises. The FFCS is also an issuer of agency securities.

Federal Reserve Board - The government agency that regulates credit.

Federal Reserve System - The nation's central monetary authority and the Treasury Department's agent for selling new issues of Treasury bills, notes, and bonds.

FHA - Abbreviation for the Federal Housing Administration. The FHA is also an issuer of agency securities.

FHA Experience - An estimate of the average life of a pool of mortgage-backed securities in relation to experience tables developed by the Federal Housing Administration.

Fiduciary - A person legally appointed in the Purchase and Sales department.

Fill or Kill (FOK) - An order that requires execution of the entire quantity immediately. If not, the order is canceled.

Final Dividend - The dividend paid by a company at the end of its financial year, recommended by the directors but authorized by the shareholders at the company's annual general meeting.

Financing Corporation - An agency created to assist the Savings and Loan industry by retailing securities to the public. Also the nickname for its securities.

Fiscal Agent - The authority who is responsible for issuing new securities of federal agencies.

Fiscal Year - The twelve-month period during which a business maintains its financial records. Since this cycle does not have to coincide with the calendar year, it is known as the fiscal year.

Fixed Annuity - Insurance company guarantees dollar amount of payments to the annuitant for the period covered under the contract.

Flat - A bond trading without accrued interest is said to be trading "flat."

Floor Broker - An exchange member who, as such, is permitted to conduct business on the exchange floor.

Flotation - The occasion on which a company's shares are offered on the market for the first time.

Flower Bond - A specially identified series of Treasury bonds accepted at full par in payment of estate taxes.

FOK - See Fill Or Kill.

Fourth Market - Trading directly between institutional investors on a system named Instinet.

Freddie Mac - Nickname for the Federal Home Mortgage Association and the mortgage-backed securities it issues.

Free Stock - Loanable securities; that is, securities that can be used for loan or hypothecation. These securities are stock in a margin account that represents the debit balance.

Frozen Account - An account in which all purchases must be paid for in cash in advance for a period of 90 days because of failure to make timely or proper payment in the past.

FT Index - Refers to the Financial Times Industrial Ordinary Share Index, also known as the "30 Share Index." This started in 1935 at 100, and is based on the prices of 30 leading industrial and commercial shares. They are chosen to be representative of British industry, rather than of the Exchange. Government stocks, banks and insurance companies are not included. The Index is calculated hourly during the day with a "closing index" at 4:30 p.m.

FT-SE 100 Share Index - Popularly known as "Footsie"; an index of 100 leading UK shares listed on the London Stock Exchange providing a minute-by-minute picture of how share prices are moving. It started on January 3, 1984 with the base number of 1,000. Also forms the basis of a contract in the London Traded Options Market (LTOM) and the London International Financial Futures Exchange (LIFFE).

FT-SE Eurotrack 200 Index - Denominated in ECUs, this comprises the stocks of the FT-SE 100 Index plus the constituents of the FT-SE Eurotrack 100 Index. The UK component is weighted to ensure that the 200 Index closely tracks the major benchmark indices. It started on Monday, February 25, 1991 with a base value of 1,000 as at close of business on Friday, October 26, 1990.

Full Trading Authorization - Owner of the account gives power to another person to buy, sell and make withdrawals from the account.

Fully Disclosed - All client accounts of the Introducing Broker are introduced to another Broker/Dealer who clears the clients' trades. This second broker is called a Clearing Broker. The names and addresses of the client accounts are "fully disclosed" to the Clearing Broker whose name is also disclosed to the clients on the statements and confirmations. The Clearing Broker does all the bookkeeping involved in settling the trades and keeping the client accounts in proper form.

Fully Paid - Applied to new issues, when the total amount payable in relation to the new shares has been paid to the company.

Fund Exchange - Ability to shift a mutual fund investment from one fund to another sponsored by the same mutual fund family.

Fund Family - An investment management company that offers several types of mutual funds.

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Gearing - A company's debts expressed as a percentage of its equity capital. High gearing means debts are high in relation to equity capital.

General Obligation (GO) Bond - A municipal bond whose issuer's ability to pay back principal and interest is based on its full taxing power.

Ginnie Mae - Nickname for the Government National Mortgage Association and the mortgage-backed securities it issues.

GNMA - See Government National Mortgage Association.

Good Delivery - Securities delivered to the broker from the seller that are properly endorsed and in proper order to be delivered to the buyer.

Good-Til-Canceled (open) Order (GTC) - An order that does not expire at the end of the day it is entered. Instead, it remains in force until it is either executed or canceled. Freetrade cancels all GTC orders at the end of the next month after the order has been placed.

Government Bond - Debt security issued by the U.S. Government.

Government National Mortgage Association (GNMA) - A government corporation that provides primary mortgages through bond issuances. Its securities are called Ginnie Maes.

Growth Stock - Stock of a company in a new industry or of a company participating in an emerging industry.

GTC - See Good-til-Canceled (Open) Order.

Guardian - Someone who manages securities in a minor's account or someone who handles the affairs of an incompetent person.

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Hedge - To reduce the risk in one security by taking an offsetting position in a related security.

HH Savings Bonds - A savings bond that pays semiannual coupon interest, unlike EE savings bonds.

House Maintenance Call - Demand to the client for additional funds from the brokerage firm because the equity in the client's margin account has fallen below the minimum amount allowed by the firm.

House Requirement - The minimum amount of equity brokerage firms require margin clients to maintain in the account.

Hypothecation - A brokerage firm's pledging of margin securities at a bank to secure the funds necessary to carry an account's debit balance.

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Immediate-or-Cancel (IOC) - An instruction on an order that requires execution of as many lots as can be filled immediately, and the rest canceled.

Income Bonds - Bonds issued when the ability of the issuing company to pay interest is questioned. They are speculative instruments that pay high rates of interest.

Income Stream - A strategy of arranging bonds so that they produce a consistent series of payments.

Indenture - The terms of a corporate bond. Also known as deed of trust, it appears on the face of the bond certificate.

Industrial Revenue (ID Revenue, ID Revs, or Industrial Rev) Bond - A form of municipal bond whose issuer's ability to pay interest and principal is based on revenue earned from an industrial complex.

Insider - Person with nonpublic information on a corporation. Directors, officers and stockholders owning more than 10% of any one class of stock are usually considered insiders.

Insider Dealing - The purchase or sale of shares by someone who possesses "inside" information about the company; i.e., information on the company's performance and prospects which has not yet been made available to the market as a whole and which, if available, might affect the share price.

Interest Rate Risk - The prospect that Treasury and agency securities will decline in price if economy-wide interest rates rise.

Interim Dividend - A dividend declared part way through a company's financial year, authorized solely by the directors.

Intermediate-Term Bonds - Those maturing five to ten years after original issue.

In-The-Money - Used to describe options* that the holder would profit from exercising. Call options are in-the-money when the underlying security's value is greater than the option's strike price. Put options are in-the-money when the underlying security's value is less than the option's strike price.

Investment Banker - See underwriter.

Investment Trust - Company whose sole business consists of buying, selling and holding shares.

IRA - Individual Retirement Accounts - a tax-deferred retirement plan created by the U.S. government.

Issue - (1) The process by which a new security is brought to market. (2) Any security.

Issue Date - Month and day that a security is initially issued.

Issued Stock - Stock sold to the public.

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Joint Account - An account with two or more individuals acting as co-owners.

Joint Tenants with Rights of Survivorship (JTWROS) - A joint account which allows the remaining tenant(s) to retain the deceased tenant's interest in the account.

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