Financial Glossary

Forward

A forward trade (or contract) is the price of an asset for delivery at a defined future date, which is also the date of expiry. Most forward trades can be closed prior to the expiry date, to limit any loss or take a profit, for example.

Free margin

Funds on the trading account which may be used to open a position. It’s calculated as account value less necessary margin.

FTSE 100

A market capitalisation weighted index of the top 100 companies listed on the London Stock Exchange. This is often used as an indicator to assess the broader UK market.

Fundamental analysis

This involves analysing and valuing financial assets based on factors such as news, financial statements and earnings forecasts, company strategy and risk assessments, demand and supply forecasts, projections of future economic growth, industry developments and government policy. In fundamental analysis, an investor uses real data to evaluate a stock’s value rather than using charts and technical analysis to make trading decisions.

Futures

A future rate is notionally an agreement to conduct a transaction at some specified time in the future, with the price agreed now. A futures CFD will automatically expire at a specified time in the future, whereas a spot or cash CFD has no such expiry time. Often the price of a future contract will differ from the cash price. Also see Fair value, Expiration/expiry.

FOK

Fill or kill (FOK) is a type of time-in-force designation used in securities trading that instructs a brokerage to either execute a transaction or not at all.