What Is a Floor Trader? A floor trader is an exchange member who executes transactions from the floor of the exchange, exclusively for their own account. Floor traders used to use the open outcry method in the pit of a commodity or stock exchange, but now most of them use electronic trading systems and do not appear in
What Is a Flotation Cost? Flotation costs are incurred by a publicly-traded company when it issues new securities and incurs expenses, such as underwriting fees, legal fees, and registration fees. Companies must consider the impact these fees will have on how much capital they can raise from a new issue. Flotation costs, expected return on
What Is a Flow Derivative? A flow derivative is a securitized product that aims to provide maximum leverage to profit from small movements in the market value of the underlying. Flow derivatives are typically based on the value of currencies, indexes, commodities, and in some cases individual stocks. Some popular flow derivatives include vanilla options
What Is a Flower Bond? Flower bonds, which were issued by the U.S. Treasury until April 1971, matured at par value to pay the bondholder’s federal estate taxes upon their death. All flower bonds reached maturity by 1998. Key Takeaways Flower bonds, which were issued by the U.S. Treasury until April 1971, matured at par
What Is Flow of Costs? Flow of costs refers to the manner or path in which costs move through a firm. Typically, the flow of costs is relevant with manufacturing companies whereby accountants must quantify what costs are in raw materials, work in process, finished goods inventory, and cost of goods sold. Flow of costs
What Is FMAN? FMAN refers to one of three regular options contract expiration cycles, representing February, May, August, and November. Option cycles refer to a pattern of months in which options contracts expire. Every options series nowadays has at least four expiration months trading. Under the current rules, the first two months are always the two near months
What Is Foaming the Runway? Foaming the runway in a financial context is the practice of making a last-minute infusion of cash into a company to forestall bankruptcy. It can also refer to the practice of providing a financial buffer for companies that are perhaps one crisis or loss away from insolvency. Key Takeaways Foaming
What Is Free on Board (FOB)? Free on Board (FOB) is a shipment term that defines the point in the supply chain when a buyer or seller becomes liable for the goods being transported. Purchase orders between buyers and sellers specify the FOB terms and help determine ownership, risk, and transportation costs. “FOB Origin” or
What Is a Focused Fund? A focused fund is a mutual fund that holds a only relatively small variety of stocks or bonds that are similar along some dimension. By definition, a focused mutual fund focuses on a limited number stocks in a limited number of sectors, rather than holding a broad or diversified mix
What Is a Flash Crash? The term flash crash refers to an event in the electronic securities markets wherein stock withdrawal orders rapidly amplify price declines before quickly recovering. The result of a flash crash appears to be a rapid sell-off of securities that can happen over a few minutes, resulting in dramatic declines. But
