FAANG - Acronym for the stocks of five well-known American technological companies: Meta (META), formerly known as Facebook, Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG), Google's parent company. Jim Cramer, the anchor of CNBC's Mad Money, popularized the phrase FAANG in 2013 by praising these businesses for being "completely dominating in their sectors." Apple was added as the second "A" in the acronym to the original phrase "FANG" in 2017.
Fair value - The projected price at which an object is purchased or sold when the buyer and seller voluntarily agree on a price. An individual or organization may look at real market transactions for comparable assets, estimate the asset's predicted earnings, and calculate the cost to replace the asset in order to determine the fair value of a good or financial investment.
Federal Funds Rate (Fed Funds Rate) - The interest rate that banks with excess reserves charge banks that require overnight loans to meet reserve requirements at a Federal Reserve district bank. Since it is determined daily by the market, as opposed to the prime rate and discount rate, which are periodically adjusted by banks and the Federal Reserve Board, it is the most sensitive indication of the direction of interest rates.
Federal Reserve Board (The Fed) - The Federal Reserve System's governing body controls the nation's money supply by determining the discount rate and tightening or relaxing the economy's access to credit.
Financial materiality - The concept of an event or piece of information that should be taken into account when making investment decisions because of its reasonable likelihood of having an influence on a company's financial situation or operational performance.
Fibonacci extensions - A tool to set profit targets or predict how far a market may rise when a decline is complete. Extension levels are yet another potential location for a price reversal. These levels are created by connecting several points on a chart using Fibonacci ratios (as percentages). Fibonacci extension levels that are frequently encountered are 61.8%, 100%, 161.8%, 200%, and 261.8%.
Fibonacci retracement - Based on the Fibonacci sequence, a series of continuously growing numbers where each number is equal to the sum of the two numbers before it, Fibonacci retracement levels are horizontal lines that show where support and resistance are expected to occur. A percentage is connected to each level. How much of a previous move the price has retraced is shown by the percentage. There are four Fibonacci levels for retracement: 23.6%, 38.2%, 50%, 61.8%, and 78.6%. The 50% Fibonacci ratio, 50% is one of the most commonly utilized ratios. The indication can be drawn between any two important price points, such as a high and a low, making it handy. The levels between those two spots will subsequently be created by the indicator.
Financial sector - A segment of the economy made up of businesses and institutions that offer financial services to wholesale and retail clients. This industry group includes a wide range of businesses, such as banks, investment organizations, insurance providers, and real estate companies.
Fixed income fund - A fund or portfolio where the majority of the investments are bonds. There is no set maturity date and no assurance of repayment.
Fixed income security - A financial instrument that consistently pays a fixed interest rate.
Float - The amount of money that is briefly tallied twice within the banking system as a result of delays in recording a deposit or withdrawal. These delays are generally caused by the time it takes to process paper checks. As soon as a check is deposited, a bank credits the customer's account. The time it takes to receive and record a check from the payer's bank varies. The amount of the check "exists" in two locations, in the accounts of both the payer's and recipient's banks, until the check clears the account upon which it is drawn.
Floating stock - The number of shares of a specific stock that are available for trading. Stocks with a low float have few shares outstanding. Floating stock is calculated by deducting closely held shares and restricted stock from the total number of outstanding shares of a company.
Forward contract - A tailored agreement between two parties to purchase or sell an item at a predetermined price at a later date. Although its non-standardized nature makes it particularly suitable for hedging, a forward contract can be utilized for speculating or hedging.
Free cash flow (FCF) - Free cash flow is the amount of money a company has left over after paying for operational costs and capital asset maintenance (FCF). In contrast to earnings or net income, free cash flow is a measure of profitability that accounts for both spending on assets and equipment as well as changes in working capital from the balance sheet. Non-cash expenses are also taken out of the income statement.
Fund - A collective sum of funds from a group of investors used for the purchase of securities. Firms in the securities sector, sometimes known as mutual fund companies, and bank trust departments (also known as collective funds) are the two primary sources of funding.
Fundamental analysis (FA) - A type of financial analysis which looks at relevant economic and financial elements to calculate the intrinsic value of a security. An investment's intrinsic value is determined by the financial health of the issuing company, as well as the general market and economic climate. Fundamental analysts look at all potential influences on a security's value, including microeconomic elements, like managerial efficiency, and macroeconomic factors, like the status of the economy and market circumstances. The ultimate objective is to arrive at a figure that an investor can use to gauge whether an asset is being undervalued or overvalued by other investors when compared with its present price.
Futures - Futures are financial derivative contracts that bind parties to buy or sell an asset at a specified future time and price. Regardless of the market price at the date of expiration, the buyer or seller must buy or sell the underlying asset at the agreed-upon price. Physical commodities and financial instruments are examples of underlying assets. Futures contracts are standardized to make trading on a futures market easier and to specify the quantity of the underlying asset. Futures can be utilized for speculation or hedging.