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Glossary D to F

DAX 30 Index

The index of the biggest 30 companies listed on the Frankfurt Stock Exchange in Germany. The DAX is a 'total return' index in that it measures the returns from dividends as well as share price performance.

Day Order

The order placed will be active, i.e. pending, until the end of the day, or until it has been executed.

Day Trading

Refers to opening and closing the same position, or positions, within a single day’s trading and before the value date changes.


The formal reduction in the value of a currency against other currencies.


Opposite of a premium, anything selling below its normal price is said to be trading at a discount, for example, the amount by which a bond's par exceeds its market price.


That part of a company's profit after tax which is distributed to shareholders.


The Dow Jones Industrial Average; the index that highlights the performance of the top 30 blue chip US equities.

Dow Jones Industrial Average

'The Dow' is the oldest stock market index in the US, measuring the performance of a representative selection of 30 blue-chip companies. The 30 companies are selected by Dow Jones & Co and the Wall Street Journal.



ECB - European Central Bank

which manages the euro currency and European interest rates/monetary policy.


Exchange delivery settlement price. This is the average traded price over a set period that determines the futures settlement contract price.


From 1/1/02 European Union countries which participate in the union used a common currency (euro) that replaced the domestic currencies.


An alternative name for stocks and shares.

European Monetary System

The exchange rate regulation system used between European Community member countries, begun in 1978.

Exchange Rate

The rate at which one currency is traded against another.

Exchange Rate Mechanism

The system by which European Community countries give a central exchange rate against which their currencies fluctuations are regulated.

Exchange Rate Risk

The potential loss that could be incurred from a movement in exchange rates.

Execution Only Stockbrokers

Those stockbrokers who offer clients, usually, an inexpensive trading facility with no advice, research or recommendations as to investment style or policy.

Expiry Date

Date at which a contract can no longer be traded.

Fair Value

The theoretical price at which a futures contract should trade.

Federal Reserve (Fed)

The Federal Reserve System is comprised of 12 district banks throughout the US, the Federal Reserve Board (FRB) and the Federal Open Market Committee (FOMC). The FOMC, typically headed by the chairman of the FRB, meets eight times each year to set US monetary policy, including key interest rates.

Fibonacci Lines

Fibonacci lines are based on ratios that exist naturally. The ratios are based on the "Fibonacci numbers," in which each successive number is the sum of the two previous numbers. e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. A number of relationships exist between these numbers, such as the fact that any given number (after 3) is roughly 1.618 times the previous number. Changes in trends tend to take place near the lines created by Fibonacci studies such as arcs, fans, retracements, and time zones.


Execution of a stop loss or limit order.

Financing Costs

CFD Share positions carried overnight will incur financing costs for the full consideration of the position. If a client opens a position with a 5% margin, finance overnight will be on the 100% balance. Clients who are long a CFD will pay interest to the spread betting company, clients who are short may receive interest from the spread betting company.

Fixed Exchange Rate

Official rate set by monetary authorities for one or more currencies. In practice, even fixed exchange rates are allowed to fluctuate between definite upper and lower bands, leading to intervention.

Floating Exchange Rate

A scheme whereby a country’s currency exchange rate against others is determined by market forces with no intervention from government.


When a company's shares are offered to investors and quoted on a market exchange for the first time.


An abbreviation of foreign exchange.

Forward Exchange Contract

An agreement to buy an amount of a currency at an agreed exchange rate on a fixed date.

Forward Points

The interest rate differential between two currencies expressed in exchange rate points. The forward points are added to or subtracted from the spot rate to give the forward or outright rate.


Took over from the SFA on 29th of April 2000. The Financial Services Authority enforces strict rules in regards to all aspects of Spread Betting.

FSA - The Financial Services Authority

The regulatory authority responsible for the conduct of brokers and dealers in securities, options share CFDs and futures.


Financial Times Stock Exchange.

FTSE 100

Index that highlights the performance of the UK's top 100 companies.

FTSE 350

The index of the top 350 companies by market capitalisation. It is a combination of the FTSE 100 and FTSE 250 stocks.

FTSE Index

Three indices comprise the FTSE All Share index - FTSE100, FTSE Mid 250 & FTSE Small Cap.

FTSE Mid 250

The index of the 250 companies below the top 100 as measured by their market capitalisation

FTSEAll Share

Covers about 800 stocks and shares which represent 98% of market value and has indices for sectors as well.

Fundamental Analysis

The economic/financial and political analysis of a country that does not involve interpreting charting patterns or price movements.


A standardized, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date. Unlike options, futures convey an obligation to buy.

Futures trading

Buying/selling of a product at a fixed price for a date in the future.

FX Forward Rate

The rate at which a foreign exchange contract is struck today for settlement at a specified future date.

FX Swap

A transaction which involves the actual exchange of two currencies (principal amount only) on a specific date, at a rate agreed at the time of the conclusion of the contract (short leg), at a date further in the future at a rate agreed at the time of the contract (the long leg).

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