Business / Finance Glossary

Free Delivery: Cash not required for operations or for reinvestment. Often defined as earnings before interest (often obtained from the operating income line on the income statement) less capital expenditu . . . View Full Definition

Free Float: Securities industry procedure whereby delivery of securities sold is made to the buying customer's bank without requiring immediate payment; thus a credit agreement of sorts. Antithesis of d . . . View Full Definition

Free On Board (FOB): An exchange rate system characterized by the absence of government intervention. Also known as clean float.

Free Reserves: Implies that distribution services like transport and handling performed on goods up to the customs frontier (of the economy from which the goods are classed as merchandise.) are included in . . . View Full Definition

Free Rider: Excess reserves minus member bank borrowings at the Fed.

Free Right Of Exchange: A follower who avoids the cost and expense of finding the best course of action simply by mimicking the behavior of a leader who made these investments.

Free Stock: An investor's right to transfer securities from one name to another name without paying charges that accompany a sales transaction.

Free To Trade: A stock that is paid for in full and is not pledged in any way as collateral.

Free-Riding: A term used to indicate that an underwriting syndicate's members are no longer restricted to the fixed price agreed upon in the agreement among underwriters and are permitted to trade the se . . . View Full Definition

Freed Up: Used in the context of general equities. Not subject to any internal (restricted list) or external restrictions on trading; hence, the trader is free to solicit interest.

Freeze Out: A forbidden practice in which the member of an underwriting syndicate retains a portion of an initial public offering (IPO) and resells the securities at a higher price determined by the mar . . . View Full Definition

Frequency Distribution: The action of pressurizing shareholders with relatively minor amounts of stock to sell their shares after a takeover.

Fresh Picture: The organization of data to show how often certain values or ranges of values occur.

Fresh Signal: Updated estimation of a stock or market, usually following recent trading activity or news that has changed the previous look.

Friction Costs: Piece of information (fundamental or technical) leading one to believe a stock will move in a certain manner.

Frictional Cost: Costs, both implied and direct, associated with a transaction. Such costs include time, effort, money, and associated tax effects of gathering information and making a transaction.

Frictions: The difference between an index fund return and the index it represents. The typically lower rate of return from the fund results from transactions costs.

Friendly Takeover: The 'stickiness' involved in making transactions; the total process including time, effort, money, and tax effects of gathering information and making a transaction such as buying a stock or . . . View Full Definition

Front Fee: Merger when the target firm's management and board of directors is in favor of the takeover. Antithesis of hostile takeover.

Front Office: The fee initially paid by the buyer upon entering a split-fee option contract.

Front Running: Refers to revenue generating sales personnel in a brokerage, insurance, or other financial services operation.

Front-End Load: Entering into options or futures contracts with advance knowledge of a block transaction that will influence the price of the underlying security to capitalize on the trade. This practice is . . . View Full Definition

Frozen Account: The fee applied to an investment at the time of initial purchase, e.g., on a mutual fund purchased from a broker or mutual fund company.

Fry A Bigger Fish: A disciplinary action taken by the Federal Reserve Board for some violation of Regulation T, an individual investor cannot sell securities until they are paid for in full and certificates delivered.

Full: Used in the context of general equities. Work on a trade of larger size than a trade just disclosed.

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