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Free reserves
Excess reserves minus member bank borrowings at the Fed.
Free rider
A follower who avoids the cost and expense of finding the best course of action and by simply mimicking the
behavior of a leader who made these investments.
Free to trade
Used in the context of general equities. Removed from any internal (restricted list) or external restrictions on
trading, and hence the trader is free to solicit interest as well.
Frequency distribution
The organization of data to show how often certain values or ranges of values occur.
Fresh picture
Used for listed equity securities. Updated picture of a stock or market, usually following recent trading
activity or news which has changed the previous look.
Fresh signal
Used in the context of general equities. Piece of information (fundamental or technical) leading one to
believe a stock will move in a certain manner.
Friction costs
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 stickiness in making transactions; the total hassle including time, effort, money, and tax effects of
gathering information and making a transaction such as buying a stock or borrowing money.
FRN
See: Floating Rate Note
Front ending
Used in the context of general equities. Trading a partial of relatively small size in comparison to the
remainder of the total order, at times without giving the opposite side (the buyer/seller of this small partial)
adequate disclosure of the extent of the latter end of the total order, and thus disadvantaging this party when
this sizable latter end moves the stocks price against his initial buy or sell price of the smaller, front end.
Front fee
The fee initially paid by the buyer upon entering a split-fee option contract.
Front running
Used in the context of general equities. Entering into option 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 forbidden by the S.E.C. and should never be followed within any brokerage firm.
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