FED see “Federal Reserve System”

Federal Funds Rate rate at which banks lend money to one another, often watched by Wall Street in an effort to predict the direction of interest rates

Federal Reserve System the central bank of the US, responsible for regulating both the banking industry and the amounts of money and credit available in the overall economy

Float the quantity of a company’s shares held by the general public (total shares in circulation), as opposed to the total shares outstanding (e.g., when a company offers 3 million shares in an IPO but has 20 million shares outstanding, its float is the 3 million shares offered)

Free Riding a practice prohibited by the Securities Exchange Commission and the FINRA, in which an underwriter holds back a quantity of IPO shares in order to subsequently sell them at a higher price

Fully Diluted fully diluted earnings per share is a calculation of what the earnings per share would be if all warrants and options were exercised

Fundamental Analysis one method of valuing stocks, fundamental analysis looks at a company’s financial data (balance sheet, cash flow, sales, earnings, etc.)—contrast with “Technical Analysis”

Good Will a term for a company’s intangible assets (brand names, reputation, etc.)

Hedge to hedge is to use strategies for protecting a client’s investments from a falling market

High Flier a stock that increases rapidly in value over a short period of time

High-Yield Bond see “Junk Bonds”

Holding Company a company with controlling ownership in one or more subsidiaries

Hot Issue describes an IPO for which there is substantially more demand than supply; under federal law, a hot issue cannot be sold to owners or employees of brokerage firms or to industry insiders

Illiquid describes investments, such as real estate, which cannot be easily converted into cash

Index a statistical method for measuring the performance, over time, of a group of stocks or bonds

Index Mutual Fund a type of mutual fund that tries to mirror the performance of the general stock or bond market by investing in the securities of a market index (e.g., the Standard & Poors 500)

Indication of Interest an order placed with the lead manager by an investor for a specific amount of stock in an IPO, often more than the investor wants, since IPOs tend to be oversubscribed; the investor may give a limit order, indicating the maximum price per share at which he or she will buy

Individual Retirement Account (IRA) tax-advantage investments to which the government allows each individual to contribute $2,000 of earned income each year that may be deducted from current gross earnings

Inflation an increase in prices throughout the economy

Initial Public Offering (IPO) when a company first sells its shares to the public

Insiders those who, because of their positions, have information about a company’s operations that is not known to the public, and who are therefore restricted in the ways in which they can sell shares in the company; insiders include management, members of the board of directors, and significant stockholders

IRA see "Individual Retirement Account”

Irrevocable Trust a trust agreement that is not subject to change or cancellation

Issue can refer both (1) to the stocks or bonds sold by a corporation and (2) to the act of selling the stocks or bonds

Issuer refers to the company that issues a new stock that has been registered with the SEC to the public

Joint Account a type of brokerage or mutual fund account in which the stocks, bonds, or mutual funds are owned jointly by the client and one or more other individuals, all of whom must sign the account

Junk Bonds bonds offering a high yield, but backed by companies that frequently have a higher than usual probability of default