- floor
- A lower limit for a variable, such as the lower limit on an interest rate paid or received in a transaction. For example, an adjustable-rate loan may have a floor of 5 percent. In that example, the rate can adjust however loan terms provide, but it can never fall below 5 percent. The term "floor" is often used with its converse, a cap. A floor may be an embedded option, such as the floor on the rate for a floating-rate loan, or a stand-alone option contract. American Banker Glossary————The area of a stock exchange where active trading occurs. Also the price at which a stop order is activated (when the price drops low enough to activate such an order). In context of interest rates, a level which an interest rate or currency is structured not to go below. Bloomberg Financial Dictionary————An agreement with a counterparty that sets a lower limit to interest rates for the floor buyer for a stated time period. Exchange Handbook Glossary————Level of partial capital protection below which the net asset value of a SGAM leveraged ETF may not fall during a rolling one-month period. NYSE Euronext Glossary
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US /flɔːr/ noun► ECONOMICS the lowest level, number, or amount something is allowed to reach: provide/keep/put a floor under sth »Theoretically, buybacks put a floor under stock prices and raise earnings per share.
find/reach a floor »Analysts believe the market has found a floor at about 2,560 points.
raise the floor on sth »Another rule would raise the floor on the amount of assets a company must have to register with the SEC.
»Many of these fixed-price contracts were signed when the price of coal was on the floor.
► FINANCE, MONEY the lowest rate a country's government will allow its currency to reach in relation to other currencies: »The euro finally seems to have hit the floor against the dollar.
Financial and business terms. 2012.
