Floor

From Reuters Financial Glossary

The trading floor of an exchange where dealers meet face to face to quote prices and deal. Alternatives to the trading floor are screen-based trading systems, or an over-the-counter system. Also, a type of derivative that protects the holder from a fall in interest rates. The holder, by exercising, receives a cash settlement representing the difference between the strike level and the underlying interest rate, should the latter be lower. Floors normally have a life of between two-five years. The option can be exercised at regular intervals (every six months, for example) during the life of the floor.

See also: OTC, Screen Trading, Cap