It stands for floating rate tranche; a CMO tranche (or a tranche in a similar structure) in which the monthly coupon rate is typically set equal to a reference rate such as LIBOR. A floating-rate tranche is mainly designed to attract investors who prefer to buy variable rate securities.

For example, the rate on a floating-rate tranche (FL or FL tranche) may be set to LIBOR plus 40 basis points, with a maximum rate of 9%. A floating-rate tranche earns interest that is linked to an interest rate index which could be a collateral pool of floating-rate mortgages (which produces a series of variable rate payments that can be passed on to floating rate tranches).

FL may also stand for financial leverage, finance lease, or financial loss.