Factory New, shortened to FN, is the top of the five CS2 wear tiers. A skin is Factory New when its float value falls between 0.00 and 0.07, the top tier in Valve's Weapon Finishes guide. Below it come Minimal Wear, Field-Tested, Well-Worn and Battle-Scarred. The wear tier is fixed when the item is created and never changes, no matter how much you use the weapon in matches, as the Counter-Strike wiki notes.
Because the range is narrow, Factory New copies are usually the scarcest and most expensive wear of a skin. Some finishes have a float cap that starts above 0.07, so those skins can never be Factory New at all.
Why do two Factory New skins have different prices?
The float within the tier still matters. A skin at 0.001 is cleaner and rarer than a skin at 0.069, even though both say Factory New. Collectors pay extra for very low floats, and the lowest known float of a popular skin can be worth many times a normal Factory New copy. Pattern, StatTrak and stickers add to the gap.
The visual difference across the Factory New range is small on most finishes, so for a skin you plan to use rather than sell, a high-float Factory New often looks the same as a low one at a fraction of the price.
How do you get a Factory New skin from a trade-up?
Valve has not published the output float formula. Community testing shows the result's float comes from the average position of the input floats inside their own ranges, mapped onto the output skin's range. To land a Factory New output you need input floats low enough that the average falls under 0.07 after the mapping, which is why traders pay attention to every input's float and use a float cap calculator before running the contract.