Make a Market
A brokerage firms that buys and sells a particular security as a dealer.
Management/Closely Held Shares
The percentage of shares held by persons closely related to a company, as defined by the Securities and Exchange Commission.
The group responsible for managing a mutual fund's portfolio.
The percentage of a fund's net assets paid to the fund's advisor.
- The purchase of securities with money borrowed from a bank or brokerage. 2) The amount of equity required to purchase and hold marginable securities in a margin account.
A leveraged account where the brokerage firm lends the account owner money to purchase certain securities. The loan in the margin account is collateralized by purchased security, and if the value of the security declines, the owner will be asked to either put in more cash or sell a portion of the holdings.
A demand from the brokerage instructing the client to deposit money or securities with the broker when the value of securities purchased on margin falls.
The amount of cash and equity that clients must deposit in the brokerage account to be able to purchase using borrowed capital or sell short.
Margin Requirement (Options)
The amount of cash the writer of an uncovered option is required to maintain in his account to cover daily position valuation and possible intraday price changes.
Tracking the price of a security, portfolio, or account daily, to calculate gains and losses or confirm that margin requirements are being met.
Also known as market cap, it is the total dollar value of all outstanding shares, calculated as shares outstanding multiplied by current market price per share. Generally speaking, small cap stocks have market values below $1 billion, while large-caps have values in excess of $5 billion.
The period between the two most recent highs or lows of the S&P 500. A market cycle is complete when the S&P is 15% below the highest point or 15% above the lowest point (ending a down market).
Market Data System
An electronic process where the details of a filled order are transmitted to all interested parties. The information includes the name of the stock, number of shares traded, and the price.
Also known as dealer or specialist, a market maker is a brokerage or bank that maintains a firm bid and ask price in a security by being ready to buy or sell at publicly quoted prices, maintaining liquidity for that security.
Market Not Held Order
A market order that gives the floor trader discretion to execute the order when he/she feels it is ideal.
An order to be executed immediately upon being entered at the best price possible.
Risk experienced from daily fluctuations in the price of a security.
See Market Capitalization.
An index calculated using the price of each stock multiplied by the number of shares held. Corporations with the most shares make the largest impact. Some examples include the S&P 500 Index and the NASDAQ composite.
A security that may be resold in the secondary market.
Marry a Put
Hedging risk by buying the stock and buying a put on the same day.
The date on which a bond or other debt instrument becomes due and payable.
A partnership or corporation whose partners or officers are members of a security exchange, clearing firm, or self-regulatory organization.
The combining of two or more companies into one, either through the purchase of one by the other, or a pooling of interests. The resulting synergies are expected to increase the company's efficiency.
Stocks of medium-sized companies. They offer more growth potential than large caps but are less volatile than small cap companies.
The minimum balance (expressed as a percentage) of equity and cash in a margin account that meet the margin requirements established by the brokerage firm and NASD.
Auctions of Treasury securities occurring in March, June, September, and December.
Ownership of less than 50% of a corporation's voting stock, or insufficient ownership to control a company's operations.
An execution price below the previous transaction.
Market for short-term debt securities maturing within one year, including banker's acceptances, commercial paper, repos, negotiable certificates of deposit, and Treasury Bills. Money market instruments are extremely liquid, therefore they are safe but do not offer high yields.
Money Market Fund
A type of mutual fund that focuses on money market securities.
Money Market Instruments
Short-term debt instruments such as U.S. Treasury bills, commercial paper, and banker's acceptances.
A collection of mortgages pooled into a security that can be retailed and traded by private or institutional investors.
A debt instrument issued by a corporation and secured by the real estate owned by the corporation.
A technical analysis term measuring the average of data for a certain number of time periods. It is calculated using data from a fixed number of time periods, when a new value is added, the last trailing value is removed, hence the name "moving" average.
See Municipal Securities Rule-Making Board.
See Municipal Bond.
A long-term debt instrument issued by a state or municipal government.
Municipal Bond Funds
Funds that invest in bonds issued by state and local governments.
A short-term debt instrument of a state or local government.
Municipal Securities Rule-Making Board (MSRB)
Establishes rules and regulations to be followed in trading, dealings and client relationships concerned in municipal securities.
An investment company that actively manages a portfolio and continuously offers new shares to investors. Mutual funds have various different objectives, some aim for growth and others aim for stability; the portfolio is managed to meet these criteria.