Abbreviation used in newspaper listings of bonds to indicate a matured bond.
See: Bond; Maturity Date
Basic money supply figure that includes currency in circulation, demand deposits (checking accounts), credit union share drafts, and non-bank travelers' checks. NOW accounts and Super-NOW accounts are included in demand deposits.
See: Demand Deposit; Money Supply
A wider definition of money supply than M1, it includes M1 plus savings accounts, time deposits under $100,000, money market mutual funds shares, overnight repurchase agreements and overnight Eurodollars.
See: Eurodollar; M1; Money Market Fund; Money Supply; Mutual Fund; Time Deposit
Analysis of the overall economy using information such as unemployment, inflation, production and price levels.
See: Inflation; Microeconomics
A call for more money or securities to be deposited into brokerage client's margin account. A call will be made when the account's margin equity falls below exchange requirements or the brokerage firm's house requirements. Currently, NYSE maintenance requirements are 25% in a long account (client has long positions) and 30% in a short account (client has short positions generated from selling short). The brokerage firm's house requirements are usually more stringent than the exchanges. If the account is not brought up to maintenance levels, some of the client's securities may be sold to eliminate the deficiency.
See: House Call; House Maintenance Requirement; Margin; Margin Account; Margin Call; Margin Requirement; Margin Security; Minimum Maintenance Requirement; Sell Out Procedures; Selling Short
Yearly charge to maintain certain types of brokerage or bank accounts such as an IRA or an asset management account.
See: Asset Management Account; IRA
A shareholder who controls more than half of the outstanding shares of a corporation--commonly considered 51% of the outstanding shares. However, if ownership is widely distributed such that there are no majority shareholders, control may be gained with far less than 51% of the outstanding shares.
See: Minority Interest; Outstanding Stock; Working Control
Make A Market
The process of maintaining firm bid and asked prices in a given security by standing ready to buy or sell round lots at publicly quoted prices. In the over-the-counter market, the dealer is called a "market maker", and on the exchanges, a "specialist".
See: Asked Price; Market Maker; Over The Counter; Round Lot; Specialist
Maloney Act Of 1938
An amendment to the Securities Exchange Act of 1934 that allows self-regulation by securities firms dealing in the over-the-counter market. As a result, the Financial Industry Regulatory Authority was created.
See: FINRA; Over The Counter; Securities Exchange Act Of 1934
An expense paid by an investment company to the investment advisor for managing a portfolio. As disclosed in the prospectus, this fee is past onto the investor and is a fixed percentage of the fund's asset value.
See: Asset; Investment Company; Mutual Fund; Portfolio
In the securities industry, it usually refers to the illegal process of buying or selling a security to create a false or misleading appearance of active trading for the purpose of raising or depressing the price to induce purchase or sale by others.
"On Margin"--a process whereby a brokerage client uses credit to finance securities transactions.
See: Buying On Margin; Buying Power; Credit Balance; Customer's Net Debit Balance; House Rules; Maintenance Call; Margin Account; Margin Agreement; Margin Call; Margin Department; Margin Requirement; Margin Secu
rity; Special Miscellaneous Account
An account with a brokerage firm that allows its clients to buy securities with money borrowed from the broker. Depending on the security, an investor can sometimes borrow up to 50% or more of the market value. Margin accounts are governed by Regulation T of the Federal Reserve Board, by the NYSE, and by the brokerage firm's house rules. Margin requirements can be met with cash, eligible securities, or any combination thereof.
See: Margin; Margin Agreement; Regulation T
Document that must be signed by a brokerage client who wished to trade on margin--also called a "hypothecation agreement". The document details the rules governing a margin account, including the hypothecation of securities, how much equity the customer must keep in the account, and the interest rate on margin loans.
See: Hypothecation; Initial Margin Requirement; Interest; Margin; Margin Account
A demand for a client to deposit money or eligible securities with the broker to bring a margin account up to the initial margin or minimum maintenance requirements. A Regulation T margin call is sent when a purchase is made and a maintenance margin call is sent when the margin account's equity falls below specific levels. If the client does not respond to the call, securities in the account may be liquidated.
See: DeMinimus Exception; House Call; Initial Margin Requirement; Liquidation; Maintenance Call; Margin; Regulation T; Sell Out Procedures
Department within a brokerage firm that monitors:
* Customer compliance with margin regulations;
* Purchases of stock on margin;
* Short sales;
* Extensions of credit by the broker.
See: Margin; Margin Call; Mark To Market; Selling Short
According to Regulation T of the Federal Reserve Board, it is the minimum of $2,000 or 50% of the purchase price of eligible securities bought on margin or 50% of the proceeds of short sales. This amount must be deposited in the client's margin account in the form of cash or eligible securities.
See: House Maintenance Requirement; Initial Margin Requirement; Margin; Margin Account; Margin Security; Minimum Maintenance Requirement; Regulation T; Selling Short
A security that may be bought or sold in a margin account. Regulation T of the Federal Reserve Board determines which securities are eligible.
See: Federal Reserve Board; Margin; OTC Margin Stock; Regulation T
1: The overall security markets, also called "marketplace", or the New York Stock Exchange in particular.
See: New York Stock Exchange; Street
2: Short for "market value"--the value of an asset based on the price it would command on the open market. It is usually set by the market price at which comparable assets have recently been bought or sold.
See: Asset; Market Price
Securities that can be easily sold--that is, any asset that can be readily converted into cash, for example--government securities and commercial paper.
See: Asset; Cash Equivalent; Commercial Paper; Government Securities; Liquidity
Research used to assist in predicting the direction of the markets based on technical data relating to price movements of the market, or on fundamental data such as corporate earnings.
See: Fundamental Analysis; Technical Analysis
The scope of change in stock prices as measured by analyzing the number of stocks that advanced or declined during the period or by the number of stocks hitting new highs or new lows.
See: Technical Analysis
Securities dealer in a specific over-the-counter stock who makes a market--that is, one who maintains firm bid and asked prices in a given security by standing ready to buy or sell round lots.
See: Asked Price; Make A Market; Over The Counter; Round Lot
An order to buy or sell a specific number of shares at the best available price once the order is received in the marketplace. Normally, a market order is executed at the quoted price given before the order was entered, or at a price quite close to the quote. However, if the security is volatile, the execution price could be better or worse than anticipated.
See: Day Order; Execution; Market Price; Orders
The last reported price at which a security was sold or the current quote.
See: Last Sale
The chance that a security's value will decline. With fixed income securities, market risk is closely tied to interest rate risk--as interest rates rise, prices decline and vice versa.
See: Risk; Systematic Risk
Determination of when to buy or sell securities through use of fundamental or technical indicators. Mutual funds investors can accomplish market timing decisions by switching from different types of funds within a family as the market outlook changes. For example, the investor can switch from a stock fund to a money market fund and back again.
See: Fundamental Analysis; Indicator; Market Analysis; Technical Analysis
Mark To Market
The comparison and adjustment of a position to reflect current market values. Mark to market is conducted on stocks that were sold short, uncovered calls and puts and when-issued securities. The adjustment may cause a margin call to be issued.
See: Margin; Margin Call; Market Price; Selling Short; Uncovered Call Option; Uncovered Put Option
The date on which the principal amount of a loan, bond, or any other debt instrument becomes due and is to be paid in full.
See: Debt Instrument; Loan; Principal