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M

Investment and Trading Glossary

A B C D E F G H I J K L M N O P  Q  R S T U V W X Y Z

 

M

M1

A category of the money supply that includes all coins, currency and demand deposits (that is, checking accounts and NOW accounts).

M2

A category of the money supply that includes M1 in addition to all time deposits, savings deposits and noninstitutional money-market funds.

M3

A category of the money supply that includes M2 in addition to all large time deposits, institutional money-market funds, short-term repurchase agreements and certain other large liquid assets.
MAINTENANCE CALL See margin maintenance call.
MAINTENANCE REQUIREMENT

See margin maintenance requirement.

MAKE A MARKET

To stand ready to buy or sell a particular security as dealer for its own account. A market maker accepts the risk of holding the position in the security.
MANAGED UNDERWRITING An arrangement between the issuer of a security and an investment banker in which the banker agrees to form an underwriting syndicate to bring the security to the public. The syndicate manager then directs the entire underwriting process.

MANAGEMENT COMPANY

An investment company that trades various types of securities in a portfolio, in accordance with specific objectives stated in the prospectus.

MARGIN

The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.
MARGIN ACCOUNT

A customer account in which a brokerage firm lends the customer part of the purchase price of securities.

See also cash account; Regulation T; special arbitrage account.

MARGIN CALL

The Federal Reserve Board´s demand that a customer deposit a specified amount of money or securities when a purchase is made in a margin account; the amount is expressed as a percentage of the market value of the securities at the time of purchase.

MARGIN SECURITY

A security that is eligible for purchase on margin, including any registered security, OTC margin stock or bond or Nasdaq National Market security. A firm is permitted to lend money to help customers purchase these securities, and may accept these securities as collateral for margin purchases

Syn eligible security.

MARKETABILITY

The ease with which a security can be bought or sold; having a readily available market for trading.
MARKET-IF-TOUCHED ORDER (MIT)

An order that becomes a market order only if the market touches or breaks through the order price. Board orders to buy are placed below the concurred market. Board orders to sell are placed above the concurred market.

See board order.

MARKET MAKER

A dealer willing to accept the risk of holding a particular security in its own account to facilitate trading in that security .
MARKET-ON-CLOSE ORDER (MOC)

An order that specifies it is to be executed at, or as near as possible to, the close of the market or of trading in that security, or else it is canceled. The order does not have to be executed at the closing price.

Syn. at-the-close order.

See also at-the-opening order.

MARKET ORDER

A order that has to be executed immediately at the best available price. A market order is the only order that guarantees execution

Syn. unrestricted order

MARKET RISK

The potential for an investor to experience losses owing to day-to-day fluctuations in the prices at which securities can be bought or sold.

MARKET VALUE

The price at which investors buy or sell a share of common stock or a bond at a given time. Market value is determined by the interaction between buyers and sellers.
MARKUP The difference between the lowest current offering price among dealers and higher price a dealer charges a customer.

MERGER

Combining two or more companies by offering the stockholders of one company securities in another company in exchange for the surrender of their stock.

MINUS TICK

A security transaction´s execution price that is below the previous execution price, by a minimum amount. A short sale may not be executed on a minus tick.

MONETARY POLICY

The actions of the Federal Reserve Board that determine the size and rate of growth of the money supply, which in turn affect interest rates.

MONEY MARKET

The securities market that deals in short-term debt. Money-market instruments are forms of debt that mature in less than one year and are very liquid. Treasury bills make up the bulk of the money-market instruments.

MONEY-MARKET FUND

 

A mutual fund in short term debt instruments. The fund’s objective earn interest while maintaining a stable net asset value of $1.00 per share. Generally sold with no load, the fund may also offer draft-writing privileges and low opening investments.

MONEY SUPPLY

The total stock of bills, coins, loans, credit and other liquid instruments in the economy. It is divided into four categories – L,M1,M2 and M3—according to the types of account in which the instrument is kept.

MOODY´S INVESTORS SERVICE

One of the best known investment rating agencies in the United States. A subsidiary of Dun & Bradstreet, Moody´s rates bonds, commercial paper, preferred and common stock, and municipal short-term issues.

MUTUAL FUND

An investment company that continuously offers new equity shares in an actively managed portfolio of securities. All shareholders participle in the gains or losses of the fund. The shares are redeemable on any business day at the net asset. Each mutual fund´s portfolio is invested to match the objective stated in the prospectus.

Syn. open-end investment company; open-end management company.