M
Maintenance Requirement
The level of equity that must be maintained in a client's margin account. When the market value of a margined security is less than maintenance levels, a margin call is issued for the investor to increase equity.

Margin Account
An investment account which allows you to purchase securities with funds borrowed from the broker at a specified interest rate.

Margin Balance
A debit in your account secured with stocks and/or bonds which regulators have authorized for use as collateral.

Margin Call
A firm's demand of a client for additional equity in order to meet maintenance requirements. If a client fails to deliver more equity in the account, positions in the account may be liquidated. There are three types of margin calls: House, Exchange, and Federal. See House Call, Exchange Call, Federal Call.

Margin Debt
A debit in your account that is owed to the broker. The debit is secured with stocks and bonds which regulators have authorized for use as collateral. It excludes funds due which are debits resulting from purchases in a cash account.

Margin Loan Availability
The amount of money you may withdraw from your account using margin eligible securities in your margin account as collateral.

Marginal Tax Rate
The combined federal, state, and local tax rate applied to the next additional dollar of income. For example, if your federal tax bracket is 28%, and your state tax rate is 5%, when you earn another dollar of income, it would be taxed at a 33% tax rate.

Mark to Market
Determination of securities' value within a margin account to ensure that the account is in compliance with maintenance requirements.

Market Order
An order to buy or sell a security at the next available price.

Market Timing
Attempting to buy and sell securities to ride up trends and avoid down trends in the stock, bond, currency, or commodity markets. In theory, this can dramatically increase your rate of return, but practically, it is extremely difficult or impossible to consistently make the right decisions at the right time over the long term.

Market Value
The number of outstanding common shares of a given corporation times latest price per share. It is also referred to as market capitalization.
Note: ADRs and ADSs do not display Market Value.

Maturity
The date a given bond will mature and pay off its principal in full. A bond issued for $1,000 will pay off the $1,000 at maturity. A single company can issue more than one series of bonds. These bond series can be differentiated by their maturities.

Maximum Capital Gains
The attempt to maximize the positive difference between the buying and selling price of a security. Maximum capital gains securities are typically more risky, or volatile, than the average (S&P 500) security. They rise more during bull markets but also fall more during bear markets and are typically stocks of fast-growing small companies.

Mean Estimate
The average of analysts' earnings per share estimates for the current fiscal year for a given corporation.

Minimum Deposit
The minimum deposit accepted by the Institution for the particular CD. Jumbo and MiniJumbo CDs indicate minimum deposits of $100,000 for Jumbos and $25,000 and $50,000 for MiniJumbos.

Minimum Investment
Minimum Initial indicates the minimum deposit required to open a regular or IRA/SEP/Keogh tax-deferred account with the mutual fund. Minimum subsequent indicates the minimum required to make deposits in an already opened regular or tax-deferred account with the mutual fund.

Mixed Lot
The combination of round lot (100 shares) or multiple round lots and an odd lot (99 shares or less), e.g. 163 shares.

Money Market Fund
A mutual fund that invests in cash and equivalents. Generally, has a stable $1 per share net asset value (NAV) and a variable rate of return. Not federally insured but short term nature of investments plus private insurance make them quite safe. Dividends are paid periodically and are automatically reinvested in more shares. Available from banks, mutual fund companies, and brokerage firms, these funds are used as a convenient place to park cash and earn "interest" (really dividends, as mentioned above). Most brokerage and mutual accounts have an associated money market fund account. Money market funds can be taxable or tax-exempt. Each day, the balance in the cash / margin account, which comes from the proceeds of trades and distributions, is swept into the money market fund. See Account.

Municipal Bond
A bond issued by state or local government. Interest from these bonds is generally tax-free to residents but in some cases, interest is federally taxable if subject to Alternative Minimum Tax. Note that any capital gain realized by trading a municipal bond is subject to capital gains tax. Because of this hybrid tax situation, municipal bonds are normally put in taxable brokerage accounts since there is no special account for them. See Bonds.

Mutual Fund
A company that pools money of individual investors and purchases securities which become jointly owned by its shareholders. The shareholders receive interest, dividends, and capital gains (but not losses) from the ownership and sale of the fund's securities. The fund's portfolio is managed by a professional money manager. Open-end funds offer shares to the public continuously (except when temporarily closed) while closed-end funds offer a limited number of shares which then trade on an organized exchange. A no-load fund charges no up front or back end sales fee while a load fund may charge one or both. Virtually all mutual funds charge annual expense fees that reduce the investment return. Mutual funds can invest in equity, debt, cash, real estate, options, and futures. There are over 4,000 mutual funds. Closed end funds are purchased just like stocks. Full service brokers usually sell their own funds while discount brokers sell mostly funds of other companies.

Mutual Fund Cash Level
Measures the average percentage of cash held by managers of mutual funds in their funds. When levels are over 11%, managers are holding onto a lot of cash because they are bearish on the market. Levels below 6% means they are bullish as they have spent all their cash; fund managers usually need to keep about 5% cash just to meet daily redemption requirements. This indicator is usually considered a contrary indicator, as fund managers tend to be wrong at market extremes.

N
NASDAQ Composite Index
A market value weighted index comprised of about 3,500 stocks traded on the NASDAQ exchange. Large technology stocks have a major effect on this index value. NASDAQ represents the top tier of the over-the-counter (OTC) market.

Net Amount
Quantity times price, plus or minus commission.

Net Asset Value (NAV)
The per share price of a mutual fund. For a no-load fund, NAV is the price received by both buyers and sellers. For front loaded mutual funds, NAV is equivalent of the bid price (what shareholders can get for selling a share), while the offering price is the price buyers must pay per share (and includes front load). The NAV is usually calculated at the end of each trading day by taking the closing prices of all securities owned plus cash and equivalents and subtracting all liabilities then dividing by the number of shares outstanding, which for open-end funds, fluctuates depending on daily number of redemptions and purchases. Many new funds are issued at a NAV of $10. After a distribution, the NAV falls by the amount equal to the distribution.

Net Income
The net income after taxes but before payout of common and preferred dividends for the indicated fiscal year for a given corporation.

Net Income 3-Yr Growth Rate
The unweighted average of the growth rate for net income over the last three fiscal years for a given corporation.

No-load funds
Mutual funds that have no initial sales charge. Beware that some no-loads have other charges and expenses. The best measure of all fees and charges is the five year fee. See Mutual Fund.

Non-callable Bonds
Bonds which cannot be taken back by the issuer before maturity. Most U.S. Treasury issues are non-callable. This is an advantage to the lender since there is no interest rate risk. With callable bonds, there is the risk of having to reinvest before maturity at a potentially lower interest rate.

Non-marginable Securities
Securities that may not be purchased or sold in a margin account. All transactions involving them must be done on a full cash basis.

O
Odd Lot
Purchase or sale of less than the round lot unit of 100 shares.

Offering Price
The net asset value plus the sales charge. Offering price is what a buyer (you) would have to pay to buy one share of a given mutual fund. See Mutual Fund.

Out-of-State Deposit
Indicates whether an institution will accept out of state deposits from customers.

Open Lot
Open lots are the components that make up open investments and can be long (buy) or short (short sell). A lot in general is a group of identical units (for securities) or nearly identical units (for collectibles) of an investment that are traded at the same time and price. See lot.

Open Order
Orders that have been placed with the broker but have yet been executed or canceled.

Open Price
The price at which a given stock opened for the current trading day. For weekend days or holidays, this would be the opening price for the previous trading day.

Opening Commission
The commission added to the proceeds before calculating realized gain or loss. It is the fee charged by broker to execute your trade. May be a composite of several fees & charges.

Opportunity Cost
The rate of return you likely would have achieved for capital in an alternative investment from the one you chose. If the current investment under performs the foregone investment, then you have paid an opportunity cost greater than the current rate of return and you made a bad choice.

Option
A contract that gives the owner the right, if exercised, to buy or sell a security or basket of securities (index) at a specific price within a specific time limit. Usually, they are traded as securities themselves, with buyers and sellers trying to profit from price changes. They are generally available for 1 to 9 months, with some longer term options (called LEAPS) also available for selected securities. Stock option contracts are generally for the right to buy or sell 100 shares of the underlying stock (100 is the multiplier). Trading in options should only be undertaken by sophisticated investors.

Options
An item in the stock database that indicates whether a given stock also has options that can be traded. See Option.

Option Premium
The premium is the price at which the contract trades. The premium is the price of the option and is paid by the buyer to the writer, or seller, of the option. In return, the writer of the call option is obligated to deliver the underlying security to an option buyer if the call is exercised or buy the underlying security if the put is exercised. The writer keeps the premium whether or not the option is exercised.

Option Schedule
In brokerage, a list of the options available for the underlying stock symbol you enter.

OTC Stock
A security not listed on a major exchange.

Out-of-the Money Option
A call option is out-of- the-money if the strike price is greater than the market price of the underlying security. A put option is out-of-the money if the strike price is less than the market price of the underlying security.

Outstanding Bond Amount
The dollar amount of a bond outstanding as of the latest available balance sheet of a given corporation.

P

Par
The nominal or face value of a security. A bond selling at par is worth the same dollar amount as it was issued for, or at which it will be redeemed at maturity, usually $1000. For common stock, par value is set by the company issuing the stock. Par value is an assigned amount (usually $1) that is used in computing the dollar value of the company's shares for accounting and reporting purposes. See Bond.

Pay-Out Ratio
Pay Out Ratio = Average of the past 3 years' dividends / Earnings Per Share

Phone Switch
Some mutual funds allow the client to sell his or her shares and place proceeds in either a Money Market Fund or another Fund in its family, simply by telephoning a number.

Pink Sheets
The daily listing of stocks, prices, and market makers for over-the-counter (OTC) stocks too small in capitalization to be listed in the NASDAQ system.

Portfolio
All taxable and tax-deferred investment accounts and their contents (appreciating & income producing assets). More broadly, your portfolio holds all your investments.

Portfolio %
Indicates what portion of an account is invested in a given security.

Precious Metals Equities
Mutual fund investing primarily in stocks of companies who mine precious metals, such as gold, silver, platinum, etc. The stock prices of these companies can also reflect the rising or falling values of the precious metals that the company mines.

Preferred Stock
Stock that pays dividends at a stated rate and has priority over common stock in dividend payments and asset liquidation. Preferred stock does not ordinarily carry voting rights.

Price/Book Ratio
The latest price per share divided by the last fiscal year book value per share, for a given corporation.

Price (52-Week High and 52-Week Low)
The highest and lowest trade prices achieved during the past 52 weeks.
Note: Compare current price to the 52-week high or 52-week low to get an estimate of where the stock is trading in its year range.

Price (Date)
The market price of an investment, at any given time. Current price is the market price as of the latest price update. Average price is the arithmetic average of the price of all lots of an investment. See Cost.

Price (Trade)
Bonds. The actual trading prices for listed bonds. For over-the-counter bonds, the bid price is shown. Bonds are generally listed in lots of 1,000. Therefore, if Price = 99.5 (=99.5% of $1,000) = $995, at maturity, the price = 100% of the face value, or $1,000. Latest Price is from last trading day of the indicated month. This view displays: Maturity; Outstanding (millions); Latest, High, and Low Prices. Stocks and Options. The last trade price. Stocks that do not trade frequently display the bid price in the Price column. Bid price is what the buyer is willing to pay for the stock or options. Stocks also show daily highs and lows. Indices. The last value of a given index.

Price/Book Ratio
The latest price per share divided by the last fiscal year book value per share, for a given corporation.

Price/Earnings (P/E) Ratio
The most commonly used measure of value for both markets and individual stocks. It indicates how many times earnings an investor is willing to pay to own a stock or market index, therefore it is sometimes called the multiple. Current P/E is the current price divided by the current fiscal year's estimated earnings per share. Past P/E is the current price divided by the actual earnings per share for the past 12 months. 12-month High P/E is the 52-week high price divided by the EPS for the past 12 months. 12-month Low P/E is the 52-week low price divided by the EPS for the past 12 months.
Note: The past 12 months is not necessarily past year.

Prime Rate
The base rate on corporate loans posted by at least 75% of the nation's 30 largest banks. This is a useful measure for current lending rates, as most banks charge a few points above prime on mortgages and other personal loans.

Principal
The original amount or face value of a investment, typically bonds and CDs, on which interest is owned or earned. Interest is paid based on a percent of the principal (a stated interest or coupon rate). At maturity, the entire principal is returned to investor; however its purchasing value may be diminished by inflation.

Principal Transaction
A transaction in which the brokerage firm buys or sells a security into or from its own account. Commission is not charged for principal transactions. Instead the transaction is marked up or down before it is entered to the customer's account.

Proceeds
The sum of net amounts of all short open lots. Total proceeds is the sum of net proceeds of all short open investments in a given account. Average proceeds is for short investments what average cost is for long investments. See Average Cost.

Profit Margin %
The last fiscal year net income divided by the last fiscal year's sales or revenues for a given corporation.

Projected 5-Year EPS Growth Rate
The estimated average annual growth rate of fiscal year earnings per share for the next five years for a given corporation.

Projected Yield
Projected income divided by current value of a given account.

Prospectus
A formal written offer to sell securities to prospective shareholders. It is very useful to read the prospectus for a mutual fund before buying shares because it describes the philosophy, past performance, and fees.

Purchase Price
The market price you receive when you buy or sell short a security. Same as opening price.

Put Option
A put option gives the owner the right, but not the obligation, to sell the underlying stock at a given price (the strike price ) by a given time (the expiration date). The owner is speculating that the option will go up in value and the underlying stock will go down in value. The purpose can be to either speculate with the option (hope it goes up and sell for a profit) or trade the underlying stock at a locked in price if the stock price goes down enough. For example, an AAA MAR 65 put would give the owner the right to sell 100 shares of AAA at $65 (strike price) per share between now and the third Friday in March (expiration date).