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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.

Management/Closely Held Shares:

Percentage of shares held by persons closely related to a company, as defined by the Securities and Exchange Commission.

Management Fees:

The component of a mutual fund's expense ratio that refers to the percentage of a fund's net assets paid to the fund's advisor; the firm primarily responsible for a fund's day-to-day operation.

Margin/Margin Requirement:

The minimum equity required to support an investment position. To buy on margin refers to borrowing part of the purchase price of a security from a brokerage firm.

Margin Account:

An investment account which allows the purchase of securities with funds borrowed from the broker at a specified interest rate.

Margin Balance:

A debit in a securities account secured with stocks and/or bonds which have been 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, that is, to meet the margin call, positions in the account may be liquidated. There are three types of margin calls: House, Exchange, and Federal. See also HOUSE CALL.

Market Capitalization:

Also known as market cap. The total dollar value of all outstanding shares. Computed as shares x current market price. It is a measure of corporate size.

Margin Debt:

A debit 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 Department:

The department of a brokerage firm that computes the balance the firm's clients need to keep in order to avoid maintenance and margin calls.

Margin Loan Availability:

The amount of money an investor may withdraw from his or her account using margin eligible securities in the margin account as collateral.

Margin Requirement (Options):

The amount of cash an uncovered (naked) option writer is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intraday price changes.

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.

Market Order:

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

Market Quote:

A quotation of the current best bid/ask prices for an option or stock in the marketplace (an exchange trading floor). For listed options and stocks, these quotes are widely disseminated and available through various commercial quotation services.

Market Risk:

Risk experienced from daily fluctuations in the price of a security.

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 the 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.

Market-maker:

One (a person or firm) who buys and sells securities for one's own account. Responsibilities include; making bids and offers, providing liquidity and maintaining a fair and orderly market. Market makers normally try to profit from the spread by trading in and out of positions rather than establishing long-term positions. Specialists on the organized stock exchanges, option exchanges and dealers in the over-the-counter market are market makers. See also SPECIALIST; SPECIALIST GROUP.

Market-Not-Held Order:

A type of market order which allows the investor to give discretion regarding the price and/or time at which a trade is executed.

Market-On-Close Order (MOC):

A type of order which requires that it be executed at or near the close of trading day on the day the order is entered. A MOC order, which can be considered a type of day order, cannot be used as part of a GTC order.

Mark-to-market:

An accounting process by which the securities held in an account are valued each day to reflect the closing price or market quote, if the last sale is outside of the market quote. The result of this process is that the equity in the account is updated daily to properly reflect current security prices.

Married Put Strategy:

The simultaneous purchase of stock and put options representing an equivalent number of shares. This is a limited risk strategy during the life of the puts because the stock can always be sold for at least the strike price of the purchased puts.

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 maturity.

Mean Estimate:

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

Member Firm:

A partnership or corporation whose partners or officers are members of a security exchange or self-regulatory organization and which is itself therefore a member of the exchange.

Merger:

The combining of two or more entities into one, through a purchase acquisition or a pooling of interests. Differs from a consolidation in that no new entity is created from a merger.

Minimum Deposit:

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

Minimum Investment:

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

Minimum Maintenance:

Established by the exchanges' margin rules, the level to which the equity in an account may fall before the client must deposit additional equity. It is expressed as a percentage relationship between debit balance and equity or between market value and equity.

Minority Interest:

An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes.

Minus Tick:

An execution price below the previous transaction.

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.

Model:

A mathematical formula used to calculate the theoretical value of an option. See also BLACK-SCHOLES FORMULA.

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.

Moving Average:

Used in charts and technical analysis, the average of security or commodity prices constructed in a period as short as a few days or as long as several years and showing trends for the latest interval. As each new variable is included in calculating the average, the last variable of the series is deleted.

Multi-listed/Multi-traded Option:

An option contract that is listed and traded on more than one national options exchange.

Municipal Bond:

A debt obligation issued by a state or municipality to support general governmental needs or special projects such as the construction of highways or school buildings.

Mutual Fund:

An investment company that pools money of individual investors and invests in stocks, bonds, options, futures, currencies or money market securities which become jointly owned by its shareholders. The shareholders receive interest and dividends and share equally in the gains and losses generated by the fund. An open-end mutual fund continuously offers new equity shares and can be purchased on any business day at the net asset value. A closed-end mutual fund issues a fixed number of shares that are traded in the secondary marketplace, either on an exchange or over the counter, where the price is determined by supply and demand and not by the net asset value.