Stock Market Help
Here is a list of common financial terms. Click on the letter that corresponds with the first letter of the financial term to get the definition.
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 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.
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.
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 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.