mortgage-backed security a residential mortgage loan, purchased from banks and mortgage companies in large bundles or pools, either by a government institution or a private investment firm and converted into security based on the collective principal and interest payments to be made by borrowers.
municipal bond a bond issued by a state or local government agency to finance a large project.
municipal revenue bond a bond issued to finance a project that will eventually generate its own revenues, such as a toll bridge.
mutual fund a diversified investment fund trading in many different stocks, bonds, commodities, or money market securities.
NASDAQ National Association of Securities Dealers Automated Quotations system; it provides brokers with price quotations.
new issue a new stock or bond offering.
New York Coffee, Sugar and Cocoa Exchange a
commodities exchange trading in futures contracts.
New York Cotton Exchange a commodities exchange trading in futures contracts in cotton, orange juice, and propane.
New York Curb Exchange the American Stock Exchange, or Amex.
New York Mercantile Exchange an exchange trading in oil, gasoline, palladium, platinum, and potatoes.
New York Stock Exchange originating in 1792, the oldest and largest stock exchange in the United States. Also known as the Big Board and the Exchange.
Nifty Fifty the current 50 favorite stocks of institutional investors.
noise stock market movement caused by factors other than general market sentiment.
no-load fund mutual fund shares purchased directly, without a broker, so no sales fee is charged.
nonvoting stock stock, such as preferred stock, that does not give the holder a vote in important corporate affairs.
not rated referring to a security or a company that has not yet been rated by a securities rating company, such as Dun Bradstreet.
odd lot a purchase or rate of less than 100 shares. See round lot.
off-board not traded on the floor of the New York Stock Exchange, as OTC stocks sold over the phone.
on margin of securities, buying on credit.
open outcry in a commodity exchange, the shouting out of buy and sell offers by traders looking for buyers and sellers.
opm slang for other people's money, as used when buying securities on credit.
option a right granted to buy or sell a security at a locked-in price by a specific date.
option, call the right (bought by a fee or premium) to purchase shares of a security at a locked-in price by a specific date.
option, put the right (paid for with a premium) to sell a specific number of shares of a stock at a specific price by a specific date.
order ticket a buy or sell order form with all the information needed for a broker to make a transaction on behalf of his client.
OTC over-the-counter, referring to those securities traded not on an exchange floor but over the telephone by securities dealers.
outstanding a corporate finance term referring to stock held by shareholders.
overbought referring to a security that has risen too far in price and is due for a price decline or correction.
oversold referring to a security that has dropped sharply in price and is due for an increase.
over-the-counter see otc.
overvalued referring to a stock whose price has been driven higher than what is justified by the company's earnings potential.
Pac Man strategy named after the video game in which characters gobble each other up, a defensive strategy of attempting to take over a company that is trying to take over your company, achieved by buying up the threatening company's common shares.
painting the tape a form of illegal manipulation in which two or more investors buy or sell securities among each other in order to influence other investors into buying or selling.
par the face value of a security.
parking temporarily placing assets in a safe, low- risk investment until market volatility passes.
penny stock a stock that generally sells for under $1 per share.
period of digestion a period of price volatility followed by price stability after the release of a new stock issue.
phantom stock plan a company incentive in which an executive's bonus is paid according to the company's stock growth.
pit where commodities are traded, as distinguished from the floor for stock trading.
plow back of a new company, to put earnings back into the business instead of paying it out in dividends.
poison pill a device or strategy of a company that is threatened with being taken over to make its stock appear unattractive to the potential acquiring company.
portfolio an investor's diversified holdings.
portfolio manager a professional who chooses investments and manages the financial portfolios of others.
preferred stock stock in which dividends are paid preferentially over that of common stock; however, it is usually nonvoting stock.
premium bond a bond that sells for a higher price than its face value.
price/earnings ratio a stock price divided by earnings per share for the previous year or projected for the coming year. Also known as the multiple, or P/E, ratio.
prospectus a circular containing information on a company's history, finances, officers, plans, and so forth, sent to potential investors in a stock offering.
publicly held of a company with shares, held by the public.
pure play Wall Street term for a company that specializes in only one business, as distinguished from a conglomerate.
quotation a bid and asked price on a security or commodity.
quotation board in a brokerage house, an electronic display of current price quotations.
radar alert the monitoring of unusual trading in a company's stock in order to detect an impending takeover attempt. Also known as shark watching.
raider one who attempts to take over a company by buying up a large portion of its stock.
rally a rise in stock prices after a flat or bear market.
rating a rating of securities and credit risk by rating services such as Standard and Poor's Corporation.
registered competitive trader a New York Stock Exchange member who trades securities on his own behalf.
resistance level the high-water mark of a security's price; it is difficult to break through due to market psychology.
return profit on an investment.
rigged market a market being rigged by manipulators.
rollover the moving of assets from one investment to another.
round lot in stock, 100 shares or a multiple of 100.
round-tip trade a security that is purchased and then resold within a short period of time.
Sallie Mae the National Student Loan Marketing Association.
SP Standard and Poor's
scalper an investment adviser who purchases a security and then recommends it to clients in order to drive up its price and take a quick profit.