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Market Order Also known as an Unrestricted Order. An order to buy or sell a stock immediately at the best available current price. A market order is the only order that guarantees execution.

Market Maker Spread The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it. Simply put, the Market Maker Spread is the difference between the bid and ask for a given security. Since each Market Maker can either...

Market Maker On the NASDAQ system, a broker-dealer willing to accept the risk of holding a particular number of shares of a particular security in order to facilitate trading in that security. There are over 500 member firms that act as NASDAQ Market Makers. One of the major differences between...

Market Capitalization The dollar valuation of the total number of shares times the current price. This value is sometimes used by investors to classify stocks by size. It is not as reliable as classifying by sales dollar value because the price of a stock can be inflated by the market and not...

Market Arbitrage The simultaneous purchase and sale of the same security in different markets to take advantage of a price disparity between the two markets.

Markdown The difference between the highest current bid price among dealers and the lower price that a dealer pays to a customer.

Margin Of Profit Ratio Also known as the Operating Profit Ratio. A measure of a corporation’s relative profitability. It is calculated by dividing the operating profit by the net sales.

Margin Of Profit Ratio Also known as the Operating Profit Ratio. A measure of a corporation’s relative profitability. It is calculated by dividing the operating profit by the net sales.

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. The deposit must be made within one...

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. The deposit must be made within one...

Margin Account A brokerage account in which the broker lends the customer cash to purchase securities. The loan in the account is collateralized by the securities, and if the value of the stock drops sufficiently, the account holder will be required to deposit more cash or sell a portion of the...

Margin The use of borrowed money to purchase securities. This action is expressed by the phrase “buying on margin.”

Margin The use of borrowed money to purchase securities. This action is expressed by the phrase “buying on margin.”

Make a Market To stand ready to buy or sell a particular security as a dealer for its own account. A market maker accepts the risk of holding the security.

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.

M2 A category of the money supply that includes M1 in addition to all time deposits, savings deposits, and noninstitutional Money-Market Funds.

M1 A category of the money supply that includes all coins, currency, and demand deposits -- that is, checking accounts and NOW accounts.

Low PE The lowest PE ratio at which the stock sold during the year.

Long Term Liabilities A company’s liabilities for leases, bond repayments, and other items due in more than one year.

Long Term Debt-to-Capitalization A ratio that indicates a company’s financial leverage. It is calculated by dividing long term debt by the capital available to the company. The available capital is the sum of long term debt, preferred stock and stocholders’ equity.