M1
| Money supply as measured by the sum of currency in circulation plus demand deposits in commercial banks, traveler's checks and other checkable deposits (including the net of demand deposits due to foreign commercial banks and official institutions).
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M2
| M1 plus overnight repurchase agreements and Eurodollars, MMMF balances (general purpose and broker/dealer), MMDA's, and savings and small time deposits.
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M3
| M2 plus large time deposits, term repurchase agreements, and institution-only MMMF balances.
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Maintenance Call
| See House Maintenance Call.
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Maintenance Margin
| A set minimum margin (per outstanding futures contract) that a customer must maintain. See also Margin.
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Make a Market
| Refers to brokerage firms that buy and sell a particular over-the-counter stock for their own accounts at their own risk.
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Managed Account
| See Controlled Account and Discretionary Account.
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Management Company
| The group of individuals responsible for managing a mutual fund's portfolio.
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Margin
| The amount of money or collateral deposited by a customer with his broker, by a broker with a clearing member, or by a clearing member with the clearinghouse, for the purpose of insuring the broker or clearinghouse against loss on open futures contracts. The margin is not partial payment on a purchase. (1) Initial margin is the total amount of margin per contract required by the broker when a futures position is opened; (2) Maintenance margin is a sum which must be maintained on deposit at all times. If the equity in a customer's account drops to, or under, the level because of adverse price movement, the broker must issue a margin call to restore the customer's equity. See Variation Margin.
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Margin Account
| An account in which the firm lends the customer money on purchases or securities on short sales. Customers must have enough equity in the account to pay for purchases by the third business day after trade or meet obligations that may be incurred immediately.
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Margin Call
| (1) A request from a brokerage firm to a customer to bring margin deposits up to initial levels; (2) a request by the clearinghouse to a clearing member to make a deposit of original margin, or a daily or intra-day variation payment, because of adverse price movement, based on positions carried by the clearing member.
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Margin Department
| The department of a brokerage firm that computes the balance their clients need to keep in order to avoid maintenance and margin calls.
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Margin Requirement
| The percentage of investment that may be financed using borrowed capital.
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Mark to Market (or End Of Day)
| Traders account for their positions in two ways: accrual or mark-to-market. An accrual system accounts only for cash flows when they occur, hence, it only shows a profit or loss when realized. The mark-to-market method values the trader`s book at the end of each working day using the closing market rates or revaluation rates. Any profit or loss is booked and the trader will start the next day with a net position.
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Market Correction
| In technical analysis, a small reversal in prices following a significant trending period.
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Market Marker
| A professional securities dealer who has an obligation to buy when there is an excess of sell orders and to sell when there is an excess of buy orders. By maintaining an offering price sufficiently higher than their buying price, these firms are compensated for the risk involved in allowing their inventory of securities to act as a buffer against temporary order imbalances. In the commodities industry, this term is sometimes loosely used to refer to a floor trader or local who, in speculating for his own account, provides a market for commercial users of the market. See Specialist System.
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Market Not Held
| Type of market order usually for a sizable amount of stock that gives the floor broker discretion with respect to price and/or timing on execution.
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Market Order
| An order to buy or sell futures contracts that is to be filled at the best possible price and as soon as possible. In contrast to a Limit Order which may specify requirements for a price or time of execution. See also Limit Order.
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Market Risk
| Risk relating to the market in general and cannot be diversified away by hedging or holding a variety of securities.
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Marketer
| See Distributor.
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Market-if-Touched (MIT) Order
| An order that becomes a market order when a particular price is reached. A sell MIT is placed above the market; a buy MIT is placed below the market. Also referred to as a board order.
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Market-on-Close (MOC)
| An order to buy or sell at the end of the trading session at a price within the closing range of prices. See Stop-Close-Only Order.
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Market-on-Opening (MOO)
| An order to buy or sell at the beginning of the trading session at a price within the opening range of prices.
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Mark-to-Market
| Daily cash flow system used by U.S. futures exchanges to maintain a minimum level of margin equity for a given futures or option contract position by calculating the gain or loss in each contract position resulting from changes in the price of the futures or option contracts at the end of each trading day.
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Marry a Put
| Form of hedging done by buying the stock and buying a put on the same day.
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Matched Sales
| See Reverse Repurchase Agreements.
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Matching
| The aligning of purchases with corresponding sales as trades are processed.
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Maturity
| The period within which a futures contract can be settled by delivery of the actual commodity. The period between the first notice day and the last trading day of a commodity futures contract. Also, the due date of a loan, note, bond, or mortgage-backed security.
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Maximum Price Fluctuation
| See Limit (Up or Down).
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Member
| An individual who owns a membership (a seat) on an exchange.
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Member Firm
| A partnership or corporation that owns a membership on an exchange.
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Member Rate
| Commission charged for the execution of an order for a person who is a member of the exchange.
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Member's Rate
| Commission charged for the execution of an order for a person who is a member of the exchange.
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Merger
| The combination of two or more companies into one through the exchange of stock.
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Metric Ton
| 2, 204.6 pounds.
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MGE
| The Minneapolis Grain Exchange.
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MidAm
| The MidAmerica Commodity Exchange.
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Mine and Yours
| To announce that a trader wants to buy he/she may say or type Mine. This would also be known as taking the offer. To sell he will use yours. This would be known as `hitting the bid`.
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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.
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Minimum Price Contract
| A hybrid commercial forward contract for agricultural products which includes a provision guaranteeing the person making delivery a minimum price for the product. For agricultural commodities, these contracts became much more common with the introduction of exchange-traded options on futures contracts, which permit buyers to hedge the price risks associated with such contracts.
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Minimum Price Fluctuation
| Smallest increment of price movement possible in trading a given contract. See Tick.
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Mini-refunding
| Auctions of Treasury securities occurring in March, June, September, and December.
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Minus Tick
| An execution price below the previous sale.
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Momentum
| In technical analysis, the relative change in price over a specific time interval. Often equated with speed or velocity and considered in terms of relative strength.
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Money Market
| Short-term debt instruments.
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Money Market Fund
| A type of mutual fund that specializes in securities of the money market, such as T bills and commercial paper.
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Money Market Instruments
| Short-term debt instruments (such as U.S. Treasury bills, commercial paper, and banker's acceptances) that reflect current interest rates and that, because of their short life, do not respond to interest rate changes as longer-term instruments do.
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Money Markets
| Refers to investments that are short-term (i.e. under one year) and whose participants include banks and other financial institutions. Examples include Deposits, Certificates of Deposit, Repurchase Agreements, Overnight Index Swaps and Commercial Paper. Short-term investments are safe and highly liquid.
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Mortgage
| A conveyance of interest in real property given as security for the payment of debt.
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Mortgage Banker
| An intermediary that originates loans to permanent investors.
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Mortgage Bond
| A debt instrument issued by a corporation and secured by real estate owned by the corporation (such as factories or office buildings).
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Mortgage-Backed Securities
| A collection of mortgages bundled into a single security and retailed to private or institutional investors as a single security.
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Mortgagee
| A party to whom property is conveyed as collateral for a loan.
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Mortgagor
| A borrower of funds.
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Multiplier
| In stock index futures trading, the multiplier is the dollar value that is multiplied by the under value to determine the dollar market value of the futures contract.
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Muni
| Short for municipal bond.
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Municipal Bond
| A long-term debt instrument issued by a state or local government. It usually carries a fixed rate of interest, which is paid semiannually.
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Municipal Note
| A short-term debt instrument of a state or local government. Most popular are revenue, bond, and tax anticipation notes.
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Municipal Securities Rule Making Board (MSRB)
| Establishes rules and regulations to be followed in the trading, dealings and customer relationships concerned in municipal securities.
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Mutual Fund
| A pooling of many investors’ money for specific investment purposes. The fund is managed by a management company, which is responsible for adhering to the purpose of the fund.
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