Mutual Fund Related: open-end fund, closed-end fund. Pools of money managed by investment companies, regulated under the 1940 Investment Company Act. Investors have many different investment goals to choose from, depending on the strategy of the fund manager. For example, some funds … [Read more...]
Mutual Offset
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Mutual Offset Arrangement that allows trading position established by a trader in one exchange to be set off in another exchange. For example, offsets of this nature are possible between CME and SIMEX. … [Read more...]
Mutually Exclusive Investment Decisions
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Mutually Exclusive Investment Decisions Decision to make investment that prevents making other investments. The decision may be exclusive by nature or by circumstance. … [Read more...]
Naive Diversification
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Naive Diversification Strategy used by investor to spread investment over several assets of different types to lower the variance of return expected from the portfolio as a whole. Also see: Markowitz diversification. … [Read more...]
Naked Option Strategies
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Naked Option Strategies Strategy that is not hedged and that uses either a technique of buying call options (long call strategy), buying put options (long put strategy), selling put options (short put strategy) or selling call options (short call strategy). These strategies are … [Read more...]
NASDAQ
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NASDAQ A purely electronic exchange where quotes are listed and trades are completed on electronic media. Stands for National Association of Securities Dealers Automatic Quotation System. Popularly traded common stocks in OTC market are listed on this exchange. About 4000 common … [Read more...]
National Futures Association (NFA)
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National Futures Association (NFA) Self-regulatory body set up in 1982 for supervising and regulating futures industry. … [Read more...]
National Market
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National Market Also see: internal market. Domestic and overseas market within a country. Gives the supply and demand for securities transacted here. … [Read more...]
Nationalization
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Nationalization Change from private ownership to government control in a company. … [Read more...]
Natural Logarithm
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Natural Logarithm Value of 2.7183, approximately. Logarithm to base e. … [Read more...]
Nearby
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Nearby Also see: deferred futures. Most recent month when active trading took place in commodity futures market or financial market. … [Read more...]
Nearby Futures Contract
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Nearby Futures Contract Contract with nearest settlement date when many futures contracts are compared. Any contract that settles immediately after this one is the next and so on with the contract settling farthest in time being called the most distant futures contract. Used to … [Read more...]
Negative Amortization
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Negative Amortization When principal due in a loan increases with time instead of decreasing or amortizing, it is termed negative amortization. May happen when monthly repayments do not adequately cover the entire amount needed to reduce principal balance. The outstanding principal … [Read more...]
Negative Butterfly
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Negative Butterfly Shift in yield that is not parallel. Short and long-term yields fall to a greater extent than other maturity rates. … [Read more...]
Negative Carry
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Negative Carry Also see: net financing cost. Cost of a position on an investment where its cost of carry is higher than income currently derived from it. … [Read more...]
Negative Convexity
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Negative Convexity Phenomenon found in bond securities that increase in price is high when yield improves but price does not fall to the same degree when yield declines. … [Read more...]
Negative Covenant
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Negative Covenant Stipulation or covenant with a bond that restricts the issuer from specific actions without approval from bond holders. … [Read more...]
Negative Duration
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Negative Duration When price of mortgage backed security (MBS) moves in line with interest rates. … [Read more...]
Negative Growth
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Negative Growth Phenomenon where country’s economy contracts. Denoted by falling GDP in any quarter of the year. … [Read more...]
