Spread Betting Glossary

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  Maintenance margin
Spread bets are traded on margin meaning that you do not pay for the full cost of the stock positions you control. This means that profits and losses fluctuate as the market moves and the maintenance margin is the percentage amount of the full value of the position you control that you need to maintain in your account.
  Make up
See settlement price. The final result at which a bet in a particular market is settled.
  Management Buy-outs/Buy-ins
Buyout is where existing management raises finances to take the company private. Buy-in is where outside management buys the company and takes control.
The use of a margin allows an investor or a spreadbetter to trade without them being in full possession of the necessary funds. The margin is the part payment of costs to cover contractual obligations, thereby protecting the investor or better against unlimited losses. In other words margin refers to the amount of monies that is required to be held with the spreadbetting company against open positions. This represents the sum of the NTR and marked to market. The margin represents a security deposit.
  Margin call
in spread betting, this is the call from the spread betting company to a customer demanding the deposit of further funds to cover an adverse price movement. Usually this is because the market has moved against you and your spread bet is showing a loss bigger than the maintenance margin that is needed to keep the trade open.
  Market capitalisation
Or Market Cap. Stock market value of a firm. The market value of shares outstanding. The market cap (market capitalisation) of a company is the current market value of that company. It is simply the number of shares outstanding (the number of shares able to be bought or sold on the market) multiplied by the share price. i.e. it is calculated by multiplying the current share price by the total number of shares issued. It is a measure of value and used in most valuation ratios. As such, the market value of a company, as calculated by multiplying the total number of shares in issue by the share price. Often abbreviated to 'Market cap'.
  Margin factor
see bet size factor. The multiplication factor used to calculate the margin required to open a spread bet. For indices the factor is usually a number, so the margin requirement is the stake multiplied by the number. For equities it is usually a percentage, so the margin requirement is the stake multiplied by the price, multiplied by the percentage. Also known as the 'Notional Trading Requirement' or 'Bet Size Factor'.
  Margin requirement
the amount of money you must have access to when you are trading on margin. It is typically calculated using a specified margin factor, and will be a small percentage of the overall trade value.
  Market hours
normal opening hours for a market. Usually 8.00 am to 4.30 pm. Although some indices and share may trade from 7.00 am or until 5.00 pm.
  Market order
An order that gets you in or out of the market at the latest market price.
  Margin trading
A process that allows investors to borrow funds from a brokerage at a particular rate of interest. The added gearing will however cost the investor more money should the market move in the opposite direction tothe way they had anticipated. In other words a facility offered by some brokers and spreadbetting companies, whereby you can open a position (take out a bet), but only put down (or hold in your account) a percentage of your total exposure. In effect, the broker or spread better is 'lending' you the money, until the outcome is known. But if it looks as if you will make a loss, you can be asked to pay more money - a 'margin call'
  Marked to Market
The profit/loss of the open bet when re-valued at the current price.
Buys and sells shares. New name for a broker who fixes the price of stocks and shares. In sports these are the traders at the spread betting firms who are responsible for setting the quotes and trading games in-running. Different traders specialise in different sports.
  Match Bet
A bet on the performance between two teams, individuals or horses in an event against each other, regardless of how well they do against any of the other participants.
  Maximum make-up
Term used in sports spreads. A limit set by a firms before a bet is struck on the maximum a particular market can make-up at.
  Maximum Computer-Generated Stop Loss (CGSL)
The maximum figure used to automatically allocate a stop-loss on newly opened positions. If you have sufficient funds on deposit to cover the CGSL figure, some spread betting providers might assign a stop loss level at 80% of the CGSL. Otherwise, the system will allocate a stop-loss calculated as, say, 80% of the funds available in your account. This system is used at Capital Spreads.
  Medium term
Refers to stock with maturity dates of five to fifteen years.
  Merchant Bank
Issues and underwrites shares, buys and sells shares and bonds and other financial instruments.
When two companies come together. The combining of two or more companies into one through share acquisition or other agreed pooling of resources.
  Mib 30
this is the Italian Stock market index.
  Middle price
Halfway between the bid and offer price. The mid-price is the mid point between what a market maker will pay for a share (bid) and what he will sell shares for (known as the offer).
  Minimum trade requirement
see notional trading requirement
  MOC order
'Market-on-close'. This is an order to cover a spread bet on close. If a spread trader was short the Dow, by placing a buy MOC order this position would be covered on the close.
the strength behind a price movement. Momentum investors look for upward or downward trends in stock price or earnings. They believe that the price of a particular market will continue to head in the same direction on the premise that there are a large number of investors in the market who will buy whatever stock is already 'hot' or, conversely, sell.
  Momentum trading
A strategy that uses various technical indicators to identify trends in a market, which can be exploited for profit. 'Trend trading' and 'Swing trading' are terms that are often used synonymously with Momentum trading, although they are sometimes used to signify the same strategy employed over different timeframes.
  Monetary Policy
Governments have two main policy tools to boost economic growth: Monetary Policy and Fiscal Policy. Monetary policy is about governments and central banks changing interest rate levels to control the supply, availability and cost of borrowing. Typically, governments lower interest rates to combat recessions thereby making it cheaper to borrow and less rewarding to keep money in a bank. Higher interest rates are used to 'cool and economy' by making it more expensive to borrow and control inflation.
Credit rating agency.
  Moving Average
this shows the average value of an instrument over a period of time. The average price a share has traded at over the last x number of days. Common moving averages that technical anaysts watch are 5, 20, 50 and 200 day moving averages.
Used in sports. The total number of corners gained by both teams in the first half of a football match, multiplied by the total number in the second half.
  Mutual Fund
this acts a lot like a big basket of stocks. There are a lot of Mutual Funds to choose from, and each basket has a different collection of stocks in it. At any one time, some stocks in that basket might be doing well (going UP) and some will be doing bad (going Down). What this does is moderate the volatility; there are not the big ups or the big downs as with a single stock. Mutual Funds are usually a much better alternative than stocks. They are not nearly as risky.