| Make up | |
| see settlement price | |
| Margin | |
| funds that are required to be held with the spreadbetting company against open positions. This represents the sum of the NTR and marked to market. | |
| 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 | |
| Margin factor | |
| see bet size factor | |
| 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. | |
| Margin trading | |
| 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. | |
| Market-maker | |
| New name for a broker who fixes the price of stocks and shares. | |
| Medium term | |
| Refers to stock with maturity dates of five to fifteen years. | |
| Middle price | |
| Halfway between the bid and offer price. | |
| Minimum trade requirement | |
| see notional trading requirement | |
| Momentum | |
| 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. | |
| 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. | |
| NASDAQ Composite | |
| an index of all stocks listed on the US Stock Exchange. This index is mainly used to track technology stocks and hence is not a good indicator of the whole market. See the Dow Jones Industrial Average (DJIA) index. More information available here | |
| Net asset value | |
| The value of a company after all debts have been paid expressed in pence per share. | |
| New issue | |
| A company coming to the market for the first time. | |
| New York Stock Exchange | |
|
The New York Stock Exchange is the largest equities marketplace in the world by value and lists in excess of 2,200 companies. These are required to release any announcements such as their annual and interim figures before the market opens and in many cases this news will break between midday and 1.00pm in the UK. Significant corporate news from the US can have an immediate impact in London and Continental Europe and will affect the share prices in New York once the market opens at 2.00pm. Such is the importance of the American markets that they have a huge influence over what is happening on this side of the Atlantic. Very often, a positive or negative start in London will turn around at this time of day in response to news coming out of the US. Traders with open positionsneed to be especially mindful of the risks. [Source: Shares Magazine] | |
| Nifty Fifty | |
| A popular spread-betting contract covering 50 Indian large caps. | |
| Nikkei | |
| index of 225 leading stocks traded on the Tokyo Stock Exchange. | |
| Nominee | |
| Someone acting on another's behalf. Shares may be registered in the name of a nominee rather than in your own name to allow the nominee to manage them for you (i.e. deal with rights issues etc.). This service can be very useful if you live abroad or are often away from home. Banks sometimes insist that you transfer your shares into the name of their nominee company if you offer them as security for a loan. The bank is then able to sell the shares if you fail to repay the loan. | |
| Nominal value | |
| The face value of a share or stock as opposed to its market value, also called par value. | |
| Notional trading requirement (NTR) | |
|
the level of funds required to be held with the spread betting firm at the opening of a trade. This amount is based upon market volatility. A deposit is required before any client can make a bet. This money must in the clients spread betting account in order to cover any potential losses. The amount required to have in your spread betting account to cover a trade varies depending on the financial instrument. Usually however the requirement is for 5%-25% of the total value of the position. Each position has an IMR(Initial Margin Requirement) value, which represents the deposit required for a 1 EURO (or GBP or USD) bet. Multiplying the IMR by the particular stake you wish to trade will indicate the deposit amount required for that trade. Also called margin required. For example: The IMR for the Hang Seng Index is 250. Therefore if you where to Buy the Hang Seng for 5 euro per point you must maintain a balance of at least 250*5 = 1250 Euro in your account. |
|
| NMS | |
| NMS or "normal market size" as defined by the London Stock Exchange for each stock and may be used to determine when a trade is required to be reported. | |
| OCO | |
|
(One Cancals the Other) - this is a mechanism for placing two orders at the same time, one above and one below the market; if one is triggered then the other is cancelled. For instance someone that had bought the Dow at 13,300 who wanted a stop loss at 13,200 and a limit to take profits at 13,600 could use an OCO order to ensure that as soon as either the limit or the stop is hit the other order would be automatically cancelled and not left hanging in the market. |
|
| Offer price | |
| The price at which a stock, index or commodity can be bought. In spread betting this is the price at which the client can make an 'up bet' (buy) with the spread betting company. Sometimes, referred to as the ask or asking price. | |
| Open positions | |
| trades that are currently running within a portfolio. | |
| Options | |
|
The right to buy (call option) or sell (put option) a specified share at a specified price within a specified period. For this privilege you pay option money. There is no obligation for you to buy or sell the shares. You can let the option lapse if you wish. Example: You pay 20p per share for a three months' call option on Lucky Day shares at 265p, being the price at which they are standing in the market at present. During the next three months the shares rise to 305p so you take up your option to buy at 265p and make a net profit of around 20p a share. Alternatively, if the shares fall to 250p you do not take up your option, but lose 20p per share. A double option gives the right to buy or sell a share. A traded option is an option which itself can be traded throughout the course of its life. Another definition: The right, but not the obligation, to buy or sell an underlying financial instrument on or before a give date at the given price (called the strike price) A call is a right to buy while a put is a right to sell. The main attraction of options is that you limit your risks but not your rewards. The rule is if you see a good profit, take it quickly. They are however risky and not for the unexperienced. |
|
| Order | |
| a pending trade that is only executed as a trade when the trader's conditions are met. For example, a spread better might place an order to buy an index future if its price falls to a certain level. | |
| Ordinary share | |
| A share on which the dividends vary in amount depending on the decision of the directors and based on the profitability of the company. | |
| Ordinary stop-loss | |
| a pre-determined level at which a bet is closed to limit the loss on that bet if the price moves adversely. A risk management tool in spread betting. Also called non-guaranteed stop-loss. See guaranteed stop-loss | |
| Our Quote | |
| orders and stops may be left basis the spread betting firm ("our quote"). | |
| Out of the money | |
| an option where the strike price is above the current level for a call and below the current level for a put. | |
| Overclosure | |
| see cut and reverse | |
| Over trading | |
| opening more positions that the account can support. | |
| Over the counter market (OTC) | |
| A market outside the stock exchange in which small companies are able to raise money by issuing shares to the public. Very risky. |