Glossary
Manufacturing Production
Measures the total output of the manufacturing aspect of the Industrial Production figures. This data only measure the 13 sub sectors that relate directly to manufacturing. Manufacturing makes up approximately 80% of total Industrial Production.
Margin / margin requirement
The minimum equity required to support an investment position. To buy on margin refers to borrowing part of the purchase price of a security from a brokerage firm.
Margin Call
A request from a broker or dealer for additional funds or other collateral to guarantee performance on a position that has moved against the customer
Mark-to-market
An accounting process by which the price of securities held in an account are valued each day to reflect the closing price, or market quote if the last sale is outside of the market quote. The result of this process is that the equity in an account is updated daily to properly reflect current security prices.
Market order
A trading order placed with a broker to immediately buy or sell a stock or option at the best available price.
Market quote
A quotation of the current best bid / ask prices for an option or stock in the marketplace (an exchange trading floor). This information is usually obtained by the investor from someone at a brokerage firm. However, for listed options and stocks, these quotes are widely disseminated and available through various commercial quotation services.
Market-maker
An exchange member on the trading floor who buys and sells options for his or her own account and who has the responsibility of making bids and offers and maintaining a fair and orderly market. See also Specialist / specialist group / specialist system
Market-maker system, (competing)
A method of supplying liquidity in options markets by having market makers in competition with one another. An alternative to a specialist system. They are similarly charged with making fair and orderly markets in a given class of options.
Market-not-held order
A type of market order which allows the investor to give discretion to the floor broker regarding the price and/or time at which a trade is executed.
Market-on-close order (MOC)
A type of option order which requires that an order be executed at or near the close of trading on the day the order is entered. A MOC order, which can be considered a type of day order, cannot be used as part of a GTC order.
Married put strategy
The simultaneous purchase of stock and put options representing an equivalent number of shares. This is a limited risk strategy during the life of the puts because the stock can always be sold for at least the strike price of the purchased puts.
Maturity
The date for settlement or expiry of a financial instrument.
Model
A mathematical formula used to calculate the theoretical value of an option. See also Black-Scholes formula
Multiple-listed / multiple-traded option
Any option contract that is listed and traded on more than one national options exchange. See also Fungibility.