Stands for Moving Average Convergence/Divergence. The MACD method, developed by Gerald Appel, is a trending indicator, telling us whether a stock is in an uptrend or a downtrend. (See Report. )
MACD - Histogram
Thomas Aspray found that MACD signals often lagged important market moves, especially when applied to weekly charts. He first experimented with changing the moving averages and found that shorter moving averages did indeed speed up the signals. However, he was looking for a means to anticipate MACD crossovers and came up with the MACD Histogram. See Report.
Demand by a broker or exchange for more money to be deposited in a margin account in order to maintain an open position. The market going in the opposite direction of the initial position usually causes a maintenance call.
The amount of money that must be deposited with a broker for each contract traded as a good faith deposit to insure fulfillment of options and/or future contract(s). Most brokers require a set amount of money to initially open a trading account. Margins are usually only a fraction of the value of the underlying futures contract. Initial margin requirements and margin maintenance can change suddenly. Although both buyers and sellers of options must post margins, the margin for option buyers will never be more than the initial premium paid for buying a put or call.
Demand for additional money by a broker or exchange in order to maintain the required equity in the trader's account to keep a position open. Margin calls are activated when a position goes against a futures trader or an options seller, or if margin requirements are increased by the Exchange or the brokerage house. Option buyers will never get a margin call because they can not lose more than the initial premium paid to the option seller.
The tax rate applied to the last unit of income.
Is when profits and losses are posted to accounts for all futures and option positions. This is done at the end of each day.
The value of a company's outstanding shares, calculated by shares times current price.
An order to buy or sell at whatever price is obtainable at the time it is entered on the floor of the exchange.
A market maker is when a brokerage, bank or firm maintain a set bid and ask price with a set number of specific securities and when these prices are met must immediately buy or sell these securities from their own account. This is done to create liquidity in the security and is also known as "making a market". Typically there is a separation between the market makers and the brokerage so brokers don't recommend these securities to clients simply to create their new market.
The market rate refers to the average/current interest rate posted by lenders.
The part of a security's risk that cannot be eliminated and is measured/known by/as the beta coefficient.
A measurement of bullish or bearish attitudes among investors.
Donald Dorsey\'s mass index is used to signal an approaching trend reversal. The index is a 25 day moving sum of two moving averages. The first moving average is an exponentially smoothed moving average of the daily close and the second is the first average smoothed a second time. Values over 25 indicate a widening range and those less than 25 indicate a narrowing range. See Report.
The date when the option or swap matures. If the option has not been exercised by this date, it expires and ceases to have any value. For an interest rate swap this is the date when the final interest exchanges are made. For a bond and currency swap, the principal is paid / exchanged.
Short to intermediate term leading indicator showing overbought markets (above +100) and oversold markets (below -100). MO provides a valuable timing tool as bullish when MO breaks up through the zero line, or bearish when it breaks down. See Report.
McClellan Summation Index (MSI) indicator
Mid to long term indicator based on the sum of each day\'s McClellan Oscillator reading and used to spot major market turning points. MSI breaking above +1500 is considered oversold. MSI breaking below -1500 is considered overbought. See Report.
Micro cap refers to companies that have less the 250 million market capitalization.
See market cap
Mid cap (or medium cap) are companies that have between $1 billion to $5 billion market capitalization.
See market cap
Measures the velocity of price changes. The use of momentum indicators can warn of building strength or weakness in a market, often well ahead of a change in trend. See Report.
Money Flow Index (MFI) indicator
Volume indicator that tracks the flow of money into or out of a market. A divergence between the Money Flow Index and price trend can warn of a possible trend reversal. See Report.
The market in which dealers trade riskless, short-term securities such as certificates of deposit and Treasury bills.
Debt instruments where a borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan.
Moving Averages (MA)
Lagging indicators that smooth out the price action, much like a curving trendline. A simple 10 day MA, for example, adds up the last 10 days\' closing prices and divides the total by 10. Each day the procedure is repeated. See Report.
Moving Average bands
Parallel lines placed at a percentage above and below a moving average on a chart to form an envelope.
A company which invests the money of its shareholders in a variety of areas, like stocks, gold, bonds, or other investments.
Mutual Fund Liquidity Ratio
Ratio of cash (and equivalents) to total assets held by mutual funds (excluding money market funds). This ratio is published monthly by the Investment Company Institute, Washington, D.C.
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