| Joint Account | An account with two or more individuals acting as co-owners. |
| Joint Tenant | Type of ownership of property by two or more persons in which each owns an undivided interest in the whole. Upon the death of a joint tenant, the deceased owner's interest passes outside of probate directly to the remaining joint tenant(s). |
| Joint Tenants with Rights of Survivorship (JTWROS) | A joint account which allows the remaining tenant(s) to retain the deceased tenant's interest in the account. |
| Junk Bond | Bonds rated BB or below by Standard & Poor's Corporation and Ba or below by Moody's Investor Service. Junk bonds tend to be more volatile and higher yielding than bonds with higher quality ratings. |
| Junk Bond Fund | A fund that invests primarily in lower rated bonds (BB or below by Standard & Poor's Corporation and Ba or below by Moody's Investor Service), also referred to as junk bonds. Junk bond funds generally seek high returns and tend to be one of the riskier bond fund investments. |
| Keogh Plan | Tax-deferred retirement plan for a self-employed and unincorporated person or a person who has earned extra income aside from regular employment through personal services.<br></div> |
| Ladder | A fixed income investment strategy that seeks to reduce interest rate risk by investing in fixed income securities with a wide variety of maturities. Though this strategy assures continuous cash flow, there may be some sacrifice of total return, since shorter-term bonds tend to have lower yields than longer-term bonds. |
| Large-Caps | Stocks of companies with market capitalizations of more than $1 billion. Large-caps tend to be well established companies, so that their stocks entail less risk than smaller-caps, but which also offer less potential for dramatic growth. |
| Latin American Fund | A fund that invests primarily in the securities of companies in Latin American countries. |
| Legal Transfer | A type of transfer that requires legal documentation in addition to the normal forms. Usually in the name of a deceased person, a trust, or other third party. |
| Letter Of Intent | An agreement calling for an investor to invest a specific amount in a fund over a defined period in order to qualify for reduced sales charges. The reduced sales charge may apply to an individual fund or to all the funds operated by a single investment management firm. |
| Letter Of Renunciation | This applies to a rights issue and is the form attached to an Allotment Letter which is completed should the original holder wish to pass his entitlement to someone else or to renounce his rights absolutely. |
| Liabilities | Debts or anything owed to another person or party. Liabilities include credit card balances, loans secured by investment or personal assets, such as an automobile, or loans secured by a home. |
| Limit Order | An order that sets the highest price the customer is willing to be paid or the lowest price acceptable. Buy orders may be executed at or below the limit price, but never higher. Sell orders may be executed at or above the limit price, but never lower. |
| Limited Tax Bond | A municipal bond whose ability to pay back principal and interest is based on special tax. |
| Limited Trading Authorization | An account in which the customer gives the power to buy and sell only in his account to another person. |
| Liquid Assets | Cash or cash equivalents, such as money market funds or certificates of deposit. |
| Liquid Capital Available | For purposes of the premature death analysis, refers to any assets that are assumed to be liquidated at the death of a principal client and made available for immediate survivor capital needs. |
| Liquidation | (1) Closing out a position. (2) An action taken by the margin department when a client hasn't paid for a purchase. |
| Liquidity | (1) The ease with which an investment can be converted into cash. Shares in a fund are generally considered highly liquid investments because they can be sold on any business day for their then current value (which may be more or less than an investor's original cost). (2)The characteristic of a market that enables investors to buy and sell securities easily. |
| Listed Options | An option that trades on a national option exchange. |
| Listed Securities | Securities that trade on a national exchange. |
| Listed Stock | Stock that has qualified for trading on an exchange. |
| Load | A sales charge assessed by certain mutual funds (load funds) to cover selling costs. A front-end load is charged at the time of purchase. A back-end load is charged at the time of sale. |
| Loan Consent Agreement | An agreement whereby the customer gives the brokerage firm permission to lend his securities. |
| Loan Market Value | Value of securities in customer's account. |
| Loan Stock | Stock bearing a fixed rate of interest. Unlike a Debenture, loan stocks may be unsecured. |
| Loan Value | The amount of money, expressed as a percentage of market value, that the customer may borrow from the firm. |
| Long Position | (1) In a customer's account, securities that are either fully paid for (a cash account) or partially paid for (a margin account). (2) Any position on the firm's security records that has a debit balance. |
| Long-Term Bonds | Bonds that mature in more than ten years. |
| Long-Term Care | Continuous care that provides help with daily activities, such as bathing, eating and walking. May include health care provided by skilled or semi-skilled health professionals. |
| Long-Term Funds | All funds other than short-term funds (i.e., money market funds). |
| Make a Market | Refers to brokerage firms that buy and sell a particular over-the-counter stock for their own accounts at their own risk. |
| Management Company | The group of individuals responsible for managing a mutual fund's portfolio. |
| Management Fee | The amount a fund pays to its investment adviser for its services. The average annual fee industry wide is about one half of one percent of fund assets. A fund's management fee must be listed in its prospectus. |
| Manager | The Firm that provides the fund with investment research and portfolio management services. |
| Manager Tenure | How long the portfolio manager has been responsible for a fund's management. |
| Margin Account | An account in which the firm lends the customer money on purchases or securities on short sales. Customers must have enough equity in the account to pay for purchases by the third business day after trade or meet obligations that may be incurred immediately. |
| Margin Call | A demand upon a customer to deposit money or securities with the broker when the value of the securities purchased on margin falls. |
| Margin Department | The department of a brokerage firm that computes the balance their clients need to keep in order to avoid maintenance and margin calls. |
| Margin Requirement | The percentage of investment that may be financed using borrowed capital. |
| Marginal Tax Bracket | The range of taxable income that is taxed at a certain marginal tax rate. |
| Marginal Tax Rate | The tax rate that applies to the next dollar of taxable income. If another dollar of taxable income is received in the same tax year, the number of cents that must be paid in additional income taxes is the same as the percentage of additional income that will be paid in taxes. |
| Marital Deduction | A tax rule that allows assets to pass between spouses free from federal estate and gift taxes. If either spouse is not a U.S. citizen, however, different rules apply. |
| Mark-To-Market | Process by which security position values are brought up to their current value. The customer may request the excess equity, or the firm may call for the deposit of additional funds. Either request is a "mark" to the market. |
| Market Capitalization | Also referred to as "market cap." Market capitalization is a measure of a corporation's value, calculated by multiplying the number of outstanding shares of common stock by the current market price per share. Market capitalization is usually grouped into four main categories: large-cap, mid-cap, small-cap, and micro-cap. |
| Market Maker | Another term for dealer or specialist. In the interest of maintaining orderly trading, a market maker stands ready to trade against the public and therefore to make a market in an issue. |
| Market Not Held | Type of market order usually for a sizable amount of stock that gives the floor broker discretion with respect to price and/or timing on execution. |
| Market Order | An order to be executed at the current market price. Buy market orders accept the current offer, and sell market orders accept the current bid. |
| Market Risk | The risk created by market conditions that affect all investments of a similar class. For example, the value of a particular common stock may fall based on a decrease in the values of a large group of common stocks. See Investment risk. |
| Market Timing | Attempting to time the purchase and sale of securities to coincide with ideal market conditions. Mutual fund investors may switch from stock funds to bond funds to money market funds as the strength of the economy and interest rate directions change. |
| Marry a Put | Form of hedging done by buying the stock and buying a put on the same day. |
| Maturity | The date on which a loan becomes due and payable when bonds and other debt instruments must be repaid. |
| Maturity Date | The date on which the principal amount of a bond is to be paid in full. |
| Maximum Front-End Load | The fee an investor pays when purchasing shares of a fund. A fund has different load breakpoints depending on the purchase total. For example, a fund may charge:4.5% to $100,0004.0% to $250,0003.0% to $500,0002.0% to $1 Million0.0% thereafter |
| Merger | The combination of two or more companies into one through the exchange of stock. |
| Micro-Caps | A subset of small-caps. Stocks of companies with a market capitalization of less that $50 million are "micro caps." Micro-caps tend to be new, relatively untested corporations that can offer greater growth potential than larger caps, but also entail greater risk. |
| Mid-Cap Fund | A fund that invests primarily in the stocks of companies with a medium market capitalization (mid caps). |
| Mid-Caps | Stocks of companies with a medium market capitalization, usually defined as between $500 million and $3-5 billion. Mid-caps are often considered to offer more growth potential than larger-caps (but less than small caps) and less risk than small-caps (but more than large-caps). |
| Mini-Refunding | Auctions of Treasury securities occurring in March, June, September, and December. |
| Minimum Maintenance | Established by the exchanges' margin rules, the level to which the equity in an account may fall before the client must deposit additional equity. It is expressed as a percentage relationship between debit balance and equity or between market value and equity. |
| Minimum Purchase | The smallest investment amount a fund will accept to establish a new account. Most fund groups also impose a minimum for additional purchases to an existing account. |
| Minus Tick | An execution price below the previous sale. |
| Moderate Risk Tolerance | The capacity to reduce assurances regarding the expected rate of return and assurances of maintaining a stable principal in exchange for the possibility of earning a higher return. See Risk tolerance. |
| Money Market Fund | Money market funds seek to maintain a stable net asset value by investing in the short-term, high-grade securities sold in the money market. These are generally the safest, most stable securities available, including Treasury bills, certificates of deposit, and commercial paper. Money market funds limit the average maturity of their portfolio to 90 days or less. They seek to generate monthly income, and to maintain a stable $1.00 per share net asset value. Some money market funds offer check-writing privileges. No fees are generally charged to purchase or redeem shares in a money market fund. Several different portfolio types are available: Taxable, taxable government securities, and national or state tax-free. |
| Money Market Instruments | Short-term debt instruments (such as U.S. Treasury bills, commercial paper, and banker's acceptances) that reflect current interest rates and that, because of their short life, do not respond to interest rate changes as longer-term instruments do. |
| Money Market Securities | Short-term debt, usually issued for 90 days or less. |
| Money Purchase Pension Plan | A defined-contribution retirement plan into which an employer contributes a specified percentage of each employee's compensation each year. |
| Mortgage and Other Debt Expenses | Certain living expenses that remain at a fixed level rather than being subject to an assumed inflation factor. |
| Mortgage Bond | A debt instrument issued by a corporation and secured by real estate owned by the corporation (such as factories or office buildings). |
| Mortgage-Backed Securities | A collection of mortgages bundled into a single security and retailed to private or institutional investors as a single security. |
| Municipal Bond | Also known as Muni. A long-term debt instrument issued by a state or local government. It usually carries a fixed rate of interest, which is paid semiannually. |
| Municipal Bond Fund | A mutual fund that invests in municipal bonds. An investor in a municipal bond fund receives dividends, representing municipal bond interest payments, that generally are exempt from federal income taxes. |
| Municipal Note | A short-term debt instrument of a state or local government. Most popular are revenue, bond, and tax anticipation notes. |
| Municipal Securities | Bonds issued by state or local government units. |
| Mutual Fund | An open-end investment company that combines the money of thousands of people and invests it in a variety of securities in an effort to achieve a specific objective over time. Mutual funds offer the benefits of portfolio diversification (which provides greater safety and reduced volatility), professional management, and stand ready to buy back its shares at the current net asset value. Every fund's prospectus details information on the fund's objectives, fees, the management company, and moreMutual funds, known as open-end investment companies, have portfolios that can grow or be reduced, based upon market conditions and investor investment/redemption patterns. Hence the name: they have limitless numbers of shares outstanding. Closed-end funds, also called unit investment trusts, have a fixed portfolio, and a pre-set number of shares outstanding. |
| Naked Call | Occurs when an investor sells a call(s) without owning the underlying securities and is not selling to close out a position. |
| NASDAQ | Acronynm for the National Association of Securities Dealers Automated Quote System. A communication network used to store and access quotations for qualified over-the-counter securities in the US. |
| National Association of Security Dealers (NASD) | A self-regulating authority whose jurisdiction includes the over-the-counter market. |
| National Securities Clearing Corporation (NSCC) | A major clearing corporation offering many services to the brokerage community, including comparison of NYSE, AMEX, and over-the-counter transactions. |
| Natural Resources Fund | A fund that invests primarily in securities of companies that own, process, transport, or market natural resources, which can include metals, minerals, and forest products. |
| Negotiable | A feature of a security that enables the owner to transfer ownership or title. A non-negotiable instrument has no value. |
| Net Asset Value (OFS) | The current market worth of a mutual fund's share. A fund's net asset value is calculated daily by taking the funds total assets, securities, cash and any accrued earnings, deducting liabilities, and dividing the remainder by the number of shares outstanding. In an open-end fund quote, the OFS is the bid side; the offer side is the OFS plus the sales charge. |
| Net Worth | The difference between the total value of assets and the total amount of liabilities. |
| New Issue | A company coming to the market for the first time or issuing additional shares. |
| New Shares | Shares newly issued by a company; these shares can usually be transferred on Renounceable Documents. |
| New York Stock Exchange (NYSE) | Located at 11 Wall Street, New York, New York, a primary market for buying and selling the securities of major corporations. |
| Nil Paid | A new issue of shares, usually as the result of a rights issue on which no payment has yet been made. |
| No Load Fund | A fund that sells its shares directly to investors without a sales charge. |
| Nominal Yield | The interest rate stated on the face of the bond. |
| Nominee Name | Name in which a security is registered and held in trust on behalf of the beneficial owner. |
| Non-Qualified Assets | Assets that are not invested in a qualified retirement plan or an IRA. |
| Non-qualified Tax-deferred Annuity | An annuity that is not purchased within a qualified retirement plan or IRA. See Deferred annuity. |
| Noncallable | A note or bond that cannot be called prior to maturity. Many Treasury and most agency securities are noncallable. |
| Noncompetitive Tender | A method of purchasing Treasury bills, notes, and bonds directly from the Federal Reserve at the average price during an auction of new securities. |
| Noncumulative Preferred Stock | A type of preferred stock that does not pay back dividends to its holders. |
| Not Held (NH) | An indication on an order that the execution does not depend on time; the broker or trader should take whatever time is necessary to ensure a good execution. |
| Note | The general name for a Treasury or agency security with an initial maturity of fewer than 10 years. |
| Maintenance Requirement | On the NYSE. This is the minimum amount of equity that the margin customer must have in his account. However, since the house requirements are usually higher, it is the house maintenance that is used. |