Glossary beginning with M

M

Margin Call

Communication to a client asking to cover an adverse price movement on a derivative product.

Australian Securities Exchange

Market Capitalization

"The market capitalization of a stock exchange is the total number of issued shares of domestic companies, including their several classes, multiplied by their respective prices at a given time. This figure reflects the comprehensive value of the market at that time.The market capitalization figures include:  - shares of domestic companies ;  - shares of foreign companies which are exclusively listed on an exchange, i.e. the foreign company is not quoted on any other exchange ;  - common and preferred shares of domestic companies ;  - shares without voting rights.The market capitalization figures exclude:  - collective investment funds ; -  rights, warrants, ETFs, convertible instruments ;  - options, futures ;  - foreign listed shares other than exclusively listed ones ;  - companies whose only business goal is to hold shares of other listed companies;  - companies admitted to trading (companies admitted to trading are companies whose shares are traded at the exchange but not listed at the exchange)."

WFE

Market Maker

A legal entity that trades for its own account. A market maker must at all times display bid and ask prices, for which minimum quantities and maximum spreads are defined instrument by instrument. A market maker must also meet minimum volume requirements in the contract(s) in which it makes a market. In return, market makers pay lower transaction fees.

NYSE Euronext

Market Order

Order to a broker to buy or sell at the current market price at the time the order is given.

Australian Securities Exchange

MiFID

MiFID stands for Markets in Financial Instruments Directive; or Directive on Markets in Financial Instruments. MiFID has been in force since 1 November 2007. It was drawn up by the European Union with the aim of improving investor protection, increasing competition and harmonising the European financial market. MiFID applies to the EU/EEA Member States and to the financial services providers registered there.

SIX Swiss Exchange

Mutual Fund

A portfolio of stocks, bonds, or other securities administered by a team of one or more managers from an investment company who make buy and sell decisions on component securities. Capital is contributed by smaller investors who buy shares in the mutual fund rather than the individual stocks and bonds in its portfolio. The return on the fund's holdings is distributed back to its contributors, or shareholders, minus various fees and commissions. This system allows small investors to participate in the reduced risk of a large and diverse portfolio that they could not otherwise build themselves. They also have the benefit of professional managers overseeing their money who have the time and expertise to analyze and pick securities. There are two types of mutual funds, open and closed-ended. Shares in closed-end funds, are readily transferable in the open market and are bought and sold, like other stock. These funds do not accept new contributions from investors, but only reinvest the return on the existing portfolio. Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed on exchanges. Open-end funds are so called because their capitalization is not fixed.

NYSE Euronext