MIT
Market if touched (MIT). A limit
order that automatically becomes a market order if the price is reached.
Maintenance Margin
The minimum margin that must be
maintained on a futures contract.
Management Charge/Fees
The amount a mutual fund pays to
its investment adviser for services rendered, including management of the
fund’s portfolio.
Manipulation of financial markets
Activities whose objective is to
alter prices in financial markets through the use of techniques that result in
unnatural market prices, often through the use of wash sales or reporting of
fictional or apparent market prices.
Maple Leaf
Debt warrants entitling the
holder to purchase a Government of Canada Bond.
Margin
An advance payment of a portion
of the value of a stock transaction. The amount of credit a broker or lender
extends to a customer for stock purchase.
Markdown
A charge levied by a broker when
buying securities on its own account from a customer. (These purchases as
principals from customer take place at the best bid prices minus a commission
equivalent to markdown).
Marked to market basis
The process whereby the book
value or collateral value of a security is adjusted to reflect current market
value.
Market capitalization
The market value of a company,
calculated by multiplying the number of shares issued and outstanding by their
current market price.
Market Maker
A member firm who give two way quotation for particular
security (ies) and who is under an obligation to buy and sell them subject to
certain conditions such as overall exposure, spread etc.
Market Model
This relationship is sometimes
called the single-index model. The market model says that the return on a
security depends on the return on the market portfolio and the extent of the
security’s responsiveness as measured by beta (b). In addition, the return will
also depend on conditions that are unique to the firm. Graphically, the market
model can be depicted as a line fitted to a plot of asset returns against
returns on the market portfolio.
Market Price
The last reported sale price for
an exchange traded security.
Marketable Lot
A fixed minimum number, in which
or in multiples of which, shares are bought and sold on the stock exchange. For
shares whose face value is Rs. 10, the marketable or trading lot may be 50 or
100. For Rs. 100 shares the market lot is usually 5 or 10. Companies may,
however, decide on other lots, such as 1 share for Rs. 500, although it is now
rare. Any number of share less than the marketable lot makes an odd lot,
difficult to buy and disadvantageous to sell. When companies issue bonus or
rights shares in less than 1:1 ratio, odd lots are often the result.
Marking Up Prices
Prices fixed by the Stock
Exchange to facilitate settlement of bargains in the specified securities,
particularly at the end of the settlement period.
Mark to market margin (MTM)
Collected in cash for all Futures
contracts and adjusted against the available Liquid Net worth for option
positions. In the case of Futures Contracts MTM may be considered as Mark to
Market Settlement.
Marking Up Prices
Prices fixed by the Stock
Exchange to facilitate settlement of bargains in the specified securities,
particularly at the end of the settlement period.
Markup
A charge levied by a broker when
selling securities from its own account to a customer. These sales as
principals to a customer take place at the best ask price plus a commission
equivalent to markup.
Matched Transaction
A check is carried out on the
computer to find out whether purchases and sales as reported by the members
match. The transactions, thus compared are called matched transactions.
Maturity (Date)
The date on which a loan, bond,
or debenture becomes due for payment.
Maturity Value
The amount an investor receives
when a security is redeemed at maturity not including any periodic interest
payments. The value usually equals the par value although on zero coupon,
compound interest and multiplier bonds, the principal amount of the security at
issuance plus the accumulated investment return on the security is included.
Merchant Banker
Any person who is engaged in the
business of issue management either by making arrangement regarding selling,
buying or subscribing to securities or acting as manager, consultant, adviser
or rendering corporate advisory service in relation to such issue management.
Merger
The non-hostile and voluntary
union of two companies.
MIBOR
Mumbai Interbank Bid and Offer
rates. Calculated by the average of the interbank offer rates based on
quotations at nearly 30 major banks.
Microcap fraud
Microcap fraud typically takes
one of the two forms. The first – the pump and dump scheme – often involves
fraudulent sales practices, including pressure tactics from boiler room
operations where a small army of sales personnel could call potential investors
using scrips to induce them to purchase house stocks - stocks in which the firm
makes a market or has large inventory. The information conveyed to investors
often is at best exaggerated and at worst completely fabricated. Increasingly
these stocks are being touted on the internet by unregistered promoters. The
promoters of these companies, and often company insiders, typically hold large
amounts of stock and make substantial profits when the stock price rises
following intense promotional efforts. Once the price rises, insider and
brokers sell, realizing their profits. Second as part of pump and dump, unscrupulous
brokers often employ a variety of fraudulent sales practices including bait and
switch tactics, unauthorized trading, no net sales policies and churning.
Money laundering
Process of converting the
proceeds of illegal activities – disclosure of which would trigger financial
losses or criminal prosecution – into real or financial assets whose origins
remain effectively hidden from law enforcement officials and from society in
general.
Money Market
The market encompassing the trading and issuance of
short-term non-equity debt instruments, including treasury bills, commercial
paper, bankers’ acceptance, certificates of deposits etc. The market may be
local or international.
Money market mutual funds
Schemes investing exclusively in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and
inter-bank call money, government securities, etc.
Mortgage backed securities
Securities backed by mortgage
loans, including pass-through securities, modified pass-through securities,
mortgage-backed bonds, and mortgage pay-through securities.
Mortgage Trust
Unit trust which invests in
mortgage loans. Effectively the unit trust invests money in real estate and
receives an interest return with security over the property which has been
purchased. The interest which is charged on mortgage trust loans is normally
higher than that other sources of finance like banks so that the investor
usually receives a very competitive rate or return.
Moral Hazard
The risk that a party to a
transaction has not entered into a contract in good faith has provided
misleading information about its assets, liabilities or credit capacity or has
an incentive to take unusual risks in a desperate attempt to avoid losses.
Moving Average
The
average of security or commodity prices over a period of few days or up to
several years showing the trends up to the last interval. Each time the average
is taken , the oldest price is dropped and the latest price is added. Thus the
average is moving one.
Multilateral netting
Multilateral netting is an
arrangement among three or more parties to net their obligations. In settlement
systems of this type transfers are irrevocable, but are only final after the
completion of end-of-daysettlement.
Mutual Funds /Unit Trusts
Mutual Fund is a mechanism for
pooling the resources by issuing units to the investors and investing funds in
securities in accordance with objectives as disclosed in offer document. A fund
established in the form of a trust to raise monies through the sale of units to
the public or a section of the public under one or more schemes for investing
in securities, including money market instruments.
