NASDAQ (U.S.)
Acronym for the National
Association of Security Dealers Automated Quotations. This is an organization
that does exactly what its name stands for. The system provides a computerized
information network through which brokers, banks and other investment
professionals can obtain upto the minute price quotations on securities traded
over the counter.
Naked Option
An option that is written without
corresponding security or option position as protection in seller’s account.
Narrowing the Spread
The action taken by broker
/dealer to narrow the spread between bids and offers by bidding higher or
offering lower than the previous bid or offer. Also called closing the market.
National best bid and offer
A term applying to the SEC
requirement that brokers must guarantee customers the best available ask price
when they buy securities and the best available bid price when they sell
securities.
Negotiated Dealing System (NDS)
Electronic platform for
facilitating dealing in Government Securities and Money Market Instruments,
introduced by RBI.
Net Dividend
Dividend after deduction of tax payable from gross dividend
Net Liquid Assets
Cash and readily marketable
securities minus current liabilities of a company. This is the strictest test
of a company’s ability to meet current debt obligations.
Netting
A system whereby outstanding financial contracts can be
settled at a net figure, i.e. receivables are offset against payables to reduce
the credit exposure to a counterparty and to minimize settlement risk.
Net Working Capital
The excess of current assets over
current liabilities.
Net worth
The aggregate value of the paid
up equity capital and free reserves (excluding reserves created out of
revaluation), reduced by the aggregate value of accumulated losses and deferred
expenditure not written off, including miscellaneous expenses not written of.
New Issue
Shares of a company offered to
the public, through a public issue, for the first time to be listed on the
Stock Exchange.
Net Asset Value (NAV)
The current market worth of a
mutual fund’s share. A fund’s net asset value is calculated by taking the
fund’s total assets, securities, cash and any accrued earnings, deducting
liabilities, and dividing the remainder by the number of units outstanding.
Net Option Value
The difference between long
option value (LOV) and short option value (SOV).
Net Realizable Value
The current market price of an
asset after deducting the costs of selling it.
Noise trading
People
who trade on noise are willing to trade even though from an objective point of
view they would be better off by not trading. Perhaps they think the noise they
are trading on is information or perhaps they just like to trade.
No-action Letter
A form of written advice given by
the staff of the SEC to lawyers. It is given in response to a request letter
and is limited to the facts of a particular proposed undertaking. Generally,
the advice concerns an ambiguity or apparently illogical result under the SEC
laws or rules. If the request is granted, the staff says that, based upon the
facts described, it (the staff) would not recommend that the Commission take
any action against the conduct described. In theory, grant of a no-action
letter does not foreclose private lawsuits or even prevent some action by the
Commission itself. However, in practice the letter generally would be given
great weight by a court.
Non deliverable swap
Similar to a non deliverable
forward, the only difference being that settlement for both parties is done
through a major currency.
Non Discriminatory Poison Pill
Anti-takeover defense plans which
do not penalize acquirers exceeding a given shareholding limit. Include
flip-over plans, preferred stock plans and ownership flip-in plans which permit
cash offers for all shares.
No load fund
A no-load fund is one that does
not charge for entry or exit. It means the investors can enter the fund/ scheme
at net asset value (NAV) and no additional charges are payable on purchase or
sale of units.
