Majority shareholder - Person or organization that holds and controls more than 50% of the outstanding shares of a corporation. A person or operating entity with a majority stake in the business has enormous power, especially if their shares have voting rights. The ability to vote on certain corporate issues, such as who should serve on the company's board of directors, is granted to shareholders who hold voting shares.
Management fee - The sum that a mutual fund pays an investment advisor in exchange for their services.
Margin - Margin is the collateral that a trader or investor must deposit with their broker or exchange to cover the credit risk the trader or investor poses for them. By borrowing cash from their broker to pay for securities, borrowing securities to engage in short-selling transaction, or participating in a derivative contract, an investor can expose themselves to credit risk.
Margin call - An investor's margin account receives a margin call when its value drops below the limit set by the broker. Securities purchased using borrowed funds—typically a mix of the investor's own cash and funds borrowed from the investor's broker—are held in the margin account of an investor. An investor who receives a margin call from their broker is required to add more funds or securities to their account in order to bring it up to the maintenance margin, which is the minimum value that must be maintained in order to avoid a loss. When a margin call happens, the investor has two options: either add funds or marginable securities to the account, or sell part of their existing holdings.
Market cycles - Trends or patterns that arise in various types markets, indices, and economic and business environments. Some equities or asset classes do better than others during a cycle because their business strategies are compatible with favorable growth circumstances. Market cycles, which show a fund's performance in both up and down markets, are the interval between two recent highs or lows of a common benchmark, such as the S&P 500, the Nasdaq 100, the Dow Jones Industrial and the Russell 2000.
Market capitalization - The market capitalization of a firm is the sum of the dollar values of its outstanding shares of stock. The size of a corporation is determined by this number rather than revenue or total assets, according to the investment community. Market capitalization is used in acquisitions to assess if a takeover candidate offers a good value to the acquirer or not.
Market depth - Market depth describes a market's capacity to accommodate reasonably sizable market orders without materially affecting the security's price. Market depth relates to trading within a single securities and takes into account the total volume and breadth of open orders, bids, and offers. The depth of the market is typically correlated with the number of buy and sell orders, assuming that these orders are distributed reasonably evenly around the security's current market price.
Market dynamics - Market dynamics are forces that have an effect on prices, producers and consumer behavior. These factors influence the supply and demand for a particular good or service in a market, which creates pricing signals. Any sector or government policy can be impacted by market dynamics. In addition to pricing, demand, and supply, there are other market dynamics. The main one is human emotions of fear and greed, and the decision-making process that arise from those emotions.
Market index - A market index is a notional group of investment holdings that symbolizes a certain area of the financial market. The prices of the underlying holdings are used to calculate the index value. Some indices are valued according to market capitalization, revenue, float, and fundamental weighting. Weighting is a technique utilized for modifying the relative importance of each item in an index.
Market indicators - Market indicators are quantitative in nature and aim to forecast market movements by interpreting stock or financial index data. Market indicators are a subgroup of technical indicators. Investors and traders utilize those indicators to help analyze the market and support their investing decisions.
Market maker - A company or individual that actively quote two-sided markets in a given securities by giving asks and bids as well as the market size for each. Market makers contribute liquidity and depth to markets and make money on the spread between bid and ask prices. They could also execute main trades, or trades for their own accounts.
Market-on-close (MOC) - Non-limit market orders that traders execute as closely as possible to the closing price—either precisely at or just after the market close. Obtaining the final price of that trading day is the goal of a MOC order. MOC orders are not offered by all brokers or in all markets. Traders must place a MOC order by 3:45 p.m. EST on the New York Stock Exchange (NYSE) and by 3:50 p.m. EST on the Nasdaq, as both exchanges close at 4:00 p.m. EST. Both exchanges prohibit traders from changing or canceling MOC orders after those specified times.
Market order - A market order is an instruction by an investor to a broker to buy or sell stock shares, bonds, or other assets at the best available price in the current financial market.
Market price - The price at which a good or service can currently be purchased or sold. The forces of supply and demand decide how much an asset or service will cost on the market. The market price is the cost at which the quantity supplied and the amount demanded are equal. Consumer and economic surplus are determined using the market price. Customer surplus is the difference between the highest price a consumer is willing to pay and the actual amount they pay for the product: the actual market price. Producer surplus, commonly known as profit, is the sum from which producers profit from their sales at the market.
Market research - The practice of evaluating the viability of a new service or product through study done directly with potential customers. Market research, often known as marketing research, enables a business to identify the target market and obtain consumer comments and other input regarding their interest in the good or service.
Market risk - The potential for an investment to fall to meet its target.
Market segmentation - Market segmentation is a marketing phrase that refers to grouping potential customers into segments or groups based on their shared needs and how they react to marketing actions. Market segmentation helps businesses to target various consumer demographics who view the entire value of particular goods and services in a variety of ways.
Market sentiment - Market sentiment describes how generally investors feel about a specific security or financial market. It is the mood or tenor of a market, or the psychology of the public, as seen in the activity and fluctuation of the prices of the securities traded in that market. In general, rising prices are influenced by bullish market sentiments, whereas declining prices are influenced by bearish market sentiments.
Market share - A company's market share is the percentage of total revenues in an industry that it generates. Market share is derived by dividing the company's total sales over the period by the industry's total sales over the same period. This metric is employed to provide a basic understanding of a company's size in relation to its market and competitors. The business with the biggest market share in a certain sector is the market leader in that sector.
Market timing - A risky investing plan that involves buying and selling securities in anticipation of market circumstances.
Maturity - The date mentioned in a note or bond as the date when the debt becomes due and payable.
Maturity distribution - The allocation of a portfolio's assets according to when the investments will mature.
McClellan Oscillator - The McClellan Oscillator measures market breadth by comparing the proportion of advancing and declining issues on stock exchanges like the New York Stock Exchange (NYSE) or the NASDAQ. The indicator is designed to highlight broad thrusts, or significant changes in index sentiment. Additionally, it aids in analyzing an index trend's strength using divergence or confirmation.
Mean reversion - Mean reversion, often known as reversion to the mean, is a financial theory that says that historical returns and asset price volatility will eventually return to the long-run average level of the entire dataset.
Median market cap - The point at which half of the equities in a portfolio have a bigger market capitalization than the other half (market price times the number of shares outstanding).
Merger - A merger is an arrangement that combines two current businesses into a single new business. There are various merger types, and businesses merge for a variety of reasons. Mergers and acquisitions (M&A) are frequently carried out to broaden a company's clientele, enter new markets, or increase market share. The goal of all of these actions is to raise shareholder value. In order to stop other companies from buying or merging, companies frequently adopt a no-shop provision during a merger.
Micro-cap - A publicly traded corporation in the United States with a market capitalization of between $50 million and $300 million. Market capitalization is higher for micro-cap companies than nano-caps, but lower for small-, mid-, large-, and mega-cap companies. It's important to note here that the stock price of a company does not necessarily increase because it has a larger market capitalization compared to a company with a lesser market capitalization.
Mid-cap - Corporations with a market valuation (capitalization) between $2 and $10 billion are referred to as mid-cap (or mid-capitalization) companies. A mid-cap corporation, as its name suggests, is in between large-cap (or big-cap) and small-cap firms. Large-cap, mid-cap, and small-cap classifications are estimations of a company's current worth; as such, they may fluctuate over time.
Mid-cap fund - A mid-cap fund is a collective investment vehicle (such as a mutual fund or ETF) that specifically invests in the equities of mid-cap companies, or those with market capitalizations between roughly $2 billion and $10 billion.
Mining (Bitcoin) - The method through which new bitcoins are placed into circulation is known as bitcoin mining. It is an essential part of the construction and maintenance of the blockchain ledger and is also how the network confirms new transactions. The process of mining involves employing advanced hardware to tackle a very challenging computational arithmetic problem. The next block of bitcoins is distributed to the first computer to solve the issue, and the cycle repeats.
Momentum - Momentum is the rate of acceleration—or, more specifically, the pace of change—of the price of a security. Using momentum to enter a trend as it is developing is the goal of the momentum traders. Simply explained, momentum is the tendency of a price trend to continue growing or dropping for a specific period of time while typically accounting for both price and volume data. Momentum is frequently assessed in technical analysis using oscillators to identify trends.
Momentum investing - A method known as momentum investing looks to profit from the continuation of an existing market trend. Investors use this trading method to purchase stocks that are already rising and try to sell them when they appear to have reached their highs and are in extremely overbought conditions. In the world of markets, momentum is the ability of a price trend to continue for expended periods of time, with little to no pullback. Every small pullback in an opportunity for the bulls to take the price even higher.
Money market mutual fund - A short-term investment that invests in Treasury bills, CDs with maturities under one year, and other conservative investments in an effort to preserve principal while generating income.
Monetary policy - A country's central bank uses a set of instruments called monetary policy to regulate the total amount of money in circulation, foster economic expansion, and implement measures like adjusting interest rates and adjusting bank reserve requirements. The Federal Reserve Bank of the United States carries out monetary policy under a twin mandate to maximize employment while containing inflation.
Money flow - Technical indicator calculated by averaging the high, low, and closing prices, and multiply that average value by the daily volume. Traders can determine whether money flow was positive or negative for the current day by comparing that result to the number from the prior day. While negative money flow signifies that prices are expected to decline, positive money flow says that prices are likely to move higher.
Money Flow Index (MFI) - A technical oscillator called the Money Flow Index (MFI) analyzes price and volume information to spot overbought or oversold indications in an asset. It can also be used to identify divergences that signal a change in price trend. Oscillator movement ranges from 0 to 100. The Money Flow Index, in contrast to conventional oscillators like the Relative Strength Index (RSI), integrates both price and volume data rather than just price. Because of this, some analysts refer to MFI as the volume-weighted RSI.
Morning star candlestick - Bullish candlestick pattern made up of three candlesticks: a large red candle, a small green with a long lower shadow (the color of the candle can be either green or red), and a large green candle. A morning star develops at the end of downtrend and marks the beginning of a reversal. It indicates a change in the prior price trend. A drop in a price downtrend and the appearance of evening star patterns both indicate that the uptrend is about to end. The evening star pattern, which is seen as a bearish indication, is the opposite of the morning star pattern.
Morningstar ratings - Analysis system developed by Chicago-based Morningstar Inc. for assessing both open- and closed-end mutual funds and annuities. The rating method assigns funds one to five stars based on their risk-adjusted performance, where performance is defined as the fund's overall return.
Mosaic theory - Investigative technique used by security analysts to gather information and learn more about a specific company. According to the mosaic theory, an analyst must gather all relevant information—public, private, and non-material—about a firm in order to ascertain the true market value of its securities and to provide customers with recommendations based on that knowledge.
Moving average (MA) - Indicator frequently employed in technical analysis with the purpose of generating a price's moving average during a specific period of time. The indicator is made of a single line that displays a continuously updated average price value in order to assist smooth out the price data. Moving average indicators can be simple- and exponential- data driven. The formula for the simple moving average indicator takes into equal consideration the closing price values recorded during a specific period of time (21-days, 50-days...). The exponential version of the indicator does the same calculation as the simple version of the indicator. However the exponential moving average places more emphasis on the most recent price values, making those values more responsive and current to the new information.
Moving average convergence divergence (MACD) - A momentum trend-following indicator that displays the relationship between two moving averages of an asset's price. To calculate the moving average convergence divergence, the formula subtracts the 26-period exponential moving average (EMA) is subtracted from the 12-period EMA.
Multi-asset class - A multi-asset class, often referred to as a multiple-asset class or multi-asset fund, is an investment that combines different asset classes (such as cash, stocks, or bonds). Multiple asset classes are combined in a multi-asset class investment to form a collection or portfolio of assets. Based on the individual investors' preference for weights and types, the asset class would vary.
Multiple linear regression (MLR) - A statistical method known as multiple linear regression (MLR), usually referred to as multiple regression, employs a number of explanatory variables to forecast the results of a response variable. Multiple linear regression attempts to represent the linear relationship between the independent explanatory variables and the dependent response variables. Since multiple regression takes into account several explanatory variables, it can be thought of as an extension of ordinary least-squares (OLS) regression.
Municipal bonds - A municipal bond, sometimes referred to as munis or muni bonds, is a type of debt instrument issued by a state, municipality, or county to pay for capital projects like building roads, bridges, or schools. They can be compared to loans given to local governments by investors. Municipal bonds are particularly appealing to those in higher income tax brackets because they are frequently exempt from federal taxes and the majority of state and local taxes (for residents).
Mutual fund - Fund run by an investment firm that invests money raised from shareholders in stocks, bonds, options, commodities, or money market instruments.