M0 Cash in circulation. Only used by the UK .
Cash in circulation plus demand deposits at commercial
banks. There are variations between the precise definitions
used by national financial authorities.
M2 Includes demand deposits, time deposits and money market
mutual funds excluding large CDs.
M3 In the UK , it is M1 plus public and private sector time
deposits and sight deposits held by the public sector.
M4 In the US , it is M2 plus negotiable CDs.
The minimum margin which an investor must keep on
deposit in a margin account at all times in regards to each
Make a Market
A dealer is said to make a market when he quotes both the
bid and offer prices at which he stands ready to buy and
When the monetary authorities intervene regularly in the
market to stabilize the rates or to push the exchange rate in
a required direction. It is also called the "dirty float", as in
Collateral that the holder of a position in securities,
options, Forex or futures contracts, has to deposit to cover
the credit risk of his counterparty. Other definitions to
MARGIN, used in other areas are: (1) Difference between
the buying and selling rates, also used to indicate the
discount or premium between spot or forward. (2) For
options, the sum required as collateral from the writer of
an option. (3) For futures, a deposit made to the clearing
house on establishing a futures position account. (4) The
percentage reserve required by the US Federal Reserve to
make an initial credit transaction.
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A demand for additional funds to cover positions. A demand
for additional funds to be deposited in a margin account to
meet margin requirements because of adverse future price
The possibility that a customer goes bankrupt after entering
into a forward contract. In such an event, the issuer must
close the commitment, running the risk of having to pay the
marginal movement on the contract.
The profits and/or losses are tallied at the end of the
session according to the closing prices of the security, and
the account is "marked to the market" daily. The party will
be called upon to make good the losses if there has been an
adverse movement in the prices, and it can book the profits
in the event there has been a favorable movement in the
Mark Up Premium.
Market Amount The minimum amount conventionally dealt for between
Market Maker A market maker is a person or firm authorized to create and
maintain a market in an instrument.
Market Order An order to buy or sell a financial instrument immediately
at the best possible price.
Market value of a Forex position at any time is the amount
of the domestic currency that could be purchased at the
then market rate in exchange for the amount of foreign
currency to be delivered under the Forex Contract.
MATIF Marche a Terme International de France.
Maturity Date for settlement of the transaction which is decided at
the time of entering into the contract.
(1) The last trading day of a futures contract. (2) Date on
which a bond matures, at which time the face value will be
returned to the purchaser. Sometimes the maturity date is
not one specified date, but a range of dates during which
the bond may be repaid.
The study of economic activity as it applies to individual
firms or well defined small groups of individuals or
Mid Office The control of the trading activity including position
Mid-Price or Middle Rate
The price half-way between the two prices, or the average
of both buying and selling prices offered by the market
Milliard European term for 1,000 million.
Mine Expression used to indicate that the contacting party is
willing to buy at the rate offered by the quoting bank.
The smallest increment of market price movement possible
in a given futures contract.
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Reserves required to be deposited at central banks by
commercial banks and other financial institutions,
sometimes referred to as Registered Reserves.
MITI Japanese ministry of International Trade & Industry.
MM Money Markets.
Money Market A market consisting of financial institutions and dealers in
money or in credit, who wish to either borrow or lend.
Money Market Operations Comprises the acceptance and re-lending of deposits on the
The amount of money in the economy, which can be
measured in a number of ways. In India there are four
measures of money supply i.e. M1, M2, M3, M4.
Moving Average A way of smoothing a set of data, widely used in price time
Multiple Exchange Rates Different exchange rates for different types of transaction.
The South African Rand is an example.
Mutual Fund An open-end investment company. Equivalent to unit trust.
Nearby Month The nearest actively traded delivery month, a.k.a. current
delivery month, lead month.
Net Position The number of futures contracts bought or sold which have
not yet been offset by opposite transactions.
Nickel US term for five basis points.
A foreign currency current account maintained with another
bank. The account is used to receive and pay currency
assets and liabilities denominated in the currency of the
country in which the bank is resident.
Not Held Basis Order
An order whereby the price may trade through or better
than the client's desired level, but the principal is not held
responsible if the order is not executed.
Note A financial instrument consisting of a promise to pay rather
than an order to pay, or a certificate of indebtedness.