Auction Market Preferred Stock

Auction Market Preferred Stock - Auction market preferred stocks, also known as AMPS, are a type of preferred stock that the Dutch auction resets the dividend rate on. Generally, this means the interest rate on the preferred stock has a cap, or a ceiling, and that the Dutch auction may reset the reset rate of the dividends every forty-nine days. It is similar to a floating-rate investment, similar to a mortgage with a floating interest rate, and is usually tied to an outside indicator of movement, such as the prime interest rate.