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Investing Glossary - N

    Narrow-Based Index (NBI)

    Narrow-Based Index (NBI) - Narrow-Based Index (NBI) is a futures contract on small group of stocks, under ten, in a specified industry sector, such as airlines, pharmaceuticals, semiconductors, or energy. Only in recently legalized in the United States, a futures contract with one stock, basket of stocks, or Narrow-based Index (NBI) as the underlying security. SSF trades in one hundred share blocks. The shareholder gives up the rights and dividends that come with stock ownership, but gains a number of significant advantages. SSF sold short without any of the restrictions of the short-sale rule; margin buying on a 20% basis....

    Narrowing The Spread

    Narrowing the Spread - Narrowing the Spread is the act of reducing the gap between the highest price a buyer of a security or other asset is willing to pay and the lowest price a vendor is willing to offer. The divide narrows when a potential buyer offers a higher price and a potential seller offers a lower price. As the allotment continues to narrow, the security becomes more liquid. It is the spread between the bid and asked prices of a security as a result of bidding and offering by market makers and specialists in a security. The lowest...

    NASDAQ 100

    NASDAQ-100 - NASDAQ-100 is an investment Tracking Stock and should be made with an understanding that the Trust will not be able to replicate exactly the performance of the Index because the total return generated by the securities held in the Trust will be reduced by transaction costs incurred in adjusting the actual balance of the securities and other Trust expenses, whereas such transaction costs and expenses are not included in the calculation of the Index. It is also viable that for short periods of time, the Trust may not fully replicate the performance of the Index due to the...

    NASDAQ

    Definition: The NASDAQ is a modern stock exchange that consists of a highly computerized system that allows buyers and sellers of stocks to be paired together automatically.  Unlike the New York Stock Exchange, there aren't floor brokers here. TeenAnalyst Advice: The NADAQ is a completely electronic stock exchange.  If you visited the NYSE, you'd see lots of people running around executing trades.  But at the NASDAQ, you would just see an extensive computer center.The NASDAQ is overseen by its independent self-regulating organization, the NASD (National Association of Securities Dealers).NASDAQ stands for "National Association of Securities Dealers Automated Quotation."  That's a mouthful!  ...

    NASDAQ Small Cap Market

    NASDAQ Small Cap Market - Nasdaq Small Cap Market helps market participants by clarifying that issuers of wide range of capitalization sizes may list on this market. The new name reflects the true purpose of this market tier. The NASDAQ Capital Market supplies companies with needed capital to grow their businesses and a listing venue which can accommodate the different stages in their corporate life. NASDAQ consists of two divergent market tiers, the NASDAQ National Market and the NASDAQ Capital Market. The NASDAQ Capital Market exists for securities o smaller, less-capitalized companies, small caps that do not qualify for inclusion...

    National Association of Securities Dealers Automated Quotations System

    National Association of Securities Dealers Automated Quotations System - National Association of Securities Dealers Automated Quotations System is a computerized system established by the NASD to facilitate the trading by providing broker and dealers with current bids and asking price quotes on over-the-counter stocks and some listed stocks. Unlike the AMEX and the NYSE, the NASDAQ does not have the physical trading floor that brings together the buyers and sellers. Instead, all trading on the NASDAQ exchange is over a network of computers and telephones. The NASDAQ does not employ market specialists to buy unfilled orders as the NYSE does....

    National Best Bid and Offer

    National Best Bid and Offer - National Best Bid and Offer is the Security and Exchange Commission rule that requires the brokers to guarantee that the customers receive the best prevailing ask price when they purchase the securities and the best prevailing bid price when they sell securities. This incorporates prices from all competing market centers, exchanges, and refers to the price at the time of entry into the market. The National Best Bid and Offer (NBBO) is the bid and ask the average person will see. Day traders using Level two market maker screens see all the bids and...

    National Market System

    National Market System - National Market System is the over-the-counter-trading. The structure of trading OTC stocks under the sponsorship of the NASD. The NASD meets certain criteria for size, profitability, and trading activity. More wide-ranging information is available for NMS stocks than for non-NMS stocks traded OTC, high, low, and last-sale prices, cumulative volume figures, and bid and ask quotations throughout the day. This is due to the fact that market makers report price and number of shares in each transaction within ninety seconds verses non-real-time reporting for non-NMS stocks. A national market system has been optimistic by the SEC...

    National Stock Exchange (NSX)

    National Stock Exchange (NSX) - National Stock Exchange (NSX) is an electronic stock exchange, provides exchange services. The company's services include the quote dissemination, the trade execution, and the trade reporting. It participates in the national market system plans for the exchange, listed securities, and OTC securities, as well as in the trading system. The company's national securities trading system automatically performs the various functions of an auction market, provides trading system, and enables its members to interact electronically with other stock exchanges. The company founded 1885 under the name Cincinnati Stock Exchange and changed its name in 2003. This...

    National Stock Exchange of India (NSE)

    National Stock Exchange of India (NSE) - National Stock Exchange of India (NSE) - is located in Bombay, is India's first debt market. It was set up in 1993 to encourage the stock exchange reform through system modernization and competition. It commenced for trading in mid-1994. It accorded recognition as a stock exchange by the Department of Company Affairs. The instruments, traded, treasury bills, government security, and bonds issued by public sector companies. The National Stock Exchange of India Limited has birth in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended elevation...

    Natural Monopoly

    Natural Monopoly – High-fix, start-up costs often lead to natural monopoly in industry and markets. Especially if talking of a new industry or being an inventor (lone/sole), of a new product. All of these factors can undermine consumers getting the deals they deserve, higher pricing, gouging etc. A natural monopoly like these are however naturally occurring, almost by default, not orchestrated or designed, usual, expected. It translates into a sort of organic domination and control of a singular company or entity supplying, making and distributing  irreplaceable products, goods or services, with no competitors.  Changes, market manipulating, pricing/costing, setting fees, lack...

    Net Asset Value (NAV)

    Definition: When talking about mutual funds, the net asset value (NAV) is the total value of the fund's holdings per share.  This number is calculated daily after the market's close.  A mutual fund with a NAV of $25.50 means it'd cost $25.50 for one share of that fund. TeenAnalyst Advice: The Net Asset Value is a lot like a stock price.  It's the price of one share of the mutual fund.  Mutual funds allow you to buy partial shares.  So if you invest $100 in a fund with a NAV of $30, you'd get 3.333 shares.To calculate how much a mutual...

    Neglected Firm Effect

    Neglected Firm Effect - The analysis and analysts at work oftentimes forget, overlook, underestimate or not know of a smaller firm typically that might be doing very well, profits-earnings, performance metrics good, but no-one is looking, causing a ‘gap’. This occurrence and experience recognized as lesser-known firms showing major gains, or suspiciously/non-normal positive profits or returns on their stocks, are quite common....

    Negotiable Security

    Negotiable Security - Negotiable Security is any equity or debt instrument that readily salable and converted into cash, or exchanged with ease. Stocks, bonds, short-term commercial paper, and certificates of deposit are all considered marketable securities because there is a public demand for them and because they readily convert into cash. Whereas, shares in private corporations are illiquid, marketable securities convert into cash with great ease. Certificates of IBM and government bonds are excellent examples of marketable securities. Marketable securities provide investors with the liquidity of cash and the ability to earn a return when the assets sell. It is...

    Net Cash Flow

    Net Cash Flow - Net Cash Flow is the heart of the economic business case, and the basis for deriving other financial metrics. Cash flow, like income, spotlights on the difference between incoming funds and the money going out over a time. Cash flow results however, include some items found in the income statement, such as depreciation expense. Depreciation expense, for example, represents an actual cash payment during the reporting period, but rather an accounting charge against earnings. As a result, depreciation expense is not a cash outflow in reality. The income statement tells stockholders and taxing authorities what the...

    Net Unrealized Appreciation

    Net Unrealized Appreciation - Net Unrealized Appreciation is the largest transfer of wealth in the history of our country. Baby Boomers are self-effacing, and many have accumulated very large 401(K) or other qualified plans. For some, a large proportion of their plan consists of highly appreciated individual company stock. The tax savings you can generate for your clients using the net unrealized appreciation (NUA) technique can make a significant impact on their financial and the estate planning. Regrettably, many retirees and advisors make a fundamental mistake. They roll the competent plan, rich in employer stock, into an IRA. Often retirees...

    Net Worth

    Definition:  The net worth is the value of a company or person.  It can be figured by subtracting liabilities from assets. TeenAnalyst Advice: This is simply a way of calculating how much a person has.  It's considered their "liquidation" value.  This means that if they sold all of their assets and repaid their liabilities, this is the amount they'd have left over.Net worth can be deceptive because, for companies, the value of an asset is carried at its book value (the price paid).  So if the asset becomes more valuable, the net worth also increases.  But you can't tell that simply...

    New Money Preferred

    New Money Preferred - New Money Preferred is preferred stock, issued after October 1, 1942, when the tax exclusion for corporate investors receiving preferred stock dividends raised from sixty percent to eighty five percent to equal the exclusion on common stock dividends. The change benefited financial institutions, such as insurance companies, which are limited in the amount of common stocks they can hold, typically five percent of assets. New money preferred offer an opportunity to gain tax advantages to bond investments, which have fully taxable interest. The corporate tax exclusion on dividends is currently seventy percent. Certain tax breaks go...

    New Zealand Exchange Limited (NZX)

    New Zealand Exchange Limited (NZX) - The New Zealand Exchange Limited (NZX) began life as a regional stock exchange during the Gold Rush of the 1870's. In 1974 these regional exchanges formed one national stock exchange, the New Zealand Stock Exchange (NZSE). On June 24, 1991, NZSE implemented a computerized trading system, and abolished the open outcry market. This computerized system replaced with the FASTER trading system in September 1999. On October 16, 2002 the Member Firms of the New Zealand Stock Exchange voted in favor of demutualization. On December 31, 2002, NZSE became a limited liability company. On May...

    Nifty Fifty

    Nifty Fifty - Nifty Fifty is the informal term used to refer to the fifty popular large cap stocks on the New York Stock Exchange in the 1960's and 1970's that were widely regarded as solid buy and hold growth stocks. The fifty credit with the propelling the bull market of the early 1970's. The Nifty Fifty are still solid performers, although a few are now defunct or otherwise worthless. The stocks, described as one decision, as they viewed as extremely stable, even over long periods of time. The most common characteristics by the constituents were solid earnings growth and...

    Nikkei

    Definition: The Nikkei is the leading stock index in Japan.  It's published by the Nihon Keizai Shimbun-Sha publishing company. TeenAnalyst Advice: Because the markets in Japan open before they do here in the United States, many investors look at the Nikkei to gauge how the overall ...

    Nikkei Stock Average

    Nikkei Stock Average - Nikkei Stock Average is applicable mainly to international equities. Priced-weighted average of two hundred twenty five stocks of first section of the Tokyo Stock Exchange started on May 16, 1949. It is the Japanese equivalent of the United States Dow. A price-weighted average of the stock of two hundred twenty five large companies listed in the First Section of the Tokyo Stock Exchange. The Nikkei Stock Average is the most extensively quoted average of Japanese equities. The Nikkei Stock Average, calls the Nikkei Index or simply the Nikkei, is a price-weighted index of two hundred twenty...

    No-Load Stock

    No-load Stock - No-load Stock is the shares available for the Direct Purchase from the issuing companies, thus avoiding the brokers and the sales commissions. Such shares offered as part of a company's Dividend Reinvestment Plan to encourage long-term investment. Prices based on an average of recent market prices and may be as low as the current market price. Broker commissions payable when the shares sell. Investor's money continues to pour into the behemoths of the fund world, so we decided to take a hard look at the twenty no-load stock funds to determine which still are attractive and which...

    No Load

    No Load – The tem no-load simply means that the security has no sales charge affiliated with the mutual fund. A no-load mutual fund  will not have any fee attached such as a brokerage fee . For selling buying trading, or servicing the fund.  A no-load fund is the opposite of a load fund...which pay commissions on sales and charger service fees a no-load fund is free from any type of fee that is usually charged for the sale, or purchase of most funds within the stock market, either public or private...

    No Load Fund

    No Load Fund - a no load fund is a mutual fund that has no sales charges attached to it. In other words a no load fund had no commission sales charges passed on to the holder. It’s the opposite of a load fund which charges a fee for selling and even purchasing a fund, depending on the share class assigned to it...(A, B,C ,or D)  A no load fund has virtually no fees attached to the fund either at the time of purchase or when redeeming the shares at net asset value...

    Nominal Capital

    Nominal Capital - Nominal Capital is maximum value of the securities that a firm can legally issue. This number specified in the memorandum of association, or articles of incorporation in the United States, when a firm is incorporated, but it changes later with the shareholders approval. Authorized share capital divided into Issue Capital. The par value of the shares actually issued. It pays up capital, money received from the shareholders in exchange for shares. It is uncalled capital, money remaining unpaid by the shareholder for the shares of stock they purchased. It called an authorized capital, authorized stock, nominal capital,...

    Nominal Value

    Nominal Value - Nominal Value is the apparent worth or the known nominal value shown on the principal, the face, and the side, of a bill of exchange, currency, security, stock, share, bond, or the other type of financial instruments. The par value of a loan stock, bond, preferred stock, preference share, is the value at which it will redeem. Some jurisdictions allow the shares to issue with no par value factor. Par value is classically different from the market price. If the market price is higher than the par value, the difference is the premium. The lower the difference...

    Non-Callable

    Non-Callable - Non-Callable is the bond or the preferred stock, preference share, redeemed by the issuer before its maturity date, or a date specified in the bond indenture or share prospectus, only on the payment of a penalty. Such call fortifications safeguards the holder from loss of interest income caused by early redemption. The bonds are non-callable for the first few years after issued. The United States Treasury is the most common issuer of non-callable bonds. Business bonds usually have some type of call option, except during periods of low interest rates when there is little incentive for a company...

    Non-Cumulative Preferred

    Non-Cumulative Preferred - Non-Cumulative Preferred is preferred stock that no pay to the holder of any unpaid, or omitted dividends. If the corporation chooses no pay dividends in a given year, the investor is to claim any of those forgone dividends in the future is lost. In the case the preferred shares are cumulative; shareholders are entitled to any omitted dividends. For example, let us assume ABC Company chooses no pay $1.10 annual dividend to cumulative preferred stockholders. In this case, the shareholders do not receive the dividends this year, but...

    Non-Depository Financial Institution

    Non-Depository Financial Institution - Non-Depository Financial Institution is the Government or the private organizations, such as building society, insurance company, investment trust, or mutual fund, or unit the trust serving as an intermediary between the savers and borrowers, but not accepting time deposits. Such institutions fund their lending activities either y selling securities, bonds, notes, stocks and shares, or insurance policies to the public. Their liabilities, depending on the liquidity of the liability, may fall under one or more money supply definitions, or classified as near money. It is the financial institution that funds their investment activities from the sale...

    Non-Profit Organization

    Non-Profit Organization - A non-profit (not-for-profit), is an organization typically having a lofty ideology, goals and direction/purpose or cause. Profit is not the main, key or motivator at all. Serving public interest or private sector activities, think-tanks, eco-advocating bodies, often with tax-exempt status, for benefiting and improving society, more effectively than through the typical business channels. Another example will be community service organization, surplus generating charities, where all profits are geared and directed, earmarked to reinvestment back into the business or the community, rather than compensation and bonuses for managers and executives.  Public donations, foundations, investment portfolios, endowments, inheritances, legacy...

    Non-Public Information

    Non-Public Information - Non-Public Information is the information that an employee gains by reason of Federal employment that he knows or reasonably should know is available to the general public. The information contained in a Privacy Act system of records which an individual knew or should have known. It is normally exempt from disclosure under Exemptions six or seven of the Freedom of Information Act, or protected from disclosure by statue. This is vital to the general public and is unauthorized to make available to the public upon request. The individual who willfully discloses information or records from any file...

    Non-Residential Alien Tax

    Non-Residential Alien Tax – a non –resident alien tax is a government tax of a person, not of this country, income or assets. The non –resident alien tax is divided into two categories.  .effectively connected, and none effectively connected.  Effectively connected income is taxed at a graduated rate, just as resident US citizens are. Taxed.  None effectively connected income is taxed at a flat rate of 30 percent (or lower treaty rate), and the non residents are not allowed any deductions on none effectively connected income.  Non effectively connected is also known as “fixed determinable, annual or periodical (FDAP)...

    Non-Voting Stock

    Non-Voting Stock - Non-Voting Stock is stock issues that provide the stockholder very little or no vote on corporate matters, such as election of the board of directors or mergers. This type of stock share implemented for individuals who want to invest in the corporation's profitability and success at the expense o voting rights in the direction of the company. Preferred stock habitually has nonvoting qualities. Few corporations offer voting stock and non-voting stock, nor do all stocks usually have equal voting power. Non-voting stock shares thwart hostile takeover attempts. The founders of a corporation maintain all voting stock and...

    Nonstock Corporation

    Nonstock Corporation - Nonstock Corporation is a company created to behave, as nominal owner of some property might not need to have stock shares, because the directors or members would have been co-owners. For example, owning a safe deposit box in a corporate name, if the corporation is non-stock, the directors of the company are not in ownership. Thus they have no personal ownership of the shares of stock of the company, and as the safe deposit is in a corporate name, not listed as belonging to the corporate leadership. The members of a no -stock company are not entitled...

    Normal Investment Practice

    Normal Investment Practice - Normal Investment Practice is the history of investment in a customer account with a member of the National Association of Securities Dealers as defined in their rules and regulations of fair practice. It is a method to experiment the bona fide public offerings requirement applying to the allocation of a hot issue. If the buying patron has a history of purchasing similar amounts in normal circumstances, the sale qualifies as a bona fide public offering and is not in violation of the Rules of Fair Practice. A quota of buying only hot issues is not acceptable...

    Normal Market Size

    Normal Market Size - Normal Market Size is buying or selling in amounts above set numeration of stock shares required price negotiation with the market or maker. It is the system reducing the effect a market investor's trading activity may have on the share price of a stock that has shares outstanding in the low thousands. When stock shares traded, the market makers have to quote a bid price and offer price at which they will negotiate. However, the prices they quote honored up to a certain estimate of order. A percentage of the stock shares average daily turn around...

    Note

    Definition: A note is a liability that typically matures anywhere between one and ten years. TeenAnalyst Advice: People often call treasury debt that matures in less than 10 years a "bond."  But it's actually really called a note.  A treasury bond matures in 10-30 years.  And a treasury bill is one that matures in less than a year.  ...

    Not Rated

    Not Rated - Not Rated is a utilized rating service indicator with readings not reflecting a positive or a negative reading. It shows the realities of a security or a company or a corporation that is not yet been rated. It is the direct relationship to a stock issue of a fixed-income security not rated by an agency, any agency, such as the institution of Standard & Poor rating system for issued trading stocks. The fact of an issue of stock not rated does not mean the stock securities are of a risky nature on the trading floor. It is...

    New York Stock Exchange (NYSE)

    Definition: An age-old stock exchange where floor traders buy and sell large volumes of stock. TeenAnalyst Advice: The New York Stock Exchange is the oldest stock exchange in the country.  It's also the most selective in terms of what stocks can be listed on it.People are always arguing that the NASDAQ is a better exchange because everything is done electronically.  But what most people don't realize is that the NYSE is also highly automated.  Floor traders only execute large trades.Why have a person execute a trade?  Because they can ensure you get the best price!  ...

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    Daily Definition

    Definition of the Day Nominal Value

    Nominal Value - Nominal Value is the apparent worth or the known nominal value shown on the principal, the face, and the side, of a bill of exchange, currency, security, stock, share, bond, or the other type of financial instruments. The par value of a loan stock, bond, preferred stock,...

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