Making a Market: Any specialist permitted to act as a dealer, any dealer acting in the capacity of a block positioner, and any dealer who, with respect to a security, holds himself/herself out (by entering quotations in an interdealer communications system) or otherwise as being willing to buy and sell a security for his/her own account on a regular or continuous basis.
Margin: The difference between the collateral pledged to secure a loan and the amount of the loan itself. Federal Reserve Board requirements for margin on stocks have ranged from 40 to 100 percent of the purchase price. Marketability: The ease with which a security can be sold in the secondary market.
Market Order: An order to buy or sell securities at the market’s prevailing bid or asked price.
Market Value: The price at which a security is currently being sold in the market.
Market vs. Quote: Quote designates the current bid and asked price on a security, as opposed to the price at which the last security order was sold. Maturity: The date that the principal or stated value of a debt instrument becomes due and payable. Also used to denote the length of time between the issue date and the due date.
Money Market Instruments: Private and government obligations with maturities of one year or less.
Money Market Securities: Short-term securities with market prices more closely tied to the current interest rate than to a company’s standing or to general business conditions.
Moral Obligation Bond: A revenue bond that, in addition to its primary source of security, possesses a structure whereby a state pledges to make up shortfalls in a debt service reserve fund, subject to legislative appropriation. The state has no legal obligation to make such a payment, but market participants recognize that failure to honor the “moral” pledge would have negative consequences for the state’s own creditworthiness.
Mortgage Bond: A bond secured by a mortgage on property. The value of the property used as collateral usually exceeds that of the mortgage bond issued against it.
Municipals: Securities, usually bonds, issued by a state or its agencies. The interest on “munis” is usually exempt from federal income taxes and state and local income taxes in the state of issuance. Municipal securities may or may not be backed by the issuing agency’s taxation powers.
Municipal Securities Rulemaking Board (MSRB): Registered under the Maloney Act in 1975, MSRB is designed to create rules and regulations for municipal bond trading among brokers, dealers, and banks.