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Glossary of financial terms - Letter M

  • MAC

    Tags:  concept electronic systems

    See  


  • Macaulay duration

    Tags:  bonds valuation and pricing

    The weighted average life of a bond. The greater its Macauley duration, the greater is the sensitivity of the bond price to changes in interest rates.

     


  • MAD

    Tags:  finance (general) regulation

    Territory:   European Union

    See  


  • maintenance margin

    Tags:  derivatives risk management

    The minimum level at which the equity in a futures account must be maintained. If the equity in an account falls below this level, a margin call will be issued, and funds must be added to bring the account back to the initial margin level.

     


  • major swap participant (MSP)

    Tags:  derivatives market participants status

    Major swap participant is a term defined in the Dodd-Frank Act to describe an entity that either holds a substantial position in swaps (excluding risk hedging positions) or creates substantial counterparty exposure.

     


  • management buyout (MBO)

    Tags:  concept corporate finance financing

    A management buyout is a leveraged buyout transaction where the acquisition si led by its existing management team.

     


  • mandated lead arranger (MLA)

    Tags:  banking system financing

    The mandated lead arranger is the leading bank in a syndicated loan that will arrange the line, commit to undertake the full amount of the credit and syndicate part of the loan to the other members of the syndicate.

     


  • mandatory matching field (MMF)

    Tags:  post-negotiation transaction settlement

    In T2S, mandatory matching fields are fields from a SWIFT message which must be present in the instruction and which values need to be the same in order for both instructions to match.

     


  • MAR

    Tags:  regulation texts of law

    Territory:   European Union

    See  


  • margin

    Tags:  derivatives risk management

    Margin in futures is a performance bond or "earnest money." Margin money is deposited by both buyers and sellers of futures contracts, as well as sellers of futures options.

     


  • margin call

    Tags:  market transactions risk management

    A call from the futures clearinghouse to a clearing member (variation margin call), or from a broker to a customer (maintenance margin call), to add funds to their margin account to cover an adverse price movement.

     


  • mark-to-market (MTM)

    Tags:  market transactions valuation and pricing

    The process of recalculating the value of financial instruments or open positions (often on a daily basis) given current market prices. The purpose is to determine the unrealised profit or loss for a certain period of time.

     


  • market-on-open order (MOO)

    Tags:  market orders order types

    Market order which bears the condition to be executed at the opening price determined during the opening of the trading session.

     


  • market-to-book ratio

    Tags:  fundamental analysis ratios

    See  


  • Market Abuse Directive (MAD)

    Tags:  regulation texts of law

    The Market Abuse Directive was a European regulatory framework for addressing situations in which investors had been unreasonably disadvantaged. It had been adopted by the European Commission in 2003, and was replaced by the

    in 2016.

     


  • Market Abuse Regulation (MAR)

    Tags:  regulation texts of law

    The Market Abuse Regulation is a EU regulation which came into effect in July 2016. Its purpose is to prevent and detect market abuse.

     


  • market cap

    Tags:  concept financial analysis

    See  


  • market capitalisation

    Tags:  concept financial analysis

    A company’s market capitalization is a measure of its size in terms of the total market value of its common stock. It is calculated by multiplying the number of common stock shares outstanding by the market price per share of common stock.

     


  • market claim

    Tags:  corporate actions post-negotiation

    A market claim is a procedure that covers income events and non-income events if a security is traded while "cum" (with the entitlement), but settled when "ex" (without the entitlement). The process of market claims is used for both OTC and stock exchange trades.

     


  • market identification code (MIC)

    Tags:  codes or standards financial markets

    The Market Identifier Code is a 4-letter alphanumeric code which uniquely identifies exchanges, trading platforms, regulated or non-regulated markets and trade reporting facilities.

     


  • market if touched (MIT)

    Tags:  market orders order types

    A market-if-touched order is an order that becomes a market order when the security falls to (buy order) or rises to (sell order) the specified price. to buy (or sell) an instrument below (or above) the market. Its purpose is to take advantage of sudden or unexpected changes in share or other prices and provides investors with a trigger price to set an order in motion.

     


  • market maker

    Tags:  activities and occupations financial markets

    Trader or institution who make firm two-way prices for securities.

     


  • market order

    Tags:  market orders order types

    Type of order to purchase or sell securities which is sent to the market without any indication of a limit price for the execution.

     


  • market price

    Tags:  financial instruments market quotation

    A financial instrument's market price is its last reported price in a market, determined by supply and demand.

     


  • market risk

    Tags:  risk management typology

    Exposure to potential loss from an adverse movement in market prices and rates.

     


  • Markets in Financial Instruments Directive (MiFID)

    Tags:  regulation texts of law

    The Markets in Financial Instruments Directive is a European Union law whose main purpose is to increase investor protection and competition in investment services across the member states of the European Economic Area.

     


  • Markets in Financial Instruments Regulation (MiFIR)

    Tags:  regulation texts of law

    The MiFIR Regulation is a European law which focuses on correcting the weaknesses in financial regulation observed during the financial crisis of 2008 and on adapting to new market practices and developments.

     


  • market value added (MVA)

    Tags:  corporate finance metric valuation and pricing

    Market value added is the difference between the market value of a business and the capital invested in it. If the result is positive, the firm has added value, otherwise the firm has destroyed value.

     


  • market value asset swap

    Tags:  financial instruments interest rate derivatives

    In a market value

    , the notional amount of the swap is equal to the market value of the underlying asset at the time the trade is executed.

     


  • materiality principle

    Tags:  accounting concept

    The materiality principle is a GAAP constraint which stipulates that the significance of an item should be considered when it is reported. An item is considered significant when it would affect the business decisions of a reasonable individual.

     


  • maturity date

    Tags:  characteristics financial instruments

    Date on which a financial instrument ceases to exist.

     


  • MBO

    Tags:  concept corporate finance

    See  


  • MBS

    Tags:  financial instruments securitisation

    See  


  • MBV

    Tags:  fundamental analysis ratios

    See  


  • mean reversion

    Tags:  concept interest curves

    The tendency for interest rates to revert back to a mean (average) level.

     


  • merger

    Tags:  corporate finance mechanism

    A merger is the amalgamation of two previously separate corporations. The assets and liabilities of both entities are combined into a newly created third entity.

     


  • message authentication code (MAC)

    Tags:  concept electronic systems

    A message authentication code is a security code that is attached to a message in order to verify its authenticity.

     


  • MFI

    Tags:  financial company status

    Territory:   Euro Member Countries

    See  


  • MIC

    Tags:  codes or standards financial markets

    See  


  • Mid-Atlantic option

    Tags:  options typology

    See  


  • MIFID

    Tags:  regulation texts of law

    Territory:   European Union

    See  


  • MiFIR

    Tags:  supervision and regulation texts of law

    Territory:   European Union

    See  


  • minimum reserves

    Tags:  financial system regulation

    Minimum percentage of their clients' deposits that banks in most countries are required to hold with the central bank.

     


  • minimum settlement unit (MSU)

    Tags:  post-negotiation transaction settlement

    The term minimum settlement unit defines the minimum quantity or nominal of a security for settlement in the T2S system. The value can be zero.

     


  • MIT

    Tags:  financial markets order types

    See  


  • MLA

    Tags:  financial markets security issuance

    See  


  • MMDA

    Tags:  financial instruments personal finance

    Country:   United States of America

    See  


  • MMF

    Tags:  post-negotiation transaction settlement

    See  


  • modified duration

    Tags:  bonds valuation and pricing

    Modified duration is measuring the approximate percentage change of a bond's price if its yield changes by 100 basis points.

     


  • modified duration

    Tags:  bonds valuation and pricing

    Modified duration is measuring the approximate percentage change of a bond's price if its yield changes by 100 basis points.

     


  • modified following

    Tags:  financial instruments market conventions

    See  


  • modified preceding

    Tags:  financial instruments market conventions

    See  


  • monetary authority

    Tags:  central banks financial system

    See  


  • monetary financial institutions (MFI)

    Tags:  financial company status

    Monetary Financial Institutions, as defined by the European Central Bank, are all financial institutions which together form the money issuing sector of the euro area.

     


  • money-market basis

    Tags:  financial instruments market conventions

    See  


  • money-market fund

    Tags:  asset management financial instruments

    A mutual fund that invests in short-term corporate and government debt and passes the interest payments on to shareholders.

     


  • money market

    Tags:  finance (general) financial markets

    The market for short term (usually up to one year) money, including deposits, treasury bills, commercial papers.

     


  • money market account (MMA)

    Tags:  financial instruments personal finance

    Country:   United States of America

    See  


  • money market deposit account (MMDA)

    Tags:  financial instruments personal finance

    Country:   United States of America

    A money market deposit account is a deposit account that generally pays a higher interest rate than a savings account and provides its holder with limited check-writing ability.

     


  • money of zero maturity (MZM)

    Tags:  economy metric

    Money of zero maturity (MZM) is a measure of the total amount of money immediately available at par value in an economy.

     


  • Monte Carlo

    Tags:  options valuation and pricing

    Term used to describe a specific option pricing method, the Monte Carlo simulation. This method generates a path of prices for the underlying asset, and the option is priced at maturity (within the model). The method is then repeated, with a second option price determined. Many thousands of trials are then carried out, and the average of all the trials is the final option price.

     


  • MOO

    Tags:  financial markets order types

    See  


  • Moody's Investor Services

    Tags:  interest rate markets organisations or institutions

    Generally known simply as «Moody's», the company Moody's Investor Services is one of the most important rating agencies. It was founded in 1909 by John Moody, an American financial analyst and investor.

     


  • mortgage-backed security (MBS)

    Tags:  financial instruments securitisation

    A mortgage-backed security is a form of securitisation where mortgages are pooled together and sold to a special purpose vehicle (SPV). The SPV then issues the mortgage-backed securities using the mortgages it has acquired as collateral.

     


  • MSP

    Tags:  derivatives status

    Country:   United States of America

    See  


  • MSU

    Tags:  concept post-negotiation

    Territory:   European Union

    See  


  • MTBV

    Tags:  fundamental analysis ratios

    See  


  • MTF

    Tags:  financial markets quoting and negotiation systems

    See  


  • multi-callable bond

    Tags:  bonds typology

    A callable bond which can be recalled by the issuer on several specified dates.

     


  • multi-manager fund

    Tags:  asset management financial instruments

    See  


  • multilateral trading facility (MTF)

    Tags:  financial markets quoting and negotiation systems

    The term multilateral trading facility stems from the European MiFID II directive and refers to a trading venue that facilitates the exchange of financial instruments between multiple parties.

     


  • multiple step-up note

    Tags:  interest rate instruments typology

    See  


  • mutual fund

    Tags:  asset management financial instruments

    A professionally managed portfolio of stocks, bonds or other investments which is divided up into shares.

     


  • MVA

    Tags:  corporate finance valuation and pricing

    See  


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