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284 SECURITIESTRADING ON THEINTERNETparticular stock is called aspecialist, and there is only
one specialist in each stock. Brokerage firms that main-
tain an inventory of a particular security to sell to their
own clients, or to brokers at other firms for resale, are
also called market makers.
Message board Also referred to as “discussion lists” and
“bulletin boards.” Web-based message boards allow
users to publish questions, responses, and announce-
ments for others to see and respond to at a later time.
Unlike chat rooms, the communication is not neces-
sarily live.
Mutual fund A mutual fund is a professionally man-
aged investment that pools the capital of thousands of
investors to trade in stocks, bonds, options, futures,
currencies, or money market securities, depending on
the investment objectives of the fund.
Nasdaq National Market (Nasdaq) The Nasdaq na-
tional market is part of the electronic Nasdaq stock
market administered by the National Association of
Securities Dealers (NASD). Stocks traded on this mar-
ket must meet specific listing criteria for market capi-
talization and trading activity.
New York Stock Exchange (NYSE) The NYSE is the
largest equity exchange in the world. Founded in 1789,
it has a global market capitalization of over $15 tril-
lion. Common and preferred stock, bonds, warrants,
and rights are all traded on the NYSE, which is also
known as the Big Board.
Option Buying an option gives an investor the right to
buy or sell a specific investment at a specific price,
called the strike price, during a preset period of time.
An American-style option is an option that the holder
may exercise at any time up to and including the op-
tion’s expiration date. A European-style option is one
that can only be exercised on its expiration date.
Over the counter (OTC) The majority of stocks in the
U.S. (as well as government and municipal bonds) are
traded over the counter, rather than on the floor of an
organized stock exchange. That number includes more
than 5,000 stocks that are listed on the Nasdaq Stock
Market (Nasdaq) and are part of the National Market
System (NMS), as well as stock in companies too small
to meet stock market listing requirements.
Pure-play A firm is a pure-play if its only distribution
channel is the Internet or the wireless Web. In the
1990s, many Internet start-ups were pure-plays.
Securities and Exchange Commission (SEC) The
SEC is an independent federal agency that oversees
and regulates the securities industry in the U.S. and
enforces securities laws. It requires registration of all
securities offered in interstate commerce and of all in-
dividuals and firms who sell those securities.
Share of market Share of market is a traditional mea-
sure of marketing success, calculated as a given com-
pany’s sales divided by the sales of all competitors
(including that company) in a given product market.
In contrast,share of walletconcentrates on the individ-
ual customer. It is calculated as the percentage of an
individual’s purchases in a given product category that
are accounted for by a given seller.
Stickiness Stickiness refers to Website content that in-
duces visitors to spend lots of time at the site, therebyincreasing their chances of responding to an advertise-
ment or making a purchase.
Stock A stock is an investment that represents part own-
ership in a corporation and entitles an investor to
part of that corporation’s earnings and assets. Com-
mon stocks provide voting rights to shareholders but
no guarantee of dividend payments. Preferred stocks
provide no voting rights but guarantee a dividend pay-
ment. (Under certain circumstances and for special
purposes, “restricted” nonvoting common stock may
be issued by a corporation.)
Yield Yield is the rate of return on an investment, paid
in dividends or interest and expressed as a percent. In
the case of stocks, the yield on an investment is the div-
idend per share divided by the stock’s price per share.
With bonds, it is the interest divided by the price.CROSS REFERENCES
SeeDigital Divide; Internet Navigation (Basics, Services,
and Portals).REFERENCES
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