P1:a/b P2:c/d QC:e/f T1:g
gloss JWBK182-McDowell April 25, 2008 16:35 Printer: Yet to come
192 GLOSSARYcharacteristics, and by plotting the difference of the moving averages as an oscilla-
tor, MACD displays momentum characteristics. The MACD histogram is the visual
representation of the difference between the MACD line and the MACD signal line.
mutual fund An investment company investing in a variety of securities as dic-
tated by the specific fund’s prospectus. Investors do not own the underlying invest-
ments; they buy shares of the fund itself.
naked option A short option position by a trader who does not own the underlying
commodity or financial instrument.
naked put A put option in which the seller does not own the short position. Loss
potential is total except for the premium.
narrowing the spread Reducing the difference between the bid and ask prices of
a security.
NASDAQ SeeNational Association of Securities Dealers Automated Quotations
System.
NASDAQ 100 index A modified capitalization-weighted index designed to track
the performance of the 100 largest and most actively traded nonfinancial domestic
and international securities listed on the NASDAQ.
National Association of Securities Dealers Automated Quotations System
(NASDAQ) The NASDAQ is an American stock market. It was founded in 1971
by the NASD, who divested themselves of it in a series of sales in 2000 and 2001. It
is owned and operated by the NASDAQ Stock Market, Inc. the stock of which was
listed on its own stock exchange in 2002. NASDAQ is the largest electronic screen-
based equity securities market in the United States. With approximately 3,200 com-
panies, it lists more companies and on average trades more shares per day than any
other United States market.
National Association of Securities Dealers, Inc. (NASD) This self-regulatory orga-
nization of the securities industry is responsible for the regulation of the NASDAQ
stock market and the over-the-counter markets.
nearest month The expiration date of an option or future that is closest to the
present.
net asset value (NAV) This is an increment of movement in the mutual fund
market.
net worth Total assets minus total liabilities equals net worth.
New York Cotton Exchange (NYCE) Was founded in 1870 by a group of 100 cotton
brokers and merchants in New York City. The oldest commodities exchange in the
city, well into the twentieth century, cotton was a leading American commodity for
both export and domestic consumption.
New York Futures Exchange (NYFE) An exchange on which trading occurs for
Treasury bond futures and some currency futures.