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- Naive diversification
- A strategy whereby an investor simply invests in a number of different
assets and hopes that the variance of the expected return on the portfolio
is lowered. Related: Markowitz diversification
- Naked strategies
- An unhedged strategy making exclusive use of one of the following: long
call strategy (buying call options), short call strategy (selling or writing
call options), long put strategy (buying put options), and short put
strategy (selling or writing put options). By themselves, these positions
are called naked stratgies because they do not involve an offsetting or
risk-reducing position in another option or the underlying security. Related:
Covered, Hedge option strategies
- National Association of Securities Dealers Automatic Quotation (NASDAQ)
System
- An electronic quotation system that provides price quotations to market
participants about the more actively traded common stock issues in the OTC
market. About 4,000 common stock issues are included in the NASDAQ system.
- National Futures Association (NFA)
- The futures industry self regulatory organization established in 1982.
- National market
- Related: Internal market
- Nearby futures contract
- When several futures contracts are considered, the contract with the
closest settlement date is called the nearby futures contract. The next
futures contract is the one that settles just after the nearby futures
contract. The contract farthest away in time from settlement is called the
most distant futures contract.
- Nearby
- The nearest active trading month of a financial or commodity futures
market. Related: Deferred futures
- Negative carry
- Related: Net financing cost
- Negative convexity
- A bond characteristic such that the price appreciation will be less than
the price depreciation for a large change in yield of a given number of
basis points.
- Neglected firm effect
- The tendency of firms that are neglected by security analysts to
outperform firms that are the subject of considerable attention.
- Negotiable order of withdrawal (NOW) account
- Demand deposits that pay interest.
- Net asset value (NAV) per share
- The basis of a mutual fund's share price, which is found by subtracting
from the market value of the portfolio the mutual fund's liabilities and
then dividing by the number of mutual fund shares outstanding.
- Net financing cost
- Also called the cost of carry or, simply, carry, the difference between
the cost of financing the purchase of an asset and the asset's cash yield.
Positive carry means that the yield earned is greater than the financing
cost; negative carry means that the financing cost exceeds the yield earned.
- Net operating margin
- The ratio of net operating income to net sales.
- Next futures contract
- The contract settling immediately after the nearby futures contract.
- No-load fund
- A mutual fund that does not impose a sales commission. Related: Load
fund
- Nominal price
- Price quotations on futures for a period in which no actual trading took
place.
- Non-cumulative preferred stock
- Preferred stock whose holders must forgo dividend payments when the
company misses a dividend payment. Related: Cumulative preferred
stock
- Non-insured plans
- Defined benefit pension plans that are not guaranteed by life insurance
products. Related: Insured plans
- Non-parallel shift in the yield curve
- A shift in the yield curve in which yields do not change by the same
number of basis points for every maturity. Related: Parallel shift in
the yield curve.
- Non-reproducible assets
- A tangible asset with unique physical properties, like a parcel of land, a
mine, or a work of art.
- Normal deviate
- Related: Standardized value
- Normal distribution
- A probability distribution forming a symmetrical bell-shaped curve.
- Normal portfolio
- A customized benchmark that includes all the securities from which a
manager normally chooses, weighted as the manager would weight them in a
portfolio.
- Normalizing method
- The practice of making a charge in the income account equivalent to the
tax savings realized through the use of different depreciation methods for
shareholder and income tax purposes, thus washing out the benefits of the
tax savings reported as final net income to shareholders.
- Notes
- Debt instruments with maturities of less than 10 years.
- Notice day
- A day on which notices of intent to deliver pertaining to a specified
delivery month may be issued. Related: Delivery notice
- Notional principal amount
- In an interest rate swap, the predetermined dollar principal on which the
exchanged interest payments are based.
Options Glossary
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