174 terms

Dictionary: M

Macaulay duration: The weighted average time in years until a bond's cash flows arrive, with each payment weighted by its present value share of the price.
MACD: Moving Average Convergence Divergence: the gap between a 12- and 26-period EMA, with a 9-period signal line and a histogram.
MACD histogram: Bars showing the gap between the MACD line and its signal line, used to see momentum changing before the lines actually cross.
MACD signal line: The 9 period exponential average of the MACD line, whose crossings with MACD are the indicator's most commonly traded trigger.
MACD zero line cross: The moment MACD crosses zero, which happens exactly when the fast moving average crosses the slow one.
Maintenance capital expenditure: The portion of capital spending needed just to keep current capacity and capability intact, as opposed to the portion funding expansion.
Maintenance margin: The minimum account equity required to keep a futures position open; falling below it triggers a margin call.
Major pairs: The most traded currency pairs, all involving the US dollar: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, NZD/USD.
Make-whole call: A redemption provision that lets the issuer call a bond early only by paying the present value of all remaining cash flows discounted at a small spread over Treasuries.
Maker and taker fees: The two-tier fee schedule on most venues: posting resting liquidity (maker) costs less than crossing the spread (taker), sometimes even paying a rebate.
Maker-taker pricing: A venue fee model that pays a rebate to orders adding liquidity and charges a fee to orders removing it, with the venue keeping the difference.
Managed float: A regime where the exchange rate is broadly set by the market but the authorities intervene when they dislike the pace or level, without publishing a target.
Managed futures: Strategies that trade listed futures and forwards across equities, rates, currencies and commodities, usually systematically and usually able to go long or short.
Managed money: The disaggregated COT category covering registered commodity trading advisors, commodity pool operators and hedge funds trading futures for clients.
Management buyout: A buyout led by the company's own executives, usually with a private equity partner, which creates an obvious conflict of interest.
Management fee: The portion of a fund's costs paid to the investment manager for running the portfolio, usually the largest single component of the expense ratio.
Management's discussion and analysis: The narrative section of a filing where management explains the results, the trends behind them, liquidity, and known uncertainties.
Managing at 21 days: The common short-premium convention of closing or rolling a position around three weeks to expiration, before gamma risk accelerates.
MAR ratio: Compound annual return divided by maximum drawdown over the entire track record, a stricter cousin of the Calmar ratio.
Margin: Money borrowed from a broker to trade, or the collateral you must post to hold a leveraged position.
Margin account: An account that permits borrowing against securities, enabling leverage, short selling and immediate reuse of sale proceeds, in exchange for collateral rules and liquidation risk.
Margin call: A broker's demand for more funds when a leveraged account falls below the required maintenance level; positions are liquidated if you do not meet it.
Margin close-out rule: A regulatory requirement in several jurisdictions that a retail CFD or forex account be closed out when equity falls to 50% of the margin required for the open positions.
Margin cushion: The buffer between current equity and the level at which the broker would issue a call or liquidate.
Margin increase: An exchange or broker raising the required deposit per contract, usually after volatility rises, which forces leveraged holders to add cash or reduce size.
Margin interest: The interest charged on a margin loan, accrued daily on the debit balance at a tiered rate that falls as the borrowed amount rises.
Margin level: Equity divided by used margin, expressed as a percentage. It is the single number brokers use to decide when to warn you and when to start closing positions.
Margin requirement: The share of a position's notional value a broker requires you to post as collateral, quoted either as a percentage such as 3.33% or as a leverage ratio such as 30:1.
Margin utilisation: The percentage of your available margin currently in use, a fast proxy for how close you are to forced deleveraging.
Mark price: The reference price a venue uses to value open positions and trigger liquidations, smoothed from an external index rather than taken from its own last trade.
Mark-to-market: Daily revaluation of open positions at the settlement price, with gains credited and losses debited to the account in cash.
Mark-to-market anxiety: Distress driven by the continuous revaluation of open positions, where a normal fluctuation is experienced as a loss happening to you now.
Market Abuse Regulation (MAR): The European regime prohibiting insider dealing, unlawful disclosure and market manipulation, with issuer duties to disclose inside information promptly and keep insider lists.
Market access rule: The US rule requiring brokers providing market access to maintain pre-trade risk controls under their own exclusive control, which ended naked sponsored access.
Market breadth: Measures of how many individual stocks are participating in a market move, as opposed to what the headline index is doing.
Market by order (MBO): A data format that broadcasts every individual order event, letting a subscriber rebuild the exact order book including each order's place in the queue.
Market by price (MBP): A data format that publishes total resting quantity at each price level rather than individual orders, giving a compact book view at far lower message rates.
Market cap versus enterprise value: Market cap prices the equity alone; enterprise value adds net debt and other claims to price the whole business regardless of who funded it.
Market capitalization: The total market value of a company: share price multiplied by shares outstanding.
Market cycle emotions: The familiar loop from disbelief through optimism, euphoria, anxiety, denial, and capitulation that crowds move through in a full cycle.
Market data fee: The monthly charge exchanges levy for real-time futures quotes, billed per exchange and per user.
Market data licensing: The contractual regime under which exchanges sell price data, covering per-user fees, redistribution rights, display versus non-display use, and audit obligations.
Market depth: How much can be bought or sold near the current price, usually quoted as the notional resting within 1% or 2% of mid on each side.
Market execution: An order model where the broker fills your order at the next available price with no requote, accepting slippage in either direction.
Market impact: The price movement your own trading causes, split into a temporary part that decays after you stop and a permanent part that reflects information you revealed.
Market maker: A firm that continuously quotes both a bid and an ask, earning the spread in exchange for providing liquidity.
Market manipulation: Illegal conduct designed to create a false price or the appearance of activity, such as spoofing, wash trading, and pump-and-dump schemes.
Market neutral: A portfolio constructed so that net exposure to the overall market is close to zero, leaving return dependent on relative performance within the book.
Market order: An order to buy or sell immediately at the best available price, with no price guarantee.
Market order collar: A band applied by brokers or venues around the current quote, beyond which a market order will not execute, converting a runaway fill into a reject or a resting limit.
Market profile: A way of organising a session by price rather than time, showing how long the market spent trading at each level.
Market regime: A stretch of time in which market behaviour is roughly consistent: trending or ranging, calm or volatile, correlated or dispersed.
Market structure: The sequence of swing highs and swing lows that describes whether price is trending, ranging, or changing direction.
Market-cap weighted index: An index that weights each constituent by its market value, so the largest companies dominate. It requires almost no trading to maintain, which is why it is the default.
Market-cap weighting: Sizing each index constituent by its total market value, so the largest companies dominate the benchmark and no trading is needed as prices move.
Market-if-touched (MIT): A resting instruction that turns into a market order once price trades at a chosen trigger, used to buy weakness or sell strength rather than to stop out.
Market-on-close (MOC): An order that executes at the official closing price in the closing auction.
Market-on-open (MOO): An order that participates in the opening auction at whatever single price the auction sets, rather than trading during continuous hours.
Marketable limit order: A limit order priced at or through the other side of the market, so it fills immediately like a market order but with a worst-case price attached.
Marketable securities: Liquid investments held instead of cash, typically treasury bills, commercial paper and short corporate bonds, reported separately from cash and equivalents.
Marking the close: Illegally trading near the end of the session to push the official closing price to a level that benefits a position, valuation or benchmark.
Markov property: The idea that the current state contains everything needed to forecast the future, so older history adds nothing once you know today.
Markup: The amount a broker adds to each side of the price it receives from its liquidity providers, the main revenue source in spread-only pricing.
Married put: Buying stock and a protective put at the same time, as one order; the entry version of a protective put and, in the US, a tax-lot distinction.
Martingale: Doubling size after each loss to recover with one win; mathematically guaranteed to blow up an account with finite capital.
Martingale mindset: Believing that doubling after each loss guarantees recovery, which is true only with unlimited capital and no limits.
Martingale process: A process whose expected next value equals its current value, given everything known so far. A fair game, with no predictable drift up or down.
Marubozu: A candle with a full body and little or no shadow, meaning price opened at one extreme and closed at the other.
Master limited partnership: A publicly traded partnership, most commonly in energy infrastructure, that pays no entity-level tax and passes income and deductions through to unitholders.
Master-feeder structure: An arrangement where several feeder funds in different jurisdictions invest into a single master fund that holds the actual portfolio and does all the trading.
Matching algorithm: The exchange rule that decides which resting order gets filled when an aggressive order arrives at a price level.
Matching engine: The exchange software that holds the order book and pairs incoming orders with resting ones according to strict, published priority rules.
Material non-public information (MNPI): Information a reasonable investor would consider important to a trading decision that has not been broadly disseminated; trading on it in breach of a duty is insider trading.
Maturity: The date the issuer repays a bond's face value and the security ceases to exist; also shorthand for how long is left until that date.
Max drawdown: The largest peak-to-trough decline an account or strategy has experienced over a period.
Max pain: The strike at which the total value of expiring options is smallest, framed as the price that causes the greatest aggregate loss to option holders.
Max supply: The hard cap on how many tokens can ever exist, where a protocol defines one; many tokens have no cap at all.
Maximum adverse excursion: The worst unrealised loss a trade experienced before it closed, which tells you whether your stops are too wide or too tight.
Maximum favourable excursion: The best unrealised profit a trade reached before closing, which measures how much of each move your exits actually captured.
Maximum loss: The worst outcome a defined-risk position can produce; for undefined-risk positions it does not exist in any useful sense.
Maximum open risk: The sum of what every open position would lose if all stops were hit at once, capped by a pre-set ceiling.
Maximum profit: The most a defined-risk position can make, reached at a specific price or range at expiration.
McClellan oscillator: The difference between a fast and a slow exponential average of daily net advances minus declines, used as a momentum measure of breadth.
McClellan summation index: A running cumulative total of the McClellan oscillator, used as a longer-term measure of breadth condition.
Mean reversion: The tendency of a stretched price to move back toward its average; the opposite approach to trend following.
Mean-reversion half-life: How long it takes, on average, for a deviation from the mean to shrink by half. It tells you the natural holding period of a reversion trade.
Mean-variance optimisation: Solving for the weights that maximise expected return for a given variance, given inputs for expected returns, volatilities and correlations.
Measured move: A target derived from a pattern's own size, such as projecting the height of a triangle or flagpole from the breakout point.
Mega-cap: The largest listed companies, generally above roughly $200 billion in market value, where a single name can move a whole index.
Melt-up: A steep, accelerating advance driven by participants chasing rather than by new fundamentals.
Meme coin: A token with no cash flow or product whose price is driven entirely by attention, liquidity and reflexive flows.
Meme stock: A stock whose price is driven mainly by coordinated retail attention on social platforms rather than by fundamentals.
Mempool: The waiting room of broadcast-but-unconfirmed transactions that block producers pick from, usually highest fee first.
Mental accounting: Treating money differently depending on which mental bucket it sits in, even though every dollar in an account is identical.
Mental stop: A stop level you hold in your head and execute manually, which works only if you execute it every single time.
Merger: Two companies combine into one entity, with shareholders of at least one side receiving cash, stock, or a mix for their shares.
Merger arbitrage: Buying a takeover target below the offer price to capture the remaining spread, accepting the risk that the deal collapses.
Merkle tree: A hash structure that lets you prove one transaction was included in a block without downloading the whole block.
Meta-labelling: Using a second model to decide how much to bet on a primary model's signals, rather than to decide direction. It can improve precision without touching the underlying idea.
Metallgesellschaft hedging loss (1993): A German industrial group lost around $1.3 billion hedging long-dated fuel supply contracts with short-dated futures, destroyed not by a bad view but by rolling costs and margin calls.
MetaTrader (MT4 / MT5): The retail trading platforms that became the default in forex and CFDs, notable for automated strategies, custom indicators and broker-hosted server accounts.
MEV: Value a block producer or searcher can capture by choosing which transactions go in a block and in what order, beyond the fees those transactions pay.
MF Global collapse (2011): The failure of a major futures broker that left roughly $1.6 billion of supposedly segregated customer funds missing, the largest breach of client asset protection in US futures history.
Micro futures: Futures contracts sized at one-tenth of the standard E-mini, letting small accounts trade with proportionally small risk.
Micro lot: A forex position of 1,000 units of the base currency, worth about $0.10 per pip on USD-quoted pairs.
Micro-cap: Companies worth roughly $50 million to $300 million; very low float, violent moves, and a high rate of dilution and failure.
Mid price: The midpoint between bid and ask; the usual starting point for a limit order and a rough estimate of fair value.
Mid rate: The average of the bid and the ask, used for valuation, news reporting and comparison, though no one actually trades at it.
Mid-cap: Companies worth roughly $2 billion to $10 billion; more growth runway than large-caps and more volatility, with thinner coverage.
Midpoint: The price exactly halfway between the best bid and best offer, used as the fair reference for dark crosses, mark-to-market and transaction cost measurement.
Midpoint peg: A pegged order that rests at the midpoint of the national best bid and offer, aiming to split the spread rather than pay it.
MiFID II: The European framework governing investment firms and venues, covering authorisation, conduct, product governance, best execution, research unbundling and transparency.
MiFIR: The directly applicable European regulation accompanying MiFID II, covering pre- and post-trade transparency, transaction reporting, trading obligations and product intervention powers.
Mindfulness practice: Training attention to notice what is happening, including your own urges, without acting on them immediately.
Miner capitulation: A phase where mining revenue falls below running costs, forcing weaker operators to sell reserves and switch off machines until difficulty adjusts.
Mini index options: A one-tenth-size version of a big index option contract, keeping cash settlement and European exercise at a retail-friendly notional.
Mini option: A contract covering 10 shares instead of 100, letting small accounts trade high-priced stock without a full-size position.
Minimum backtest length: The shortest history over which a claimed Sharpe ratio could be distinguished from the best of your search, roughly scaling with the number of trials.
Minimum position size: The smallest tradeable quantity, which can force risk above your rule or make the trade impossible.
Minimum price increment: The smallest amount a quoted price is allowed to change on a given instrument, which sets the floor on how tight the spread can ever be.
Minimum quantity (MinQty): A condition requiring each execution to be at least a set size, used to avoid being picked apart by tiny fills in dark venues.
Minnow: A small holder, the counterpart to a whale - someone whose trades move nothing.
Minor pairs (crosses): Currency pairs between major currencies that do not include the US dollar, such as EUR/GBP, EUR/JPY, and GBP/JPY.
Mint (NFT): Buying newly created NFTs directly from the project's contract, usually in a competitive window with gas costs to match.
Minting: Creating new tokens, either by protocol rule such as block rewards, or by a contract function someone controls.
Misappropriation theory: The doctrine that trading on confidential information in breach of a duty to its source is securities fraud, even where the trader owes no duty to the company whose shares are traded.
Missing data: Gaps in a series, from halts, holidays, vendor outages, or instruments that did not exist yet. How you fill them changes results more than most people expect.
Mixed lot: An order whose size is more than one round lot but not an exact multiple, such as 340 shares; it is treated as a round lot plus an odd lot for quoting purposes.
Mixed straddle election: US elections that coordinate taxation when a straddle contains both Section 1256 contracts and ordinary positions, preventing mismatched timing and character. United States.
Model risk: The risk that your risk numbers are wrong because the model behind them assumes a world that does not exist.
Modern portfolio theory: The framework, formalised by Markowitz, that treats a portfolio's risk as a function of holdings' volatilities and their correlations rather than as the sum of individual risks.
Modified duration: Macaulay duration divided by one plus the yield per period; the approximate percentage price change for a 1% move in yield.
Modular blockchain: A design that splits execution, settlement, consensus and data availability across separate specialised layers instead of one chain doing all four.
Momentum factor: The tendency for assets that performed well over the past six to twelve months to keep outperforming over the following months, before eventually reversing.
Momentum ignition: An illegal practice of firing aggressive orders to start a rapid price move, so that others' momentum systems pile in and the instigator exits into them.
Momentum indicator: Any measure of the rate at which price is changing, as opposed to its level, used to judge whether a move is accelerating or fading.
Monetary Authority of Singapore (MAS): Singapore's central bank and integrated financial regulator, licensing brokers and digital payment token services and running a notably strict marketing regime for crypto.
Money Flow Index: An RSI-style oscillator computed from typical price multiplied by volume, so it reflects both price direction and participation.
Money market: The market for borrowing and lending with maturities under one year: bills, repo, commercial paper, CDs and bank deposits.
Money market fund: A fund holding very short-dated, high-quality debt such as treasury bills, repo and commercial paper, aiming to preserve principal while paying a short-term rate.
Money scripts: Unexamined beliefs about money picked up early in life, which quietly set how much risk feels acceptable and what a loss means.
Money supply (M1, M2): Measures of the stock of money in an economy; M1 covers currency and checkable deposits, M2 adds savings deposits, small time deposits and retail money market funds.
Money-weighted return: The return that accounts for the size and timing of cash flows, answering what the investor actually earned on the money they had at work.
Moneyness: How far a strike sits from the current price, expressed as in, at or out of the money, or as a ratio or delta.
Monte Carlo pricing: Valuing an option by simulating thousands of possible price paths, averaging the payoffs and discounting; the general-purpose tool for exotic structures.
Monte Carlo reshuffle: Randomly reordering or resampling your trades thousands of times to see the range of equity curves your edge could plausibly have produced.
Monte Carlo simulation: Running thousands of randomised return paths to estimate the distribution of outcomes for a portfolio or withdrawal plan rather than a single average.
Monte Carlo VaR: Value at risk from simulating thousands of possible return paths under a chosen model, then reading the loss percentile of the results.
Month-end rebalancing flow: Currency buying or selling driven by fund managers adjusting hedges on foreign assets at month end, typically concentrated into the late London fixing.
Monthly loss limit: A drawdown ceiling for the month that forces a full strategy review rather than another attempt at a comeback.
Monthly recurring revenue: The monthly equivalent of annual recurring revenue, favoured by smaller and self-serve subscription businesses with monthly billing.
Monthly return table: A grid of monthly returns by year, which is the fastest honest summary of a track record and the hardest to dress up.
Moon (mooning, to the moon): A dramatic, parabolic price rise; something that mooned went up enormously.
Morning star: A three-candle bottoming pattern: a large red candle, a small indecisive candle, then a large green candle closing well into the first body.
Mortgage REIT: A REIT that holds mortgages and mortgage-backed securities rather than buildings, earning the spread between asset yields and its own short-term borrowing costs.
Mortgage-backed security (MBS): A bond backed by a pool of mortgages that passes homeowner principal and interest through to holders; agency MBS carry a guarantee against default but not against prepayment.
Motivated reasoning: Reasoning toward the conclusion you want rather than from the evidence, with the standard of proof set by whether you like the answer.
Moving average (SMA and EMA): The average closing price over the last N periods, plotted as a line; the EMA weights recent prices more heavily.
Moving average as support: The practice of treating a widely watched moving average, such as the 200 day, as a level where buying may appear.
Moving average crossover: A signal generated when a faster moving average crosses a slower one, used as a simple mechanical trend filter.
Moving average envelope: Bands drawn a fixed percentage above and below a moving average, marking how far price has stretched from its recent mean.
Moving average ribbon: A stack of moving averages of increasing length plotted together, so the spacing and ordering of the lines describe trend strength.
Multi-leg margin: Margin charged on a spread as a package rather than leg by leg, which is why a defined-risk structure requires only its maximum loss.
Multi-strategy fund: A single fund running several distinct strategies under one roof, with capital reallocated internally between them by a central risk function.
Multi-timeframe analysis: Checking the same instrument on two or three chart intervals so that entries on a small timeframe agree with the larger picture.
Multicollinearity: Input variables that are strongly correlated with each other, making individual coefficients unstable even when the model's forecasts are fine.
Multiple expansion: A change in the price paid per unit of earnings or cash flow, as opposed to a change in the earnings themselves; the part of a return that sentiment supplies.
Multiple testing: Running many statistical tests at once, which makes false positives near-certain unless you adjust your significance threshold.
Multisig wallet: A wallet requiring several keys to approve a transaction, removing any single point of failure or single person's mistake.
Municipal bond (muni): Debt issued by US states, cities and other public bodies; interest is usually exempt from federal income tax, so headline yields look low until you gross them up.
Municipal Securities Rulemaking Board (MSRB): The US body that writes rules for firms dealing in municipal bonds and runs EMMA, the free public disclosure system for muni issuers.
Mutual fund: A pooled fund that issues and cancels its own shares on demand at the day's closing NAV, so it always trades at net asset value and never intraday.
MVRV ratio: Market cap divided by realised cap. Above 1 the average coin is held in profit; extreme readings have historically marked cycle tops and bottoms.
Myopic loss aversion: Checking results too often, which exposes you to more losses than gains in the short run and makes a good strategy feel unbearable.

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