Management fee

The money paid to the manager(s) of a mutual fund, annuity subaccount, or other type of professionally managed investment. Also called an advisory fee.

Margin account

A brokerage account that permits the owner to borrow money to buy securities. Margin accounts should not be used by inexperienced investors, or those who are putting money at risk that they can't afford to lose.

Margin call

A brokerage firm's demand that a customer deposit enough money or securities to bring a margin account back up to the minimum maintenance amount. This is typically made after the value of the margined securities has plummeted.

Market capitalization (market cap)

A company's total stock market value, calculated by multiplying the price of a single share by the total number of shares outstanding. You can find information about shares outstanding from the company's last quarterly report or any online quote service (e.g., http://quote.fool.com/).

Market order

An order to buy or sell immediately at the best price available.

Market timing

An investment strategy based on predicting short-term price changes in securities, which is virtually impossible to do.

Maturity/maturity date

The date on which the issuer of a certificate of deposit or a bond agrees to repay the principal to the buyer.

Merger

The unification of two or more companies.

Micro-cap stock

Stocks with market capitalizations of less than $150 million.

Mid-capitalization (mid-cap) stocks

Generally, companies whose market value is between $1 billion and about $10 billion.

Money market fund

A mutual fund that invests in very short-term, high-liquidity investments. Similar to a savings account, though usually offering better interest rates.

Muni fund

See Municipal bond fund.

Municipal bond

A debt instrument issued by a state or local government. The advantage of investing in municipal bonds (or "munis") is their exemption from federal, and sometimes state and local, taxes.

Municipal bond fund

A mutual fund that invests primarily in municipal bonds.

Mutual fund

The pooled cash of many shareholders that is invested according to a stated objective, as defined by the fund's prospectus. See The Truth About Mutual Funds.

Mutual savings bank

A savings bank that is owned by, and operated for the benefit of, its depositors.

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NAIC

See National Association of Investors Corporation.

Naked options

Options that are sold on securities when the seller does not actually own shares of the underlying securities -- a highly risky endeavor. Naked options, unsurprisingly, are also referred to as "uncovered options."

NASD

See National Association of Securities Dealers.

NASD Regulation (NASDR)

An independent subsidiary of the NASD that regulates the activities of broker/dealers in the over-the-counter markets and the Nasdaq Stock Market.

Nasdaq (National Association of Securities Dealers Automated Quotations)

A computerized system that stores and displays up-to-the-second price quotations for securities traded over the counter.

Nasdaq 100 Index

An index that includes the Nasdaq's 100 largest companies (Microsoft, Intel, WorldCom, Dell, etc.) and is heavily focused on technology companies. You can buy it as a single stock -- it's called the Nasdaq 100 Index Tracking Stock (AMEX: QQQ).

National Association of Investors Corporation (NAIC)

The NAIC is a nonprofit association dedicated to the education of investment clubs and individuals. See what the NAIC has to offer at their website. Learn more about investment clubs at Introduction to Investment Clubs.

National Association of Securities Dealers (NASD)

The largest securities-industry self-regulatory organization in the United States. Through its subsidiaries -- the NASD Regulation, Inc. and The Nasdaq Stock Market, Inc. -- the National Association of Securities Dealers develops rules and regulations and conducts regulatory reviews of members' business activities.

NAV

See Net asset value.

Net asset value (NAV)

The price of each share of a mutual fund. It is calculated by subtracting the fund's liabilities from its total assets, and dividing that figure by the number of shares outstanding. The NAV is the amount of money that an investor would receive for each share if the mutual fund sold all of its assets, paid off all of its outstanding debts, and distributed the proceeds to shareholders.

Net income

Gross income minus total expenses gives you net income. You'll find this information on the income statement.

Net investment

Gross, or total, investment minus depreciation.

Net profit

The bottom line. This is how much money the company made in profits. It can also refer to net profit margin, which is a percentage telling you how many cents on each dollar is pure profit.

Net profit margin

Net income as a percentage of sales. You get this by dividing net income by sales. Since it's a percentage, it tells you how many cents on each dollar of sales is pure profit.

Net quick assets

Cash, accounts receivable (which is money owed to the company from its customers), and marketable securities, minus current liabilities.

Net revenue

Net revenue is revenues (sales), minus returns, discounts, and allowances.

New York Stock Exchange (NYSE)

The oldest and largest stock exchange in the United States, this Wall Street haunt is frequently featured on television, with hundreds of traders on the floor staring up at screens and answering phones, ready to trade stocks on command from their firms.

Nikkei Index

An index of more than 200 blue-chip stocks traded on the Tokyo Stock Exchange.

No-load fund

A mutual fund that does not charge a sales commission. See Mutual Funds: Loads.

Nominal returns

Investment returns before adjusting for inflation.

Normal trading unit

See Round lot.

NYSE

See New York Stock Exchange.

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Odd lot

Trading securities in share amounts of either less than 100 or an amount that is not a multiple of 100. Trading in odd lots used to incur higher transaction fees from full-service brokerages. Today, with online, computerized discount trading, buying and selling stock in odd lots no longer involves higher transaction costs.

Offering price

See Ask.

One-time charge

A cost that a company must pay once, as compared with costs it must pay regularly. If, for instance, the company spends money to acquire another company, that may be considered a "one-time charge." One-time charges are generally backed out of earnings for comparisons to prior time periods so that they don't artificially inflate or deflate the company's performance.

Open order

A buy or sell order that has not yet been canceled or executed.

Open-end fund

A mutual fund that has an unlimited number of shares available for purchase. Most mutual funds are open-ended. See Closed-end fund.

Operating cash flow

Dough that's piling up in the course of a company running its business. Fools love cash generators because they can rely less on outside funding to grow their business.

Operating cycle

The time it takes to sell a product and collect cash from the sale. An operating cycle can last from several weeks to a number of years.

Operating expenses

The cost of doing business. Operating expenses are deducted from revenues, and the result is, hopefully, profits.

Option

A call option is a contract in which a seller gives a buyer the right, but not the obligation, to buy the optioned shares of a company at a set price (the strike price) for a certain period of time. If the stock fails to exceed the strike price before the expiration date, the option expires worthless. A put option is a contract that gives the buyer the right, but not the obligation, to sell the stock underlying the contract at a predetermined price (the strike price). The seller (or writer) of the put option is obligated to buy the stock at the strike price.

Order

A request from a client to a broker to buy or sell stock, either at the market price or at a specific price.

Over the counter (OTC)

A geographically decentralized market in which stock and other securities transactions are not conducted in person -- as on the much-televised floor of the New York Stock Exchange -- but through a telephone and computer network. The over-the-counter market is regulated by the National Association of Securities Dealers (NASD).