See: New Issue

NAIC (National Association Of Investment Clubs)
Association that helps groups of individuals to establish investment clubs. Members of investment clubs pool their money and make group decisions on how to invest those assets. The NAIC can be contacted by calling (313) 543-0612 or by writing 1515 E. Eleven Mile Rd. Royal Oak, Michigan 48067.

See: Investment Club

Naked Option
Industry lingo for call or put options that are written and not covered or have another position that will limit their liability. In the case of call options, writers are naked if they do not own either the underlying security, a security convertible into the underlying security, or a long call at a strike price equal to or lower than the strike price that was written and that does not expire before the written call. In the case of put options, writers are naked if they do not either have a short position in the underlying security, a bank guarantee letter, or do not own a long put with a strike price equal to or higher than the strike price of the put that was written and that does not expire before the put that was written.

See: Bank Guarantee Letter; Convertible Securities; Covered Call Option; Covered Put Option; Limited Liability; Long Position; Naked Position; Option Writer; Short Position; Uncovered Option; Underlying Security; Writing Naked

Naked Position
A securities position that is not protected from market risk in any manner. For instance, the position of person who writes a call option without owning a long position in the underlying security, or writing a put option without having a short position in the underlying security.

See: Covered Call Option; Covered Put Option; Long Position; Option Writer; Options; Put Option; Risk; Short Position; Underlying Security

Narrowing the Spread
Closing the difference between a security's bid (highest price anyone is willing to buy) and asked (lowest price anyone is willing to sell) prices. When a stock's bid price, for example, is $8 a share and the asked price is $8 5/8, the spread is 5/8 of a point. If a broker enters a bid to buy at $8 3/8, the bid and ask are now $8 3/8 to $8 5/8, thus the spread has been narrowed to 1/4 of a point.

See: Asked Price; Spread

Narrow Market
Said of a securities market that is characterized by light trading, and larger price fluctuations relative to volume than would be the case if trading is active. A stock is said to be in a narrow market when its price drops more than a point between round lot trades without any obvious reason; this infers a lack in investor interest and too few orders.

See: Thin Market; Tight Market; Volume

NASD (National Association Of Securities Dealers)
A nonprofit membership organization registered with the Securities and Exchange Commission (SEC) under the provisions of the Securities Exchange Act of 1934. Membership is limited and consists mostly of broker-dealers and investment banking houses. Basic goals of the NASD are to:

* Promote just and equitable principles of trade for the protection of investors;
* Adopt, oversee, and enforce rules of fair practice;
* Consult with government and investors on matters of common concern;
* Conduct periodic examinations and audits to ensure solvency and financial integrity among members.

See: Broker-Dealer; Investment Banker; Rules Of Fair Practice; Securities Exchange Act Of 1934; SEC

NASDAQ (National Association Of Securities Dealers Automatic Quotations)
A computerized information network that provides brokers and dealers with price quotations on securities traded over-the-counter. The system has three levels. Level I displays a security's highest bid and lowest offer in the system. Level II displays market maker's quotes for securities in which they make a market. Level III allows market makers to actually enter their quotes into the system. NASDAQ is owned and operated by the NASD. NASDAQ quotes are published in the financial pages of most newspapers.

See: Asked Price; Level I Service Of NASDAQ; Level II Service Of NASDAQ; Level III Service Of NASDAQ; Make A Market; Market Maker; NASD; Over The Counter

National Association of Investment Clubs (NAIC)
Association that helps groups of individuals to establish investment clubs. Members of investment clubs pool their money and make group decisions on how to invest those assets. The NAIC can be contacted by calling (313) 543-0612 or by writing 1515 E. Eleven Mile Rd. Royal Oak, Michigan 48067.

See: Investment Club

National Association Of Securities Dealers (NASD)
A nonprofit membership organization registered with the Securities and Exchange Commission (SEC) under the provisions of the Securities Exchange Act of 1934. Membership is limited and consists mostly of broker-dealers and investment banking houses. Basic goals of the NASD are to:

* Promote just and equitable principles of trade for the protection of investors;
* Adopt, oversee, and enforce rules of fair practice;
* Consult with government and investors on matters of common concern;
* Conduct periodic examinations and audits to ensure solvency and financial integrity among members.

See: Broker-Dealer; Investment Banker; Rules Of Fair Practice; Securities Exchange Act Of 1934; SEC

National Market System (NMS)
An informational system that is part of the NASDAQ system. NMS displays actual transactions, last trade and volume data.

See: Last Sale; NASDAQ; Volume

National Quotation Bureau Inc. (NQB)
Daily service that provides its subscribers bid and asked quotes from market makers in securities traded over-the-counter. Stock quotes are published in Pink Sheets and corporate bonds in Yellow Sheets.

See: Asked Price; Market Maker; Over The Counter; OTC Bulletin Board; Pink Sheets; Yellow Sheets

NAV (Net Asset Value)
An open-ended mutual fund's per share market value. In mutual funds, the net asset value is synonymous with "bid price" and "redemption price". In no load funds, the NAV is also the asked price. They are all one figure. In load funds, the asked price is quoted after the sales charge is added to the net asset value. Most funds compute the NAV after the close of the exchanges each day. It is calculated by taking the closing market value of all securities within the fund plus all other assets (i.e., cash), subtracting all liabilities, then dividing the result (total net assets) by the total number of outstanding shares. The total number of outstanding shares usually varies daily because of redemptions and purchases.

See: Asked Price; Investment Company; Liability; Market Price; Mutual Fund; Open End Management Company; Redemption; Redemption Price

ND (Nothing Done)
In a day order, upon expiring at the end of the day, the status given to the order if it has not been executed.

See: Day Order; Execution

Nearest Month
In options trading or commodity futures, the expiration month that is closest to the current month. For an option that has expiration dates available in September, December, March, and June, for example, the nearest month would be December if a trade was made in November. Nearest month contracts are more heavily traded then "furthest month" contracts.

See: Commodities; Expiration; Futures Contract; Options

Negative Cash Flow
Within an accounting period, a condition in which a business spends more cash than it receives through earnings.

Negative Yield Curve
On securities that are of similar quality, a condition in which yields on short term securities are higher than the yields on long term securities. Typically, short term interest rates are lower than long term rates--those who invest their money for longer periods are taking more risk.

See: Long Term; Positive Yield Curve; Risk; Risk/Reward Ratio; Short Term; Yield; Yield Curve

Negotiable
A security that can be sold--that is, the ownership is transferable by delivery of a security.

See: Delivery; Good Delivery Of Securities

Nest Egg
Assets reserved for a person's retirement. A nest egg is accumulated to assure the retiree with a secure standard of living for the rest of their life. IRAs are considered part of a nest egg.

See: Asset; IRA

Net
The gain or loss from the sale of a security--that is, the difference between the cost to purchase and the sale proceeds.

Net Assets
The difference between a company's total assets and liabilities.

See: Asset; Liability; Net Worth

Net Asset Value (NAV)
An open-ended mutual fund's per share market value. In mutual funds, the net asset value is synonymous with "bid price" and "redemption price". In no load funds, the NAV is also the asked price. They are all one figure. In load funds, the asked price is quoted after the sales charge is added to the net asset value. Most funds compute the NAV after the close of the exchanges each day. It is calculated by taking the closing market value of all securities within the fund plus all other assets (i.e., cash), subtracting all liabilities, then dividing the result (total net assets) by the total number of outstanding shares. The total number of outstanding shares usually varies daily because of redemptions and purchases.

See: Asked Price; Investment Company; Liability; Market Price; Mutual Fund; Open End Management Company; Redemption; Redemption Price

Net Change
Difference between a security's last trading price from the previous day to the next day. However, in the over-the-counter market, the net change in a security is usually the difference between bid prices from the previous day to the next day. For example, XYZ's last trade yesterday was at $34. Today's last trade was at $34 1/2. The net change is +1/2--that is, XYZ's final price on that day was 50 cents higher than the final price on the previous trading day.

See: Closing Price; Over The Counter

Net Income Per Share Of Common Stock

See: Earnings Per Share

Net Investment Income Per Share
In a particular accounting period, the amount of income received by an investment company from dividends and interest (minus any management fees and administrative expenses) divided by the number of outstanding shares. Short term trading profits are treated as dividend income. Net investment income is paid shareholders as a dividend.

See: Dividend; Interest; Investment Company; Management Fee; Short Term

Net Realized Capital Gains Per Share
Net amount (capital gains minus capital losses) that an investment company realized on the sale of securities divided by the number of outstanding shares. An investment company will usually distribute any net gains at least annually. These distributions are treated as long term capital gains to shareholders, regardless of the length of time they have held the investment company shares.

See: Capital Gain; Capital Loss; Investment Company; Long Term

Net Worth
Dollar amount by which assets exceed liabilities. An individual's net worth equals the total value of all possessions (house, stocks, bonds, etc.) minus all outstanding debts (mortgage, credit cards, etc.). For a corporation, net worth is also known as "net assets".

See: Asset; Liability; Net Assets

New Issue
A security being offered to the public for the first time. New issues may be initial public offerings by private companies going public or additional securities of corporations already public. The distribution of new issues are governed by Securities and Exchange Commission rules.

See: Going Public; Initial Public Offering; Underwrite

New York Futures Exchange (NYFE)
A subsidiary of the New York Stock Exchange that concentrates on the trading of financial futures contracts.

See: Futures Contract; Futures Market; New York Stock Exchange

New York Stock Exchange (NYSE)
The oldest and largest stock exchange in the United States--also known as the "Big Board" and "The Exchange". The exchange is a not-for-profit corporation consisting of 1,366 individual members. It is governed by a Board of Directors that is made up of 10 public representatives, 10 exchange members, and a full-time paid chairman and president.

The NYSE does not buy, sell, own or set the prices of securities traded there. The NYSE has operating divisions that are concerned with market operations, member firm regulation and surveillance, finance and office services, product development and planning, and customer relations. The NYSE imposes requirements on corporations who wish to have their securities listed on the exchange.

See: Big Board; Floor; Floor Broker; Floor Trader; Listing Requirements; Post