Glossary

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M

Margin
The required equity that an investor must deposit to collateralize a position.

Market Maker
A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument.

Market Order
An order to buy/sell at the best price available when the order reaches the market.

Margin Call
A request from a broker or dealer for additional funds or other collateral to guarantee performance on a position that has moved against the customer.

Maturity
Date for settlement of the transaction which is decided at the time of entering into the contract.

Money Market
Refers to investments that are short-term (i.e. under one year) and whose participants include banks and other financial institutions. Examples include Deposits, Certificates of Deposit, Repurchase Agreements, Overnight Index Swaps and Commercial Paper. Short-term investments are safe and highly liquid.

Monetary Base
Currency in circulation plus banks' required and excess deposits at the central bank.

Moving Average
A way of smoothing a set of data, widely used in price time series.

Momentum
The tendency of a currency pair to continue movement in a single direction.