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Naked Option
An option written (sold) without an underlying hedge position.
Naked Put
The writer of a put option contract who is not short the underlying security.
Naked Warrant
Refers to the warrant, rather than the stock to which the warrant pertains.
Naked Writer
A seller or writer who has sold stock or a stock option contract for stock that he or she does not own. Also referred to as a naked writer.
Narrow Range Day
A trading day with a smaller price range relative to the previous day's price range.
National Association of Securities Dealers, Inc. (NASD)
This is the American self-regulatory organization of the securities industry responsible for the regulation of NASDAQ and the over-the-counter markets.
NAV Per Share
The value of a mutual fund share, calculated by dividing the total net asset value of the fund by the number of shares outstanding.
Nearby
The nearest active trading month of a futures or options on futures contract.
Near-Month Contract/Far-Month Contract
Contract whose expiration is near/far.
Near-the-Money
An option with a strike price close to the current price of the underlying tradable.
Neckline
A trendline drawn along the support or resistance points of various reversal and consolidation pattern (i.e., head and shoulder, double and triple top/bottom formations).
Negative Divergence
When two or more averages, indices or indicators fail to show confirming trends.
Negotiable
A certificate that is transferable by delivery and which, in the case of a registered certificate, has been duly endorsed and guaranteed. Transferable from one party to another.
Negotiable Certificate of Deposit (CD)
An unsecured promissory note issued with a minimum face value of $100,000. It evidences a time deposit of funds with the issuing bank, and is guaranteed by the bank.
Net Asset Value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.
Net Change
The daily change from time frame to time frame. An example would be the change from the close of yesterday to the close of today. The difference between the closing price of a security on the trading day reported and the previous day's closing price. In over-the-counter transactions, the term refers to the difference between the closing bids.
Net Domestic Product
A measure of the annual economic output of a nation adjusted to account for depreciation. It is calculated by subtracting the amount of depreciation from the gross domestic product.
Net Earnings
That part of a company's profits remaining after all expenses and taxes have been paid and out of which dividends may be paid.
Net Income
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.
Net Interest Margin
Net interest income (the difference between interest income and interest expense), on a taxable-equivalent basis, as a percentage of average total assets.
Net Sales
Gross sales less any applicable excise taxes, returns, allowances and discounts or rebates given to customers.
Net Worth (Individual)
The total value of all possessions (stocks, bonds, house, etc.) minus all outstanding debts (mortgage, credit accounts, etc.) Brokerage houses may require that an individual's net worth be at or above a certain dollar level in order to qualify for some high-risk investments.
Netting
The offsetting with a counterparty of financial obligations or payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payment settlements. Netting is also used as a risk management tool to help counterparties reduce their exposure to credit risk.
New Issue
An offering of stocks or bonds sold by a company for the first time.
New York Stock Exchange (NYSE)
The largest stock exchange in the United States. It is a corporation, operated by a board of directors, and it is responsible for setting policy, supervising Exchange and member activities, listing securities, overseeing the transfer of members' seats on the Exchange and judging whether an applicant is qualified to be a specialist.
Noise
Price and volume fluctuations that can confuse interpretation of market direction.
Noisy Signal
A signal in which the effects of random influences cannot be dismissed.
No-Load
Without any sales charge.
No Load Mutual Fund
An open-end investment company, shares of which are sold without a sales charge. There can be other distribution charges. A true "no load" fund will have neither a sales charge nor a distribution fee.
Nominal Interest Rate
The stated interest rate, which does not take inflation into consideration.
Nominal Yield
The interest rate stated on the face of a bond that represents the percentage of interest to be paid by the issuer on the face value of the bond. This amount will not change.
Non-cumulative
A preferred dividend that does not accumulate if unpaid
Nonlinear Dynamics Analysis
Analysis of relationships that start from well-defined outcomes to complex and chaotic results.
Nonlinear Statistics
Statistics theory that attempts to define probability distribution from disorder to either a more orderly state or a sharp trend reversal, such as stock market fluctuations.
Non-Seasonal Autocorrelation
Autocorrelation that shows up other than at 12-month lag intervals.
Non-Trend Day
A narrow range day lacking any discernible movement in either direction.
No Par Stock
Stock that has no stated value on the certificate or on the books of the issuing company. Par value has little meaning in terms of real value.
Normal Distribution
For the purposes of statistical testing, the simulated net returns are assumed to be drawn from a particular distribution. If net returns are drawn from a normal distribution, low and high returns are equally likely, and the most likely net return in a quarter is the average net return.
Normalized
Adjusting a time series so that the series lies in a prescribed normal, standard range.
Normal Yield Curve
A chart showing long-term debt instruments having higher yields than short-term debt instruments.
Norton High/Low Indicator
The Norton High/Low indicator uses results from the Demand Index and the Stochastic study and is designed to pick tops and bottoms on long-term price charts. Two lines are generated: the NLP line and the NHP line. The system also uses level lines at -2 and -3. The NLP line crossing -3 to the downside is the signal that a new bottom will occur in 4-6 periods, using daily, weekly, or monthly data. Similarly, the NHP line crossing -3 to the downside indicates a new top in the same time frame. The indicator tends to be more reliable using longer-term data (weekly or monthly). When either indicator drops below the -3 level, a reversal may be imminent. The reversal (or hook) is the signal to enter the market. For greater reliability, use the Norton High/Low Indicator together with other studies for confirmation.
Note
A short-term debt security, usually maturing in five years or less.
Notice Day
The day that a notice of intent to deliver is issued to a futures contract holder.
Notis %V
A way to measure volatility is to measure the daily ranges between the high and the low. Volatility is high when the daily range is large and low when the daily range is small. The Notis %V study contains two separate indicators. It divides market volatility into upward and downward components (UVLT and DVLT). Both are plotted separately in the same window, and can be plotted as an oscillator. The upward component is also compared to the total volatility (UVLT + DVLT) and expressed as a percentage; thus the name, %V. Volatility can be a key to options trading. A good sense of market volatility can help you avoid those frustrating times when the market moves your way but your option still loses value.
Null Hypothesis
The hypothesis that there is no validity to the specific claim that 2 variations (treatments) of the same thing can be distinguished by a specific procedure.
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