In many cases, margined positions must be backed up by collateral, usually a certain level of cash in the brokerage account. Market capitalization is the total value of a company, measured as share price multiplied by the total number of shares outstanding. Market cap is an important indicator of a company's buying power, since most mergers and acquisitions are often accomplished with stock, not cash. Also known as a specialist. A request to buy or sell securities at the prevailing market price.
Market orders are undefined, and carry no guarantee of being filled at a certain price.
A dangerous type of order when trading volatile stock, market orders may force you to pay too much when you're buying, or accept too little when you're selling. An investment vehicle whereby a money management company pools the assets of its customers' deposits to invest in securities of other companies and entities. Different mutual funds will invest in different types of securities, or have distinct investment objectives and risk tolerance. Mutual funds offer the individual investor instant diversification, since mutual funds typically hold anywhere from 20 up to hundreds of individual securities. The flip side is that mutual funds have annual expenses that are assessed to shareholders.