PTI Trader's Glossary

Maintenance Margin:	A set minimum margin (per outstanding futures contract) that a customer must maintain his margin account to retain the futures position.
Managed Account:	*See Discretionary Account.*
Managed Funds Association (MFA):	The trade association for the managed funds industry.
Margin:	See Collateral.
Margin Call:	A call from a clearinghouse to a clearing member, or from a broker or firm to a customer, to bring margin deposits up to a required minimum level.
Mark-to-Market:	To debit or credit on a daily basis a margin account based on the close of that day's trading session. In this way, buyers and sellers are protected against the possibility of contract default.
Market Order:	A trade order executed immediately at the best possible price currently available, that is, "at the market." If you wanted to buy Microsoft using a market order, you could tell your broker, "Buy 100 shares of Microsoft at the market."
Market-on-close (MOC):	Trade orders executed as market orders, but only during the closing of a particular market.
Market-on-open (MOO):	Trade orders executed as market orders, but only during the opening of a particular market.
Marking a Position to Market:	The act of comparing the historic cost of a position to its current market value.
Maximum Price Fluctuation:	*See Price Limit.*
McClellan Oscillator:	The McClellan oscillator measures the momentum of market breadth by calculating the difference between the 40- and 20-day exponential moving averages of daily advancing issues minus declining issues on the New York Stock Exchange (NYSE). The idea behind the indicator is that more stocks will advance than decline in bull markets and vice-versa in bear markets. Generally, markets are considered oversold when the oscillator is below -100, and overbought when it is above +100. The McClellan oscillator is not a stand-alone indicator. It measures the trend strength of advancing and declining issues, and not necessarily market turns. Leadership in a handful of stocks has characterized many bull markets, defying the premise that the broad market must advance for stock indexes to hit new highs.
Measured Move:	A price projection based on previous price swings. The idea is that different legs of a price move will be roughly the same length. For example, if a stock trading at 100 rallies 20 points to 120, then pulls back 5 points to 115, a measured move projection would set a price objective of 135 if and when the rally resumes--another 20 point move from the low of the pullback.
Mediation:	A voluntary process in which the parties to a futures-related dispute work with a neutral third party to find a mutually acceptable solution.
Minimum Price Fluctuation:	*See Tick.*
Momentum:	As a general term, momentum refers to the speed or strength of price movement. It also is the name of a specific technical study that measure the difference between today's closing price and the closing price N days ago. See also Rate of Change.
Moving Average:	Moving averages are calculations that smooth price action to reveal the underlying trend. The following discussion uses daily closing prices to illustrate various moving average calculations. There are several types of moving averages. The most basic is the simple moving average (SMA), which is the sum of closing prices over a particular period divided by the number of days in that period. For example, a five-day simple moving average would be the sum of the closing prices of the five most recent trading days, divided by five; a 20-day moving average would be the sum of the 20 most recent closing prices divided by 20, and so on. Each day the most recent closing price is added to the equation and the most distant day is dropped off. A weighted moving average (WMA), the most simple of which is referred to as a linearly weighted moving average, multiplies closing prices by a weighting factor that emphasizes recent price action. The oldest price in the calculation is multiplied by 1, the second oldest by 2, the third oldest by 3, etc. For example, a standard five-day weighted moving average would multiply the closing price of the fifth most recent trading day (five trading days ago) by one, the fourth most recent trading day by two, the third most recent trading day by three, the second most recent trading day by four, and the most recent trading day by five. These products would be summed and then divided by the sum of the weighting factors (in this case, 1 + 2 + 3 + 4 + 5 = 15) to derive the linearly weighted moving average value for the current day. Other weighting schemes can be used to increase or decrease the emphasis of more recent prices. An exponential moving average (EMA) is actually a specific type of weighted moving average. It uses a constant (a smoothing factor) between 0 and 1 in the following manner: the current closing price (C) multiplied by the smoothing constant (S) added to the product of the previous day's exponential moving average value (PEMA) and 1 minus the smoothing factor, or: *Today's EMA = SC + (1 - S)PEMA* While the description and formula seems somewhat confusing, the approach is actually simpler to calculate than other moving averages because all you need is today's closing price and yesterday's EMA value. Final notes: The preceding descriptions use daily closing prices. Moving averages can, of course, be constructed on intra-day, weekly or monthly time frames, and substituting the open, low, high or average price of a bar for the closing price. One distinct type of moving average is the Adaptive Moving Average (AMA), which dynamically adjusts the number of days in the moving average calculation to current market volatility: In high volatility-periods the number of days would increase (making the average less sensitive and less prone to whipsaws), and in low-volatility periods the number of days would decrease (making the average more sensitive to smaller price swings).