| asked price | The price at which a dealer will sell asecurity.
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| bid price | The price at which a dealer is willing to purchase a security.
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| bid–asked spread | The difference between a dealer's bid and asked price.
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| block transactions | Large transactions in which at least 10,000 shares of stock are bought or sold. Brokers or "block houses" often search directly for other large traders rather than bringing the trade to the stock exchange.
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| electronic communication network (ECN) | A computer-operated trading network offering an alternative to formal stock exchanges or dealer markets for trading securities.
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| fourth market | Direct trading in exchange-listed securities between one investor and another without the benefit of a broker.
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| initial public offerings | Stock issued to the public for the first time by a formerly privately owned company.
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| inside information | Nonpublic knowledge about a corporation possessed by corporate officers, major owners, or other individuals with privileged access to information about a firm.
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| margin | Describes securities purchased with money borrowed from a broker. Current maximum margin is 50 percent.
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| Nasdaq | The automated quotation system for the OTC market, showing current bid–asked prices for thousands of stocks.
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| over-the-counter market | An informal network of brokers and dealers who negotiate sales of securities (not a formal exchange).
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| primary market | New issues of securities are offered to the public here.
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| private placement | Primary offering in which shares are sold directly to a small group of institutional or wealthy investors.
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| program trading | Coordinated buy orders and sell orders of entire portfolios, usually with the aid of computers, often to achieve index arbitrage objectives.
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| prospectus | A final and approved registration statement including the price at which the security issue is offered.
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| secondary market | Already existing securities are bought and sold on the exchanges or in the OTC market.
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| short sale | The sale of shares not owned by the investor but borrowed through a broker and later repurchased to replace the loan. Profit is earned if the initial sale is at a higher price than the repurchase price.
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| specialist | A trader who makes a market in the shares of one or more firms and who maintains a "fair and orderly market" by dealing personally in the stock.
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| stock exchanges | Secondary markets where already-issued securities are bought and sold by members.
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| third market | Trading of exchange-listed securities on the OTC market.
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| underwriters | Underwriters (investment bankers) purchase securities from the issuing company and resell them. Usually a syndicate of investment bankers is organized behind a lead firm.
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