Glossary - N
National Association of Securities Dealers Automated Quotation (NASDAQ)
NASDAQ is the second largest stock exchange in the US. Involves many of the US’s high technology stocks.
Negative alpha
See alpha
Negative autocorrelation, negatively autocorrelated
See autocorrelation
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 instrument
A security that can be purchased or sold to another party.
Net asset value (NAV)
The market value of individual units in unit trust or shares in an OEIC. It is calculated each business day by adding the value of all investments in the fund’s portfolio, subtracting expenses, the dividing the result by the number of units or shares issued. This may be different to the share price.
Net profit
The amount remaining once all company expenses has been deducted.
Net relevant earnings
Earnings on which personal pension contributions are based. For the employed, this is usually gross remuneration (including bonuses and other taxable benefits) less any allowable business expenses (for example, professional membership subscriptions paid for by the employer). For the self-employed, they are broadly equivalent to taxable profits.
Net sales
Gross sales less any taxes, returns, allowances, and discounts or rebates given to customers.
New issue
When a company issues new shares into the market. Often used to describe an initial public offering (IPO).
NIKKEI
The index of the 225 leading stocks traded on the Tokyo Stock Exchange.
Nil paid rights
When a rights issue is announced, you receive nil paid rights in your account to indicate your right, but not obligation, to participate in the rights issue. Nil paid rights can be sold in the market, although they have a limited life span. If you decide to take up the rights issue, you can’t sell your nil paid rights.
No-load fund
An OEIC that imposes no initial charge on investors.
Nominal value
Under current UK law, companies must have a nominal or par value. The nominal value of most company shares is 25p. Nominal value is of very little significance to a shareholder, since what matters is the market price of the shares. Shares have no fixed value; they are only worth what others will pay for them.
Nominee
Legal agreement where one person or firm holds shares on behalf of another. The latter person or entity is the beneficial owner.
Non callable / non-call
A security that cannot be redeemed until maturity or a specific future date.
Non optional
A corporate action which shareholders have approved or for which shareholder approval is not necessary. Upon the effective date, all outstanding securities must be exchanged for new securities and/or cash. Also known as a mandatory.
Normal distribution
The most widely occurring frequency distribution. The normal distribution is characterised by its symmetrical bell shape. The mean indicates the position of the centre of the bell, the standard deviation how spread out it is. If a variable is normally distributed, 68.27% of its values will fall within plus or minus one standard deviation of the mean; 95.45% will fall within plus or minus two standard deviations; and 99.73% will fall within plus or minus three standard deviations from the mean. Also known as the Gaussian distribution.
Normal market size
Calculated on the previous year's average daily turnover of each individual stock, and is currently 2.5% of the total volume of shares for each company. Market makers are not obliged to give a quote for a transaction above normal market size.
Notional amount
Size of the contract. Also known as the calculation amount.
