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- Naive diversification
- A strategy whereby an investor simply invests in a number of different assets and hopes that the variance of the expected return on the portfolio is lowered. Related: Markowitz diversification
- Naked strategies
- An unhedged strategy making exclusive use of one of the following: long call strategy (buying call options), short call strategy (selling or writing call options), long put strategy (buying put options), and short put strategy (selling or writing put options). By themselves, these positions are called naked strategies because they do not involve an offsetting or risk-reducing position in another option or the underlying security. Related: Covered, Hedge option strategies
- National Association of Securities Dealers Automatic Quotation (NASDAQ) System
- An electronic quotation system that provides price quotations to market participants about the more actively traded common stock issues in the OTC market. About 4,000 common stock issues are included in the NASDAQ system.
- National Futures Association (NFA)
- The futures industry self regulatory organization established in 1982.
- Nearby
- The nearest active trading month of a financial or commodity futures market. Related: Deferred futures
- Nearby futures contract
- When several futures contracts are considered, the contract with the closet settlement date is called the nearby futures contract. The next futures contract is the one that settles just after the nearby contract. The contract farthest away in time from settlement is called the most distant futures contract.
- Negative carry
- Related: Net financing cost
- Negative convexity
- A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points.
- Neglected firm effect
- The tendency of firms that are neglected by security analysts to outperform firms that are the subject of considerable attention.
- Net asset value (NAV) per share
- The basis of a mutual fund's share price, which is found by subtracting from the market value of the portfolio the mutual fund's liabilities and then dividing by the number of mutual fund shares outstanding.
- Net financing cost
- Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.
- Net operating margin
- The ratio of net operating income to net sales.
- Next futures contract
- The contract settling immediately after the nearby futures contract.
- No-load fund
- A mutual fund that does not impose a sales commission. Related: Load fund
- Nominal price
- Price quotations on futures for a period in which no actual trading took place.
- Non-cumulative preferred stock
- Preferred stock whose holders must forgo dividend payments when the company misses a dividend payment. Related: Cumulative preferred stock
- Non-parallel shift in the yield curve
- A shift in the yield curve in which yields do not change by the same number of basis points for every maturity. Related: Parallel shift in the yield curve
- Normal portfolio
- A customized benchmark that includes all the securities from which a manager normally chooses, weighted as the manager would weight them in a portfolio.
- Notes
- Debt instruments with maturities of less than 10 years.
- Notice day
- A day on which notices of intent to deliver pertaining to a specified delivery month may be issued. Related: Delivery notice.
- Notional principal amount
- In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.