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Glossary to investment terminology : N

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Naked Position
This is holding securities that are not hedged against market risk. Both the potential risk and reward is high. It is rarely a concern for smaller investors but is usually a major concern for large investors.

Narrowing the Spread
This is shortening the gap between the price that a buyer is offering to pay for a share (bid price), and the price a seller is quoting to sell it at (ask price). As the spread narrows, more buyers and sellers join in and the stock is traded more actively. It is also called price improvement.

Narrow Market
This is when the stock market has very few bid and ask offers resulting in low trading activity and low liquidity. It is also called a thin market.

Negative Equity
This is when the value of an asset e.g. shares is less than the loan that was taken to invest in the asset. Negative equity normally results from a decline in the value of an asset after it is purchased.

Nervous Market
This is a stock market that is reacting sharply to economic or political events e.g. change of government.

Net Asset Value
This is the value of one share of a mutual fund or unit trust. It is calculated by subtracting any liabilities from the market value of the assets and dividing by the number of outstanding shares.

Net Change
It is the change in the price of a security on one trading day and that of the previous day. It can be positive or negative.

New Issue
This is a stock or bond issue being offered for sale to the public for the first time.

Also known as market noise and refers to price and volume fluctuations of trade at the stock exchange that can confuse one's interpretation of market direction.

A nominee is a person, bank or stockbroker in whose name securities are transferred in order to facilitate transactions.

Nominee Account
This is a type of account in which a stockbroker holds shares belonging to clients, making the buying and selling of those shares easier.