DIRECCIÓN GENERAL ESPACIOS VERDES Descripción de Responsabilidades Primarias

state and local

governments

$

Mutual fund

N

N

Naked option

When you write, or sell, a call option but don’t own the underlying instrument, such as a stock in the case of an equity option, the option is described as naked.

Similarly, you write a naked put if you don’t have enough cash on hand or in liquid investments to purchase the underlying instrument.

Because you collect a premium when you sell the option, you may make a profit if the underlying instrument performs as you expect, and the option isn’t exercised.

The risk you run, however, is that the option holder will exercise the option. In the case of a call, you’ll then have to buy the instrument at the market price in order to meet your obligation to sell. Or, if it’s a put, you’ll have to come up with the cash to purchase the instrument.

If that price of the underlying has moved in the opposite direction from the one you expected, meeting your obligation could result in a substantial net loss. Because of this risk, your brokerage firm may limit your right to write naked options or require that you write them in a margin account.

Named perils policy

A named perils policy is a standard homeowners insurance policy that offers limited protection for damage from fire and theft and other hazards specified in the policy.

NASD

NASD is the largest self-regulatory organization (SRO) in the United States.

Formerly known as the National Association of Securities Dealers, NASD regulates broker-dealer firms and licenses registered representatives—better known as stockbrokers—who make a business of trading securities.

In addition, NASD regulates trading in stocks, mutual funds, variable annuities, corporate bonds, and futures and options contracts on securities, and acts as regulator for a number of securities exchanges. NASD also reviews materials that investment companies provide to their clients and prospective clients to ensure those materials comply with the relevant guidelines.

Through its BrokerCheck database, NASD provides a resource for investors to check the credentials of people and firms with whom they’re considering working. The NASD website also provides investor education and alerts on current issues of importance to investors.

Finally, NASD also resolves disputes between broker-dealers and their clients, through either mediation or arbitration. NASD disciplines firms and individuals who violate the rules.

Nasdaq Composite Index

The Nasdaq Composite Index tracks the prices of all the securities traded on the Nasdaq Stock Market.

That makes it a broader measure of market activity than the Dow Jones Industrial Average (DJIA) or Standard & Poor’s 500 Index (S&P 500).

On the other hand, many computer, biotechnology, and telecommunications companies are listed on the Nasdaq. So the movement of the Index is heavily influenced by what’s happening in those sectors.

The Index is market capitalization weighted, which means that companies whose market values are higher exert greater influence on the Index. Market capitalization, or value, is computed by multiplying the total number of existing shares by the most recent sales price.

So, for example, if a stock with 1 million shares increases $3 in value, it has a greater impact on the changing

Naked option

value of the Index than a stock that also increases $3 but has only 500,000 shares.

Nasdaq Stock Market

The Nasdaq Stock Market is the world’s oldest and largest electronic stock market and is now a national securities exchange and an independent self-regulatory organization (SRO).

It has no central trading location or exchange floor. Instead it uses a fully automated, open market, multiple dealer trading system, with many market makers competing to handle transactions in each individual stock.

The most active stock market in the nation, Nasdaq handles more initial public offerings than any other US ex- change. It lists many emerging companies as well as industry giants, especially in biotechnology, communications, financial services, media, retail, technology, and transportation.

National Association of Securities Dealers Automated Quotation System (NASDAQ)

NASDAQ is a computerized stock trading network that allows brokers to access price quotations for stocks being traded electronically or sold on the floor of a stock exchange.

National bank

All banks in the United States are chartered by either a state government or the federal government. Federally chartered banks, called national banks, are overseen by the Comptroller of the Currency of the US Department of the Treasury.

All national banks are members of the Federal Reserve System and deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

The dual banking system of federal- and state-chartered banks can be traced to the National Banking Act of 1863. The act created the new federal bank system in an attempt to impose order on what had been a chaotic situation. State banks have survived, however, and the two banking systems coexist.

National Credit Union Administration (NCUA)

The National Credit Union Administration (NCUA) is an independent federal agency that authorizes the establishment and oversees the administration of most federal- and state-chartered credit unions in the United States.

The National Credit Union Share Insurance Fund arm of the agency insures credit union deposits, just as the Federal Deposit Insurance Corporation (FDIC) does bank deposits.

NCUA is funded by member credit unions and is backed by the full faith and credit of the federal government.