Markup

Filed Under » ,
Dictionary Says

Definition of 'Markup'

The difference between an investment's lowest current offering price among dealers and the higher price a dealer charges a customer. Markups occur when dealers act as principals (buying and selling securities from their own accounts, at their own risk), as opposed to brokers (receiving a fee for facilitating a transaction).
Investopedia Says

Investopedia explains 'Markup'

Certain securities are available for purchase by retail investors from dealers who sell the securities directly from their own accounts. The dealer's only compensation for the sale comes in the form of the markup, the difference between the price the security was purchased at and the price the dealer charges to the retail investor. The dealer assumes some risk by acting in this capacity, as the market price of the security in his or her inventory could drop before he/she is able to sell to investors.

Note that most dealers are also brokers, and vice versa, so the term broker-dealer is common.

Related Definitions

Search results for

'Markup'

  • The Stock Cycle: What Goes Up Must Come Down

    http://www.investopedia.com/articles/trading/08/stock-cycle-trend-price.asp
    ... Source: TDAmeritrade Strategy Desk. Markup Phase During the markup phase, price
    breaks out of range and begins a sustained uptrend. ... Figure 4: Markup phase. ...

  • Series 63 Study Guide - Registrations of Persons - Broker-Dealer ...

    http://www.investopedia.com/exam-guide/series-63/registration-of-persons/broker-dealer-definition-exclusions.asp
    ... Remember: Agent/Broker/Commission and Principal/Dealer/Markup. An agent ...
    Agent/Broker/Commission and Principal/Dealer/Markup. An agent ...

  • TD Ameritrade Thinkorswim: Commission Structure | Investopedia

    http://www.investopedia.com/university/td-ameritrade-think-or-swim-broker-review/td-ameritrade-think-or-swim-broker-review3.asp
    ... Forex trades work in a similar fashion. The price at which traders can transact
    will include a markup. Therefore, there is no commission ...

  • Series 65 Study Guide - Trading Securities - Account Types ...

    http://www.investopedia.com/exam-guide/series-65/trading-securities/account-types.asp
    ... Markup - this is the compensation received when a broker-dealer is acting as a
    principal and sells a security from its own account to a client - the markup is ...

  • Series 7 Study Guide - Customer Accounts - Costs And Fees ...

    http://www.investopedia.com/exam-guide/series-7/customer-accounts/costs-and-fees.asp
    ... Markup: for shares and bonds that trade over-the-counter (OTC), a market maker
    (essentially a middle man or jobber) buys shares from and sells share to ...

  • Bond Basics: How Do I Buy Bonds? | Investopedia

    http://www.investopedia.com/university/bonds/bonds6.asp
    ... Don't be fooled. What typically happens is that the broker will mark up the price
    slightly; this markup is really the same as a commission. ...

  • What is the quickest, easiest and cheapest way to buy a bond?

    http://www.investopedia.com/ask/answers/08/how-to-buy-a-bond.asp
    ... To determine the markup before purchase, look up the latest quote for the bond and
    use your discretion to decide whether or not the commission fee is a markup ...

  • Getting Into The Gold Market

    http://www.investopedia.com/articles/basics/08/gold-strategies.asp
    ... The main problems with gold bullion are that the storage and insurance costs, and
    the relatively large markup from the dealer both hinder profit potential. ...

  • The Currency Market Information Edge

    http://www.investopedia.com/articles/forex/09/forex-information-currency-market.asp
    ... Large commercial customers get prices from these banks that have a markup embedded
    in them; the markup or margin depends on the size of the customer and the ...

  • Series 63 Study Guide - The Foundation - The Uniform Securities ...

    http://www.investopedia.com/exam-guide/series-63/foundation/usa-uniform-securities-act-part-1.asp
    ... Here's an easy way to remember - just do your ABCs: Agent/Broker/Commission and
    Principal/Dealer/Markup An agent makes trades on behalf of others for ...

Related Articles

Trading Center
Partner Links