SMA

SMA

See special miscellaneous account.

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Special Miscellaneous Account

The amount of extra money an investor is allowed to borrow on a margin account. Suppose an investor buys $20,000 worth of securities on margin and places securities worth 50% of the value of the amount as collateral (in this case, $10,000) as required by Regulation T. If those securities increase in value to $13,000, the investor has an extra $3,000 in the margin account he/she did not previously have. This $3,000 is placed in the special miscellaneous account. The investor may use it for a loan of up to $3,000 or may use it to buy up to $6,000 more on margin.

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Simple Moving Average (SMA)

What Does Simple Moving Average (SMA) Mean?

A moving average that is calculated by simply adding the closing price of a security for a number of periods and dividing the total by the number of periods; short-term averages respond quickly to price changes in the underlying securities, whereas long-term averages are slow to react.

Investopedia explains Simple Moving Average (SMA)

Generally, this is the average stock price over a certain period. One should keep in mind that equal weighting is given to each daily price. As shown in the accompanying chart, many traders watch for short-term averages to cross above longer-term averages to signal the beginning of an uptrend. As shown by the arrows, short-term averages (e.g., 15-period SMA) act as levels of support when the price experiences a pullback. Support levels become stronger and more significant as the number of periods used in the calculations increases. The term “moving average” refers to a simple moving average. This is important, especially when one is comparing it with an exponential moving average (EMA).

Related Terms:
• Moving Average—MA
• Resistance
• Support
• Technical Analysis
• Volume