Auction Market Preferred Stock

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Auction Market Preferred Stock (AMPS)

A type of Dutch Auction Preferred Stock (A Merrill Lynch product).

Auction Preferred Stock

A preferred stock with an adjustable dividend that changes every seven weeks according to the results of a Dutch auction. Every preferred stock has a guaranteed dividend; an auction market preferred stock is distinguished by the fact that the amount of its dividends changes from time to time. An auction market preferred stock is beneficial for some investors because the auction reveals the current market yield every seven weeks, which helps in investment decisions on whether to buy, sell, or hold. It is also called an auction rate preferred stock or a Dutch auction preferred stock.
References in periodicals archive ?
Typically, rising short-term rates are accompanied by rising long-term rates, which increase the value of the hedging instruments each Fund holds and allow that Fund to reinvest the hedge gains in more income-producing securities, at least partially offsetting the rising cost of leveraging the Fund with auction market preferred stock.
The Gabelli Dividend & Income Trust (the "Trust") (NYSE:GDV) filed an initial registration statement with the Securities and Exchange Commission for an offering of fixed rate and auction market preferred stock.
Higher short-term rates have increased the cost the Funds must pay on their Auction Market Preferred Stock ("AMPS") used to leverage the Funds and enhance returns.