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The amount subtracted from the selling price of securities when they are sold to a dealer in the OTC market. Also, the discounted price of municipal bonds after the market has shown little interest in the issue at the original price.


1. The amount by which a seller reduces a price for a product or asset in order to make it desirable for buyers. See also: Markup.

2. The difference between the price a broker-dealer charges for a retailer to buy a security and the price at which the broker-dealer sells the same security to a market maker. This may or may not be considered a commission.


1. A decrease in a security price made by a dealer because of changing market conditions. For example, a bond trader may take a markdown in long-term bonds held in inventory when market interest rates rise. Compare markup.
2. The difference between the price paid by a dealer to a retail customer and the price at which the dealer can sell the same security to a market maker. Compare markup.


A markdown is the amount a broker-dealer earns on the sale of a fixed-income security and is the difference between the sales price and what the seller realizes on the sale.

The markdown may or may not appear in the commission column or be stated separately on a confirmation statement.

A markdown is determined, in part, by the demand for the security in the marketplace. A broker-dealer may charge a smaller markdown if the security can be resold at a favorable markup.

The term markdown also refers more generally to a reduced price on assets that a seller wants to unload and will sell at less than the original offering price.

References in periodicals archive ?
As a result of the $10 markdown, R's supplier provides Ra$6 per table margin protection payment.
During the fall [1999] season, the company began the implementation of an enhanced markdown strategy that accelerated markdowns and shortens merchandise cycles," Bull wrote in a March 21, 2000 release.
Companies like Procter & Gamble know how dangerous it is to let products fade into the background, so they keep churning the market with jazzy promotions--discount coupons, sweepstakes, trial-size packages, rebates, "new and improved" ingredients, markdowns, special point-of-purchase offers, and the like.
Operations supervisors must be committed to enforcing correct markdown programs.
The Pathfinder replaced Body Central's previous "red pen" price markdown process that was slow and inefficient and often meant markdowns weren't completed on time.
According to FINRA, the banking company had, charged excessive corporate and agency bond mark-ups and markdowns from July 2007 to September 2010.
As an alternative, the IRS stated that the retail-inventory method could achieve the same result by permitting taxpayers to reduce the numerator (the cost of beginning inventory and the cost of purchases) of the cost-to-retail ratio for all non-sales- based allowances, discounts, or price rebates, including markdown allowances, but requiring a reduction of the denominator (the retail selling price of beginning inventory plus the retail selling price of purchases) of the cost-to-retail ratio for all permanent markdowns related to mark-down allowances.
This timely webinar will address the clearance and markdown challenges retailers face and present best practices designed to eliminate excess inventory quickly and profitably, both in a challenging holiday season and throughout the year.
Markdown levels of 70 per cent or more are now widely in use.
Using the traditional "red pen" markdown process, store associates can only complete three garments per minute with 63% accuracy.
a leading provider of on-demand optimization solutions for retailers and consumer products companies, announced that Best Buy , the largest consumer electronics retailer in North America, has purchased DemandTec Markdown.
The luxury retailer said last week that it will reimburse vendors for more than $48 million in improperly collected markdown allowances from 1996 to 2003, as earlier reported by HFN's sister publication Women's Wear Daily.