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Related to Markup: markdown


1. The additional price one pays when one buys a security from a broker-dealer. That is, when one buys a security, one pays the broker-dealer an extra percentage or a flat fee as commission. This markup forms the bulk of the broker-dealer's income.

2. See: Spread.

3. The extra amount a retailer charges a customer for a good over and above what it paid the wholesaler. For example, if one pays Wal-Mart $20 for a toaster, and Wal-Mart bought it from the manufacturer for $15, the markup is $5.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


1. An upward revaluation of a security by a dealer because of a rise in the security's market price. For example, a dealer may decide that a markup on a security issue held in inventory is appropriate because of a rising stock market. Compare markdown.
2. See spread.
3. The difference between the price charged by a dealer to a retail customer and the prevailing price at which the same security is being offered by market makers. Compare markdown.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


When you buy securities from a broker-dealer or market maker, you pay a markup. The markup is either a percentage of the selling price or a flat fee, over and above the amount it cost the broker-dealer to purchase the security.

The amount of this markup, or spread, is the broker-dealer's profit and depends in part on the demand for that security or others like it.

For example, if investors are buying up certain types of bonds, a broker-dealer may increase the markup for bonds in that category.

You might say that the broker-dealer acquires the security at wholesale price and sells it to you at retail price. The difference is the markup.

If the markup doesn't appear on the confirmation statement, you can ask the broker-dealer about the markup amount. Or you can compare the prices that different broker-dealers quote for the same security or the price being quoted for the security on the Internet. The differences in price generally reflect the differences in markups.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
If the markup is known and the full cost of the product is known or carefully estimated, it is possible to cal culate the selling price for the product using the formula:
where [Mkup.sub.c,i,t] is a measure of the markup charged by industry i in country c at time t, and [Activity.sub.c,t] is a measure of the fluctuations in GDP of country c at time t, and alternatively of the fluctuations in value added or output of industry i in country c at time t (in all cases measured by their rate of growth).
Third-party money manager markups. Frequently, reps are unaware that they may be paying management fees that are 10 to 15 bps higher than what the fund manager actually charges.
Buzzetti and McGann explain: "It is through markup that textual structures show up explicitly and become processable" (64).
Space Coast Credit Union has created a campaign to help educate consumers about the auto lending practice known as rate markups,
However, this still raises a critical question: What if an adjusted SR continues to reflect demand shocks because one cyclical bias cancels out other biases when adjusting the SR with markup, RTS, and capital utilization?
Finally, we created a dummy variable that equaled one if the service line had a positive markup and zero otherwise.
Similarly, for the US$390 million syndicated loan for Formosa Plastics, the interest rate will be raised from Libor plus a markup of 90 basic points to a markup of 110 basis points.
The first model (Hall-Roeger model) assesses the markup of the whole Greek manufacturing industry over the period 1984-2007.
The chart shows that companies with the highest markups, those in the top 10 percent, raised theirs by over 30 percent since 2000, while markups have been largely flat among the remaining 90 percent of companies.
Also, Barclays "failed reasonably to detect and review whether its markups for certain non-agency RMBS transactions were reasonable," and the firm maintained a compliance system that was designed to "detect transactions with markups above a certain threshold for further review, but that system was defective."
Of particular concern is a rule that reduces notice periods for markups, which give members a chance to vote on amendments and comment on the bill as a whole.