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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 ?
The first of these two types of risks, although always associated with market markdowns, is generally more significant when valuation allowances are used; the second may be equally significant with or without such allowances.
Exhibit 2: Value of ending table inventory in Example 1 Cost Retail Cost Ending inventory complement -- RIM LCM Beginning $ 0 $ 0 Inventory Purchases 2,400 4,000 Total $2,400 $4,000 60% Sales (2,250) Permanent (400) markdowns Ending $1,350 $810 inventory
Another manufacturer concurs that every time a retailer charges a vendor for markdowns, they don't spend enough time asking themselves where they went wrong.
Still, advisers should be aware of the costs associated with fixed-income portfolios: the expenses associated with purchasing bonds from a broker-dealer, most notably potentially excessive markups and markdowns which are covered elsewhere in this article.
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.
So far, the markdown strategy has been even more successful than Corel expected.
The markdown on latex gloves was a result of Moore's increased inventory in 1988, when there was a rising demand for the product and extremely limited supplies.
Consistent, large discrepancies indicate poor administration of markdowns by store management.
As a result of the implementation, Body Central is now able to complete markdowns in 50% less time than with the manual method.
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.
Seasonal goods, the second-largest component of the mix with 16% of the total, had the greatest improvement with a 12% increase driven by markdowns.
Cuts as deep as 80 per cent were seen on the high street, with 70 per cent markdowns a common and widely-accepted level of discount.