A type of dutch auction that involves a process used to reset the interest payments, or dividends, that are paid on preferred stock or mutual fund shares. The auction usually takes place through an intermediary, and will reset the dividend paid every 49 days (more or less).

Auction market preferred stock is also known as auction rate preferred stock.
|||The auction market preferred stock can be a beneficial investment for larger investors. The auction process will most likely reveal the current market yield for less-risky asset classes, such as preferred stock, and will self-adjust for the effects of alternative investments and inflation.