A preferred stock whose dividend is reset at specified periods based, for example, on the maximum of a set of short- and long-term rates plus or minus a prespecified spread. This stock is unlike a standard preferred stock which pays fixed quarterly dividends. However, prices of Dutch auction rate transferable securities stocks (DARTS preferred stocks) don’t fluctuate much because their dividends are automatically reset to keep the shares selling near to par.

It is also referred to as a floating-rate preferred stock, a variable rate preferred stock, a cumulative auction market preferred stock, and an adjustable rate preferred stock.