A type of floating-rate preferred stock whose dividend payments are determined at periodic auctions carried out by the issuer rather than by short-term interest rates. The dividend is reset by Dutch auction where the highest bid is accepted and then the next highest bid, and so on, until a market-clearing price is reached. At this market-clearing price, all the stocks offered for sale will be bought and all the sale transactions will take place at this price.

This stock has a variety of names including: auction rate preferred stock, auction market preferred stock (AMPS), DARTS preferred stock, short-term auction rate (STAR) preferred stock, among others.