The dynamic security-constrained dispatch of an electric power network is a difficult task facing an independent system operator mandated to provide equitable and fair transmission services in an open-market environment. In this article, a novel technique based on iterative stability-constrained optimum power flow is proposed. The particle swarm optimization methodology is employed to maximize the social welfare with consideration of static and dynamic functional operating constraints and dynamic loading margin requirements with respect to normal condition and contingencies. Furthermore, since the pattern of load increase is difficult to predict in the new market environment, a new method for determining the sensitive loading direction associated with a dynamic loading margin is proposed. An IEEE 14-bus test system with both supply and demand bidding is used to illustrate and test the proposed technique.