FINANCIAL DICTIONARY-S

S
A Nasdaq stock symbol indicating shares of beneficial interest.

S&P Core Earnings
The Standard and Poor's revised version of the measurement of core earnings, which excludes any gains related to pension activities, net revenues from the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option grants, pensions, restructuring of present operations or any merger and acquisition costs, R&D purchases, write-downs of depreciable or amortizable operating assets, and unrealized gains/losses from hedging activities are all included in the core earnings.

S&P Phenomenon
The tendency for a stock that is newly added to the S&P index to temporarily increase in price.

S-3 Filing
The most simplified registration form. It can only be used by companies that have been required to report under the '34 Act for a minimum of twelve months and have met the timely filing requirements set forth under Form S-2.

S-8 Filing
A SEC filing required for companies wishing to issue equity to their employees.

Sacrifice Ratio
An economic ratio that measures the costs associated with slowing down economic output to change inflationary trends. The ratio is calculated by taking the cost of lost production and dividing it by the percentage change in inflation, and its quotient gives the loss of output per 1% change in inflation:

Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. In effect, this gives the target company a "safe harbor."
3. An accounting method that avoids legal or tax regulations and allows for a simpler method (usually) of determining a tax consequence than those methods described by the precise language of the tax code.

Safekeeping
The storage of assets or other items of value in a protected area.
Individuals may use self-directed methods of safekeeping or the services of a bank or brokerage firm. Financial institutions are custodians and are therefore legally responsible for the items in safekeeping.
Also known as "safekeep"

Saitori
A member of the Tokyo Stock Exchange who facilitates the trading of securities by matching buy and sell orders. Their role is to make the market as orderly and efficient as possible.

Salad Oil Scandal
One of the worst corporate scandals of its time. It occurred when Allied Crude Vegetable Oil Company discovered that banks would make loans secured by its salad oil inventory.
When the ships full of salad oil would arrive in the docks, inspectors would test it and confirm that the ship was full of salad oil. However, the company didn't remind anyone that oil floats on water. They had filled salad oil tanks with water and put a few feet of oil on top, fooling everyone. The company would even transfer oil to different tanks while taking inspectors out to lunch. In 1963, the scam was busted and over $175 million worth of salad oil was missing.

Salary Freeze
The action of a company suspending salary increases for a period of time.

Salary-Reduction Contribution
A cash- or deferred-contribution arrangement of an employer-sponsored retirement plan, under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan.

Sale
1) In general, a transaction between two parties where the buyer receives goods (tangible or intangible), services and/or assets in exchange for money.
2) An agreement between a buyer and seller on the price of a security.

Sale and Repurchase Agreement - SRA
An open market operation, implemented by the central Bank of Canada, that is designed to affect overnight interest rates and modify the supply of money.

Sales + Profit Margins + ROE (SMR) Rating
A proprietary rating pioneered by Investor's Business Daily to help investors identify companies with superior Sales Growth, Profit Margins, and Return on Equity ratios.
The SMR Rating data item is one of five Investor's Business Daily SmartSelectÂ® Corporate Ratings. This data item combines into one simple "A" to "E" rating system, four fundamental factors used by analysts:
· Sales growth rate over the last three quarters;
· Pre-tax profit margins;
· After-tax profit margins;
· Return on equity (ROE).
Sales growth and after-tax margins are computed with quarterly figures, while return on equity and pre-tax margins are calculated using annual figures. All four factors take into account acceleration of the variables (rate of increase).
The rating system is weighted in the following manner:
· A = Top 20% (Outperforming over 80% of other stocks)
· B = Next 20% (Outperforming 60%-80% of other stocks)
· C = Next 20% (Outperforming 40%-60% of other stocks)
· D = Next 20% (Outperforming 20%-40% of other stocks)
· E = Bottom 20% (Outperformed by over 80% of other stocks)
NOTE: Stocks will be listed as "N/A" when some or all of the variables used for calculation, are not available.

Sales Charge
A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select the mutual fund best suited to their needs. The term is also used when referring to fees associated with stock and real-estate transactions.

Sales Growth
A company's annual and quarterly rate of increase in revenues (sales). A measure of growth and success as long as it is accompanied by an equally strong rate of increase in earnings per share. You want to see both in a potential investment.

Sales Growth Rate %, 3 Years
Calculated using the least squares fit over the last three years of sales history on a trailing 4-quarter basis. Growth rate will be calculated only if a minimum of 11 quarters of sales exist. Expressed as a percent.

Sales Per Share
A ratio that computes the total revenue earned per share over a 12-month period. It is calculated by dividing total revenue earned in a fiscal year by the weighted average of shares outstanding for that fiscal year:

Also known as "revenue per share".

Sales Tax
A tax imposed by the government at the point of sale on retail goods and services. It is collected by the retailer and passed on to the state.

Sales to Cash Flow Ratio
A measure of whether or not a company's sales are high in comparison to its cash flow.
Calculated as:

Sales, Percentage Change
Percentage change in sales compared to the same quarter of the previous year. Figures in blue are equal to, or greater than sales from prior year quarter, whereas figures in red indicate a decrease in sales.

Sales, Quarterly Comparison
Most recent quarterly sales amount versus sales amount of same quarter in the previous year.

Sallie Mae - Student Loan Marketing Association
A publicly traded company that is the largest provider of educational loans in the U.S. Along with providing student loans, Sallie Mae purchases student loans from the original lenders and provides financing to state student-loan agencies.

Salomon Brothers World Equity Index - SBWEI
An index that measures the performance of fixed-income and equity securities from domestic and international markets that consist of companies with a float of at least $100 million.

Salvage Value
The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. The value can be a best guess of the end value or can be determined by a regulatory body such as the IRS.

Salvage Value
The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. The value can be a best guess of the end value or can be determined by a regulatory body such as the IRS.

Same-Day Substitution
An offsetting change in a margin account, made over the trading day, that results in no overall change in the value of the account. When a same-day substitution is made, a margin call is not generated.

Samurai Bond
A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations. Other types of yen-denominated bonds are Euroyens issued in countries other than Japan.

Sandbag
A stalling tactic used by management to deter a company that is showing interest in taking them over.

Sandwich Generation
The generation of middle-aged individuals who are pressured to support both aging parents and growing children

Sanku (Three Gaps) Pattern
The Japanese word for a candlestick pattern that consists of three individual gaps located within a well-defined trend. After the appearance of the third gap, the pattern is used to suggest an impending reversal in the direction of the current trend.

Santa Claus Rally
A surge in the price of stocks that often occurs in the week between Christmas and New Year's. There are numerous explanations for this phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses, and the fact that the pessimists are usually on vacation this week.

SAR
In currencies, this is the abbreviation for the Saudi Riyal.

Sarbanes-Oxley Act Of 2002 - SOX
An act passed by U.S. Congress to protect investors from the possibility of fraudulent accounting activities by corporations.

Saturday Night Special
A slang term used to refer to a surprise takeover attempt.

Saucer
A technical charting formation that indicates that a stock's price has reached its low and that the downward trend has come to a close.

Savings
According to Keynesian economics, the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time.

Savings Account
A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates.

Savings Incentive Match Plan for Employees of Small Employers - SIMPLE
A retirement plan that may be established by employers, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SIMPLE. The employer makes either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions.

SBD
In currencies, this is the abbreviation for the Solomon Islands Dollar.

SBO-401(k)
A tax-deferred, government-registered retirement savings plan that is specially designed for small business owners (SBOs). Eligible participants are businesses that employ the business's owners and their spouses. The business must not have any other eligible employees.

Scale Order
A type of order that comprises several limit orders at incrementally increasing or decreasing prices. If it is a buy scale order, the limit orders will decrease in price, triggering buys at lower prices as the price starts to fall. With a sell order, the limit orders will increase in price, allowing the trader to take advantage of increasing prices, thereby locking in higher returns.

Scalpers
A person trading in the equities or options and futures market who holds a position for a very short period of time, attempting to make money off of the bid-ask spread.

Scalping
A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.

Scarcity
The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.

Schedule 13D
An form that must be filed with the SEC under Rule 13D when a person or group acquiring more than 5% of any class of a company's shares to disclose this information within 10 days of the transaction. Rule 13D requires the owner to also disclose any other person who has voting power or the power to sell the security.

Schedule 13G
An SEC form similar to the Schedule 13D used to report a party's ownership of stock that is over 5% of the company. Schedule 13G is shorter and requires less information from the filing party. Ownership of over 5% in a publicly-traded stock is considered to be significant ownership, and therefore must be reported to the public

Schedule D
A U.S. income tax form used by taxpayers to report their realized capital gains or losses. Investors are required to report their capital gains (and losses) from the sales of assets, which result in different cash values being received for them than what was originally paid, in order to affix some amount of taxation to the income and wealth that is generated through investment activities.

Scorched Earth Policy
An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring firm.

SCR
In currencies, this is the abbreviation for the Seychelles Rupee.

Screen Of The Day
Each day, we screen our database to generate a timely list of stocks that meet key criteria. This respected database of over 10,000 stocks is used by more than 400 of today's leading institutional money managers. Many of these screens will feature unique ratings and measurements exclusive to this database.

Scrip
1. A written document that acknowledges a debt.
2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of full shares.
3. Currency issued by a private corporation

Scrip
1. A written document that acknowledges a debt.
2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of full shares.
3. Currency issued by a private corporation

Scripophily
The hobby of collecting antique bonds, stocks, and other financial instruments based upon their esthetics and prominence in the financial world.

SDD
In currencies, this is the abbreviation for the Sudanese Dinar.

SDP
In currencies, this is the abbreviation for the Sudanese Pound.

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Seasonality
A characteristic of a time series in which the data experiences regular and predictable changes which recur every calendar year. Any predictable change or pattern in a time series that recurs or repeats over a one-year period can be said to be seasonal.
Note that seasonal effects are different from cyclical effects, as seasonal cycles are contained within one calendar year, while cyclical effects (such as boosted sales due to low unemployment rates) can span time periods shorter or longer than one calendar year.

Seasonally Adjusted Annual Rate - SAAR
A rate adjustment used for economic or business data that attempts to remove the seasonal variations in the data. Most data will be affected by the time of the year. Adjusting for the seasonality in data means more accurate relative comparisons can be drawn from month to month all year.

Seasoned Issue
An issue of securities from an established company whose existing shares have exhibited stable price movements and substantial trading volume over time, thereby earning a good reputation.

Seasons
A slang phrase used by venture capitalists to refer to the current stage of a proposed business idea or concept.
The progression is spring (infancy), summer (adolescence), fall (maturing), winter (mature).

Seat
Membership to the NYSE

SEC Fee
A nominal fee that was created by the Securities Exchange Act of 1934 to be an additional transaction cost attached to the selling of exchange-listed equities. This fee is usually listed as a separate fee, independent of any associated brokerage commissions or fees.
Up until 2007, the fee is 1% of one three-hundredth of the dollar value of the equities sold. After 2007, the fee will be 1% of one eight-hundredth of the dollar value of the equities sold.

SEC Release IA-1092
A release from the Securities & Exchange Commission (SEC) that provides uniform interpretations of how state and federal advisor laws would apply to people providing financial services.

SEC Yield
A standard yield calculation developed by the Securities and Exchange Commission (SEC) that allows for fairer comparisons of bond funds. It is based on the most recent 30-day period covered by the fund's filings with the SEC. The yield figure reflects the dividends and interest earned during the period, after the deduction of the fund's expenses. This is also referred to as the "standardized yield."

Second-to-Die Insurance
A type of life insurance on two people (usually married) that provides benefits to the heirs only after the last surviving spouse dies. This differs from regular life insurance in that the surviving partner doesn't receive any benefits after their spouse dies. Thus, second-to-die insurance is used for estate planning.

Secondary Market
A market on which an investor purchases an asset from another investor rather than an issuing corporation.

Secondary Offering
1. The issuance of new stock for public sale from a company that has already made its initial public offering (IPO). Usually, these kinds of public offerings are made by companies wishing to refinance, or raise capital for growth. Money raised from these kinds of secondary offerings goes to the company, through the investment bank that underwrites the offering. Investment banks are issued an allotment, and possibly an overallotment which they may choose to exercise if there is a strong possibility of making money on the spread between the allotment price and the selling price of the securities.
2. A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The proceeds of this sale are paid to the stockholders that sell their shares. Often, the company that issued the shares holds a large percentage of the stocks it issues.

Secondary Stock
A stock that is considered riskier than blue chips because it has a smaller market capitalization.

Section 1031
A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged upon sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.

Section 1035 Exchange
A tax-free exchange of an existing annuity contract for a new one.

Section 1245
A part of the IRS code stating that depreciable property that has been sold at a price in excess of depreciated or salvage value may qualify for favorable capital-gains tax treatment.

Section 1250
A section of the IRS code stating that a gain from selling real estate that has been subjected to accelerated depreciation should be treated as ordinary income instead of a capital gain.

Sector
Consist of a number of similar industry groups. Sectors are broader than industries. For instance, the high-tech or consumer sector can include several different industries.

Sector Charts
Found on the 'General Markets & Sectors' page of Investor's Business Daily, these charts show the last three months percentage increase for the leading sectors. Sector charts are useful in determining the strength of each sector.

Sector Fund
An investment fund that makes investments solely in businesses that operate in a particular industry or sector of the economy.

Sector Rotation
The action of a mutual fund or portfolio manager shifting investment assets from one sector of the economy to another.

Secular
An adjective used to describe a long-term time frame, usually at least 10 years.

Secured Bond
A type of bond that is secured by the issuer's pledge of a specific asset, which is a form of collateral on the loan. In the event of a default, the bond issuer passes title of the asset or the money that has been set aside onto the bondholders. Secured bonds can also be secured with a revenue stream that comes from the project that the bond issue was used to finance.

Secured Card
A type of credit card that is backed by a savings account used as collateral on the credit available with the card. Money is deposited and held in the account backing the card. The limit will be based on both your previous credit history and the amount deposited in the account. The limit as a percent of the deposit tends to range between 50% and 100%.

Secured Debt
Debt backed or secured by collateral to reduce the risk associated with lending. An example would be a mortgage, your house is considered collateral towards the debt. If you default on repayment, the bank seizes your house, sells it and uses the proceeds to pay back the debt.

Secured Note
A bilateral lending agreement, the note represents a contractual obligation to lend and borrow money at a specified interest rate.

Securities Act of 1933
A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets.

Securities And Exchange Board Of India - SEBI
The regulatory body for the investment market in India. The purpose of this board is to maintain stable and efficient markets by creating and enforcing regulations in the market place.

Securities And Exchange Commission - SEC
A government commission created by Congress to regulate the securities markets and protect investors. In addition to regulation and protection, it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appointed by the U.S. President and approved by the Senate. The statutes administered by the SEC are designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce, through the mail or on the internet, must be registered with the SEC.

Securities Exchange Act Of 1934
The Securities Exchange Act of 1934 was created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect the investing public.

Securities Investor Protection Corporation - SIPC
A nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy. Members to the SIPC include all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members.

Securities Lending
When a brokerage lends securities owned by its clients to short sellers.

Securities Transfer Association Medallion Program - STAMP
A verification system used by many different institutions to authorize and guarantee the individual signatures applied to securities requiring transfers.

Securitization
The process of creating a financial instrument by combining other financial assets and then marketing them to investors.

Securitize
The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. When it sells the debt to the third party, the company recognizes the sale price of debts as a positive cash flow under GAAP rules.

Security
An instrument representing ownership (stocks), a debt agreement (bonds), or the rights to ownership (derivatives).

Security Analyst
A financial professional who studies various industries and companies, providing research and valuation reports, and making buy, sell, and hold recommendations.

Security Market Line - SML
The line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities.

Seed Capital
The initial equity capital used to start a new venture or business.

Segregated Fund
A type of annuity that is similar to a mutual fund, and is an insurance product and offered only by insurance companies.

Seigniorage
The difference between the value of money and the cost to produce it - in other words, the economic cost of producing a currency within a given economy or country. If the seigniorage is positive, then the government will make an economic profit; a negative seigniorage will result in an economic loss.

SEK
In currencies, this is the abbreviation for the Swedish Krona.

Self-Directed RRSP
A type of RRSP (Registered Retirement Savings Plan) whose owner determines the asset mix held in the trust. An RRSP is a Canadian retirement savings vehicle to which contributions are tax deductible on an annual basis, up to a certain amount. With a self-directed RRSP, an investor can determine the portfolio of investment products in his or her RRSP. Investments that are not RRSP eligible, however, are sill not allowed in a self-directed RRSP.

Self-Employment Tax
A tax imposed on self-employed people, who must pay this tax in order to receive social-security benefits upon retirement.

Self-Regulatory Organization - SRO
A non-government organization that has the power to create and enforce industry regulations and standards. The priority is to protect investors through the establishment of rules that promote ethics and equality.

Sell
1. A recommendation to sell a particular security.
2. The process of liquidating an asset in exchange for money.

Sell Plus
An order to sell a stock at a price above the current market price.

Sell Side
The retail brokers and research departments that sell securities and make recommendations for brokerage firms' customers.

Sell To Close
A phrase used by many brokerages on the street to represent the closing of a long position in option transactions.

Sell To Open
A phrase used by many brokerages on the street to represent the opening of a short position in option transactions.

Sell To Open
A phrase used by many brokerages on the street to represent the opening of a short position in option transactions.

Sell-Off
The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the value of the security.

Sell-Out
When a broker or investor buying stocks has failed to settle the trade in a timely manner and, as a result, the broker can forcibly sell the securities on the investor's behalf.

Seller
1. An individual or entity that exchanges any type of good or service in return for payment.
2. In the option market, the seller is the investor who collects a premium from the buyer in return for taking on the risk associated with holding a short position in an option. The seller of an option is also known as a "writer".

Seller's Call
An agreement between a buyer and a seller for a specific grade and quantity of commodity that allows a period of time for the seller to set the price a fixed number of points above (or below) a specified delivery month's futures price.
Seller's Market
A market condition characterized by a shortage of goods available for sale.

Seller's Option
The right of a forward contract seller to choose some of the specifications of a commodity to be delivered. The choices about the delivered commodity's quality and delivery specifications must fit among the limits imposed by the terms of the contract.
Seller's option can also refer to a put option.

Selling Away
When a broker solicits you to purchase securities not held or offered by the brokerage firm. As a general rule, such activities are a violation of securities regulations.

Selling Group
All financial institutions involved in selling or marketing a new issue of debt or equity but not necessarily participating in the underwriting consortium.

Selling Hedge
A hedging strategy with which the sale of futures contracts are meant to offset a long underlying commodity position. Also known as a "short hedge."

Selling Hedge
A hedging strategy with which the sale of futures contracts are meant to offset a long underlying commodity position. Also known as a "short hedge."

Selling Into Strength
A proactive trading strategy carried out by selling out of a long or into a short position when the price of the asset being traded is still rising but is expected to reverse in price. Opposite of "buying into weakness".

Selling, General & Administrative Expense - SGA
Reported on the Income Statement, it is the sum of all direct and indirect selling expenses and all general and administrative expenses of a company.
Direct selling expenses are expenses that can be directly linked to the sale of a specific unit such as credit, warranty and advertising expenses. Indirect selling expenses are expenses which cannot be directly linked to the sale of a specific unit, but which are proportionally allocated to all units sold during a certain period, such as telephone, interest and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, heat and lights.

Semi-Strong Form Efficiency
A class of EMH (Efficient Market Hypothesis) that implies all public information is calculated into a stock's current share price. Meaning that neither fundamental nor technical analysis can be used to achieve superior gains.

Semi-Variable Cost
A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded. Also known as a "semi-fixed cost."

Semiannual
An event that occurs twice in a calendar year

Semiconductor
Another word for "chip." A semiconductor is a material such as silicon, which conducts electrical charges but not as well as metals such as copper and aluminum.

Senior Debt
A bond or other form of debt that takes priority over other debt securities sold by the issuer.

Senior Security
A security (usually debt) that, in the event the issuer goes bankrupt, must be repaid before other creditors receive any payment.

Sensex
An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India.

Sensitivity
The magnitude of a financial instrument's reaction to changes in underlying factors. Financial instruments, such as stocks and bonds, are constantly impacted by many factors. Sensitivity accounts for all factors that impact a given instrument in a negative or positive way in an attempt to learn how much a certain factor will impact the value of a particular instrument.

Sensitivity Analysis
A technique for determining the outcome of a decision if a key prediction turns out to be wrong.

Sentiment Indicator
A general term used to describe indicators that gauge investor attitudes toward the market.

Separate Account
1. A privately managed investment account opened through a brokerage or financial advisor that uses pooled money to buy individual assets.
2. In the context of variable annuities, these are payments made to an insurance company for the purpose of investing in securities. These securities are kept separate from the insurer's general investments.

Serial Bond
A bond issue in which a portion of the outstanding bonds matures at regular intervals until eventually all of the bonds have matured. As they mature gradually over a period of years, these bonds are used to finance a project providing regular, level or predictable income streams. Serial bonds are also used to finance projects with regular, level debt payments such as residential developments

Serial Bond With Balloon
A combination of a serial bond issue and a term bond issue. Essentially, the serial bond with balloon has bonds that mature at different intervals throughout the issue's life, and then a large percentage of the bonds (the term bonds) mature in the last year of the issue's term. Alternatively, the bulk of the bonds may mature at the first maturity date with the rest of the bonds gradually maturing over the remainder of the issue's life.

Series 11
A securities license for sales assistants who also take unsolicited securities orders for customers.

Series 24
A securities license entitling the holder to supervise and manage branch activities. Before taking the Series 24 exam, you must have your Series 7 license.

Series 26
A securities license entitling the holder to supervise and manage sales activities for investment companies and annuity activities.

Series 27
A securities license entitling the holder to become a chief financial officer for a NASD member firm.

Series 3
A securities license entitling the holder to sell commodities or futures contracts.

Series 30
A securities license entitling the holder to become a futures branch office manager

Series 31
A securities license entitling the holder to sell managed futures(funds).

Series 4
A securities license entitling the holder to supervise options sales personnel and compliance issues. Before taking the Series 4 exam, you must have your Series 7 license.

Series 55
A securities license entitling the holder to actively participate in equity trading.

Series 6
A securities license entitling the holder to sell mutual funds and variable annuities.

Series 63
A securities license entitling the holder to solicit orders for any type of security in a particular state. This license is required in addition to the Series 7 or Series 6.

Series 65
A securities license required by most U.S. states for individuals that act as an investment advisor.

Series 66
An exam administered by the North American Securities Administrators Association. Successful completion of the Series 66 exam is equivalent to successful completion of both the Series 63 and Series 65 exams.

Series 7
A general securities registered representative license, it entitles the holder to sell all types of securities products with the exception of commodities/futures (which requires a Series 3 license).

Series 9/10
A securities license entitling the holder to supervise branch activities. Before taking the Series 9/10 exam, you must have your Series 7 license.

Series A - Preferred Stock
The first round of stock offered to the venture capitalist in the early stages of a startup. This stock is convertible into common stock if the company goes public or is sold.

Series EE Bond
A non-marketable, interest-bearing U.S. government savings bond issued at a discount from par.

Series HH Bond
A non-marketable, interest-bearing U.S. government savings bond issued at par and acquired only by exchanging Series EE bonds.

Series I Bond
A non-marketable, interest-bearing U.S. government savings bond that is a combination of two separate rates:
1) Fixed Interest Rate
2) Variable Inflation Rate (adjusted semiannually)

Settlement Date
1. The date by which an executed security trade must be settled. That is, the date by which a buyer must pay for the securities delivered by the seller.
2. The payment date of benefits from a life insurance policy.

Settlement Price
The average price at which a contract trades, calculated at both the open and close of each trading day.

Settlement Risk
The risk that one party will fail to deliver the terms of a contract with another party at the time of settlement. Settlement risk can be the risk associated with default at settlement and any timing differences in settlement between the two parties. This type of risk can lead to principal risk.

Settlement Statement
A statement that summarizes all the fees and charges that both the homebuyer and seller face during the settlement process of a housing transaction. This form, which is under the jurisdiction of the U.S. Department of Housing and Urban Development, is also known as the HUD-1.

Settling Price
The price used daily by clearing houses to clear all trades and settle accounts between clearing members. Also commonly referred to as "settlement price."

Severability
A clause in a contract that allows for the terms of the contract to be independent of one another, so that if a term in the contract is deemed unenforceable by a court, the contract as a whole will not be deemed unenforceable. If there were no severability clause in a contract, a whole contract could be deemed unenforceable because of one unenforceable term.
Also known as a "severability clause" or a "savings clause".

Severance Pay
Compensation that an employer gives to someone who is about to lose his or her job.

SGD
In currencies, this is the abbreviation for the Singapore Dollar.

Shadow
A small line found on a candle in a candlestick chart that is used to indicate where the price of a stock has fluctuated relative to the opening and closing prices. Essentially, these shadows illustrate the highest and lowest prices at which a security has traded over a specific time period.

Shadow Open Market Committee - SOMC
A committee created by two university professors, from Rochester and Carnegie Mellon, in the early 1970's. The committees purpose is to evaluate the policy and actions of the FOMC.

Shadow Pricing
The arbitrary assignment of dollar values to non-marketed goods.

Shadow Rating
1. The name given to a bond rating performed on an issuing party by a credited institution, but without any public announcement of the results.
2. A rating given by S&P to Israel Bonds, which are not permitted to be traded on the secondary marke

Shakeout
A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry.

Share Capital
The portion of a corporation's equity obtained from issuing shares in return for cash or other considerations.

Share Premium Account
Usually found on the balance sheet, this is the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share.

Shares Held by Banks
Represents the percentage of stock owned by institutional banks. This amount is based on the floating supply of stock (total shares outstanding less insider positions and percent held by management). This information is reported quarterly by approximately 250 banks

Share Purchase Rights
A type of security that gives the holder the option, but not the obligation, to purchase a predetermined number of shares at a predetermined price, similar to a stock option or warrant. These rights are typically distributed to existing shareholders, who have the ability to trade these rights on an exchange.

Share Repurchase
A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued.

Share Turnover
A measure of stock liquidity calculated by dividing the total number of shares traded over a period by the average number of shares outstanding for the period. The higher the share turnover, the more liquid the share of the company

Shareholder
Any person, company, or other institution that owns at least 1 share in a company. A shareholder may also be referred to as a stockholder.

Shareholder Activist
A person who attempts to use his or her rights as a shareholder of a publicly-traded corporation to bring about social change. Some of the issues most often addressed by shareholder activists are related to the environment, investments in politically sensitive parts of the world and workers' rights (sweatshops).
The term can also refer to investors who believe that a company's management is doing a bad job and who attempt to gain control of the company and replace management for the good of the shareholders.
Shareholder Activist
A person who attempts to use his or her rights as a shareholder of a publicly-traded corporation to bring about social change. Some of the issues most often addressed by shareholder activists are related to the environment, investments in politically sensitive parts of the world and workers' rights (sweatshops).
The term can also refer to investors who believe that a company's management is doing a bad job and who attempt to gain control of the company and replace management for the good of the shareholders.

Shareholder Equity Ratio
A ratio used to help determine how much shareholders would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders' equity by total assets of the firm, and it represents the amount of assets on which shareholders have a residual claim. The figures used to calculate the ratio are taken from the company's balance sheet.

Shareholder Services Agent
A financial institution or similar entity responsible for looking after the needs of the shareholders of publicly-traded corporations or mutual funds. Shareholder services agents typically look after investor record-keeping and communication and other administrative responsibilities, and they attend to shareholders' problems or concerns.

Shareholder Value Added - SVA
A value-based performance measure of a company's worth to shareholders. The basic calculation is net operating profit after tax (NOPAT) minus the cost of capital from the issuance of debt and equity, based on the company's weighted average cost of capital:

Shareholder Value Transfer - SVT
A measurement of the amount of shareholders' equity flowing out of a company to its executives through exercised stock options.

Shareholders' Equity
A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity represents the amount by which a company is financed through common and preferred shares.

Also known as "share capital", "net worth" or "stockholders' equity".

Shark Repellent
Any number of measures taken by a corporation to discourage an unwanted takeover attempt.

Shark Watcher
A firm specializing in the early detection of takeovers. The firm's primary business is usually the solicitation of proxies for client corporations.

Sharpe Ratio
A ratio developed by Nobel Laureate Bill Sharpe to measure risk-adjusted performance. It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns.

Sheep
An investor who lacks a focused trading strategy and trades on emotion and the suggestions of others, including friends, family and financial gurus. This type of investor often makes rash investments without reviewing their financial viability. The behavior of sheep contrasts with that of bulls and bears, who have focused views about the market.

Shelf Offering
An SEC provision allowing an issuer to register a new issue security without selling the entire issue at once.

Shelf Registration
A term used for the SEC rule 415, which allows a corporation the ability to comply with registration requirements up to 2 years before doing a public offering. The corporation must still file the required annual and quarterly reports to the SEC.

Shell Corporation
A corporation without active business operations or significant assets.

Shingle Theory
A suitability doctrine first introduced by the Securities and Exchange Commission in the 1930s. The idea is that a broker who hangs out a shingle will represent his or her customers fairly and responsibly when making suggestions regarding securities.

Shipping Certificate
An instrument used by futures exchanges as a negotiable commitment by an approved delivery facility to transfer the underlying commodity to the holder of the certificate under the prescribed terms.

Shock Absorber
A temporary restriction placed on the trading of index futures because of substantial intraday decreases in the underlying indexes.

Shogun Bond
A type of foreign-currency denominated bond that is issued in Japan by foreign entities. Organizations such as the World Bank have issued such debt instruments in the past .
Also known as a "geisha bond".

Shooting Star
A type of candlestick formation that results when a security's price, at some point during the day, advances well above the opening price but closes lower than the opening price.

Short (or Short Position)
1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
2. In the context of options, it is the sale (also known as "writing") of an options contract.
Opposite of "long (or long position)".

Short And Distort
A buzzword describing an illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and other kinds of unverified bad news in an attempt to drive down the equity's price and realized a profit.

Short Covering
The purchase of shares previously sold short in order to close the open position.

Short Form Prospectus Distribution System - SFPDS
A system that allows firms making an issue to produce a short form prospectus. The short form prospectus must contain any material changes not previously reported.

Short Interest
The total number of shares of a security that have been sold short by customers and securities firms.

Short Form Prospectus Distribution System - SFPDS
A system that allows firms making an issue to produce a short form prospectus. The short form prospectus must contain any material changes not previously reported.

Short Interest
The total number of shares of a security that have been sold short by customers and securities firms.

Short Interest
The total number of shares of a security that have been sold short by customers and securities firms.

Short Interest Ratio
Indicates the number of days it would take short-sellers to cover their positions.

Short Interest Theory
The theory that a large short interest is the predecessor of a rise in the price of a stock.

Short Market Value
The total value of all short sales in place in a customer's account at the end of the trading day.

Short Run
A period of time in which the quantity of some inputs cannot be increased beyond the fixed amount that is available.

Short Sale
A market transaction in which an investor sells borrowed securities in anticipation of a price decline and is required to return an equal amount of shares at some point in the future.
The payoff to selling short is the opposite of a long position. A short seller will make money if the stock goes down in price, while a long position makes money when the stock goes up. The profit that the investor receives is equal to the value of the sold borrowed shares less the cost of repurchasing the borrowed shares.

Short Sale Rule
A SEC rule requiring short sales to be made only on a plus tick or zero plus tick.

Also called the "plus tick rule" or the "tick-test rule".

Short Sell Against the Box
The act of short selling securities that you already own. This results in a neutral position where your gains in a stock are equal to the losses. For example, if you own 100 shares of ABC and you tell your broker to sell short 100 shares of ABC, you have shorted against the box. An alternative way to short selling against the box is to buy a put on your stock. This may or may not be less expensive than doing the short sale. Also known as "shorting against the box".

Short Selling
The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Short Squeeze
A situation in which a lack of supply and an excess demand for a traded stock forces the price upward

Short Straddle
An options strategy carried out by holding a short position in both a call and a put that have the same strike price and expiration date. The maximum profit is the amount of premium collected by writing the options.

Short Term
1. In general, holding an asset for short period of time.
2. In accounting, an asset expected to be converted into cash in the next year, or a liability coming due in the next year. Also known as current assets and liabilities.
3. For investing, a security that matures in one year or less.
4. For taxes, a holding period of less that one year.

Short the Basis
A futures strategy involving the purchase of a futures position to hedge against a future commitment to deliver the underlying commodity.

Short-Swing Profit Rule
A Securities & Exchange Commission regulation that requires company insiders to return any profits made from the purchase and sale of company stock if both transactions occur within a six-month period. A company insider, as determined by the rule, is any officer, director or holder of more than 10% of the company's shares

Short-Term Investment Fund - STIF
A type of fund that invests in short-term investments of high quality and low risk. The goal of this type of fund is to protect capital with low-risk investments while achieving a return that beats a relevant benchmark such as a Treasury bill index.

Shortfall
The amount by which the capital required to fulfill a financial obligation exceeds available capital.

Shotgun Clause
A buy-sell provision used by related parties in a business venture which gives an investor within the partnership the right to offer his/her portion to a partner at a specified price. If the partner does not buy the offered interest at this price, the partner must then sell his/her own interest to the offering party at the same specified price.

Shout Option
An exotic option that allows the holder to lock in a defined profit while maintaining the right to continue participating in gains without a loss of locked-in monies.

SHP
In currencies, this is the abbreviation for the St. Helana Pound.

Shrinkage
The amount by which inventory on hand is shorter than the amount of inventory recorded.

Sideways Market
A situation in which stock price changes little over a period of time.

Sight Letter of Credit
A letter of credit that is payable once it is presented along with the necessary documents.

Signaling Approach
The idea that insiders have information not available to the market. Moves made by insiders can signal information to outsiders and change the stock price.

Signature Guarantee
A form of authentication issued by a bank or other financial institution that verifies the legitimacy of a signature and the signatory's overall request. This type of guarantee is often used in situations where financial instruments are being transferred. In most cases, the guarantor accepts all consequences in the event that the signature is fraudulent.

Significant Order
An order to buy or sell a security that, due to its abnormally large size, has the potential to have a significant effect on a security's price.

Silent Partner
An investor who does not have any management responsibilities but provides capital and shares liability for any losses experienced by the entity.

Silicon Valley
Nickname for the region in North California (around San Jose) that contains a huge concentration of computer and Internet companies.

Siliconaires
Slang referring to young dotcom entrepreneurs in their 20s and 30s who found themselves suddenly rich due to stock options from their Silicon Valley Internet companies

Silver
An element commonly used in jewelry, coins, electronics, and photography. Silver has the highest electrical conductivity of any metal.

Silver Parachute
A form of severance that is paid to employees of a company should the company be taken over by another.

Simple Moving Average - SMA
A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react.

Simplified Employee Pension - SEP (Simplified Employee Pension IRA)
A type of retirement plan that an employer can establish, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SEP Plan. The employer makes contributions to each eligible employee's SEP IRA on a discretionary basis.

Sine Wave
An geometric waveform that oscillates (moves up, down or side-to-side) periodically, and is defined by the function y = sin x. In other words, it is an s-shaped, smooth wave that oscillates above and below zero.

Sinful Stock
Stock from companies that are associated with (or are directly involved in) activities considered unethical or immoral.