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S
Fifth letter of a Nasdaq stock symbol specifying a beneficial interest.
SA
The two-character ISO 3166 country code for SAUDI ARABIA.
SAIF
See: Savings Association Insurance Fund
SAR
The ISO 4217 currency code for the Saudi Arabian Riyal.
SATURNS
See Structured Asset Trust Unit Repackagings.
SB
The two-character ISO 3166 country code for SOLOMON ISLANDS.
SBD
The ISO 4217 currency code for the Solomon Islands Dollar.
SC
The two-character ISO 3166 country code for SEYCHELLES.
SCR
The ISO 4217 currency code for the Seychelles Rupee.
SD
The two-character ISO 3166 country code for SUDAN.
SDD
The ISO 4217 currency code for the Sudanese Dinar.
SDR
See: Special drawing rights
SE
The two-character ISO 3166 country code for SWEDEN.
SEAQ
See: Stock Exchange Automated Quotation System
SEC
See: Securities & Exchange Commission
SED
See: Shipper's Export Declaration
SEHK
See: Stock Exchange of Hong Kong
SEK
The ISO 4217 currency code for the Swedish Krona.
SHP
The ISO 4217 currency code for the Saint Helena Pound.
SIAC
See: Security Industry Automated Corporation
SIC
See: Standard Industrial Classification
SIMEX
See: Singapore International Monetary Exchange
SG
The two-character ISO 3166 country code for SINGAPORE.
SGD
The ISO 4217 currency code for the Singapore Dollar.
SH
The two-character ISO 3166 country code for SAINT HELENA.
SI
The two-character ISO 3166 country code for SLOVENIA.
SIT
The ISO 4217 currency code for the Slovenian Tolar.
SJ
The two-character ISO 3166 country code for SVALBARD AND JAN MAYEN.
SK
The two-character ISO 3166 country code for SLOVAKIA.
SKK
The ISO 4217 currency code for the Slovak Republic Koruna.
SL
The two-character ISO 3166 country code for SIERRA LEONE.
SLL
The ISO 4217 currency code for the Sierra Leone Leone.
SM
The two-character ISO 3166 country code for SAN MARINO.
SMBS
See: Stripped mortgage backed securities
SN
The two-character ISO 3166 country code for SENEGAL.
SO
The two-character ISO 3166 country code for SOMALIA.
SOES
See: Small Order Execution System
SOS
The ISO 4217 currency code for the Somalian Shilling.
SOXS
See: Sarbanes Oxley Act of 2002
SPDR
The Standard and Poor's depositary receipt. This is a tracking stock which trades like an index mutual fund which follows the S&P 500. It trades
continuously.
SR
The two-character ISO 3166 country code for SURINAME.
SRG
The ISO 4217 currency code for the Surinam Guilder.
ST
The two-character ISO 3166 country code for SAO TOME AND PRINCIPE.
STD
The ISO 4217 currency code for the Sao Tome & Principe Dobra.
SV
The two-character ISO 3166 country code for EL SALVADOR.
SVC
The ISO 4217 currency code for the El Salvador Colon.
SWIFT
See: Society for Worldwide Interbank Financial Telecommunications
SY
The two-character ISO 3166 country code for SYRIAN ARAB REPUBLIC.
SYP
The ISO 4217 currency code for the Syrian Pound.
SZ
The two-character ISO 3166 country code for SWAZILAND.
SZL
The ISO 4217 currency code for the Swaziland Lilangeni.
SACE
The Italian export creditagency.
Safe harbor
Often used in risk arbitrage as a form of shark repellent. A target companyacquires a business so onerously regulated that it makes the target less attractive, giving it, in effect, a safe harbor.
Safe harbor lease
A lease to transfer tax benefits of ownership (depreciation and debttax shield) from the lessee, if the lessee could not use them, to a lessor that could use them.
Safekeep
Holding by a bank of bonds and money market instruments. For a fee, the bank clips coupons and presents for payment at maturity.
Safety cushion
In a contingent immunizationstrategy, the difference between the initially available immunization level and the safety-net return.
Safety-net return
The minimum available return that will trigger an immunization strategy in a contingent immunization strategy.
Salary
Regular wages and benefits an employee receives from an employer.
Salary freeze
A temporary halt to increases in salary due to financial difficulties experienced by a company.
Salary reduction plan
A plan allowing employees to contribute pre-tax income to a tax-deferredretirement plan.
Salary
Reduction Simplified Employee Pension Plan (SARSEP)
A low-cost, no-frills version of a 401(k) employee savings plan available
to companies with 25 or fewer employees. It allows employees to make pretax contributions to their IRAs through salary reduction
each year. The Small Business Job Protection Act of 1996 replaced SARSEPs
with SIMPLE (Savings Incentive Match Plan for Employees) plans. Existing SARSEPs
were allowed to add new participants, but new plans could not be formed after
December 31, 1996.
Sale
An agreement between a buyer and a seller on the price to be paid for a security, followed by delivery.
Sale and lease-back
Sale of an existing asset to a financial institution that then leases it back to the user. Related: Lease.
Sales charge
The fee charged by a mutual fund at purchase of shares, usually payable as a commission to a marketing agent, such as a financial adviser, who is thus compensated for assistance to a purchaser. It represents the difference, if any, between the share purchase price and the share net asset value.
Sales completion
In the context of project financing, the state in which the project
has reached physical completion and has delivered product or generated
revenues in satisfaction of a sales completion test.
Sales Contract
Contract between a seller and buyer for the sale of goods, services, or both.
Sales forecast
A key input to a firm'sfinancial planning process. External salesforecasts are based on historical experience, statistical analysis, and consideration of various macroeconomicfactors.
Sales literature
Material written by an institution selling a product, which informs potential buyers of the product and its benefits.
Sales load
See: Sales charge
Sales tax
A percentage tax on the selling price of goods and services.
Sales-type lease
The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company.
Sallie Mae
See: Student Loan Marketing Association
Salomon Brothers World Equity Index (SBWEI)
A top-down, floatcapitalization-weighted index used to measure the performance of fixed-income and equity markets. It includes approximately 6000 companies in 22 countries.
Salomon
Brothers Non-U.S. Dollar World Government Bond Index
A benchmarkindex that
includes institutionally traded bonds other than
U.S. issues that have a fixed rate and a remaining
maturity of one year or longer.
Salvage value
Scrap value of plant and equipment.
Same-Day Funds Settlement (SDFS)
A method of settlement used in trading
between well-collateralized parties in
good-the-same-day federal funds used by the Depository
Trust Company for transactions in
US government securities, short-term municipal notes,
medium-term commercial paper notes, CMOs,
and other instruments.
Same-day substitution
Offsetting changes in a margin account during the day that result in no overall change in the balance of the account.
Samurai bond
A yen-denominatedbond issued in Tokyo by a non-Japanese borrower. Related: Bulldog bond and Yankee bond.
Samurai market
The foreign market in Japan.
Santa Claus Rally
Seasonal rise in stock prices in the last week of the calendar year, between Christmas and New Year's Day.
Sao Paulo Stock Exchange
See: Bolsa de Valores de Sao Paulo
S&P
Standard & Poor's Corporation.
S&P 500 Composite Index
Index of 500 widely held common stocks that measures the general performance of the market.
S&P phenomenon
Tendency of stocks newly added to the S&P composite index to rise in price due to a large number of buyorders as S&P-related index funds add the stock to their portfolios.
S&P Rating
Rating service provided by S&P that indicates the amount of risk involved with different securities.
Sarbanes Oxley Act of 2002
Legislation passed largely as a result of a number of accounting scandals. Among the many features is the creation of the Public Company Accounting Oversight Board. This board is charged to:
The Board shall:
1) register public accounting firms;
2) establish, or adopt, by rule, auditing, quality control, ethics, independence, and other
standards relating to the preparation of audit reports for issuers;
(3) conduct inspections of accounting firms;
(4) conduct investigations and disciplinary proceedings, and impose appropriate
sanctions;
(5) perform such other duties or functions as necessary or appropriate;
(6) enforce compliance with the Act, the rules of the Board, professional standards, and
the securities laws relating to the preparation and issuance of audit reports and the
obligations and liabilities of accountants with respect thereto;
(7) set the budget and manage the operations of the Board and the staff of the Board.
Saturday night special
Often used in risk arbitrage. Sudden attempt by one company to take over another by making a publictender offer.
Saucer
Technical chart pattern depicting a security whose price has reached bottom and is moving up.
Savings Association Insurance Fund (SAIF)
A government organization that replaced the Federal Savings and Loan Insurance Corporation as the provider of deposit insurance for thrift institutions.
Savings bank
An institution that primarily accepts consumer savings deposits and to make home mortgage loans.
Savings bond
A government bond issued in face valuedenominations from $50 to $10,000, with local and state tax-free interest and semiannually adjusted interest rates.
Savings deposits
Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand.
Savings element
Used in the context of life insurance, the cash value built up in a policy, which equals the amount of premium paid minus the cost of protection. This excess is invested by the insurance company, and the returns are tax-deferred inside the policy.
Savings
Incentive Match Plan for Employees (SIMPLE) 401(k) plan
A tax-deferred retirement savings plan similar to a conventional 401(k) plan,
redesigned with specific rules to meet the needs of small employers. The Small Business
Job Protection Act of 1996 created these plans for companies with fewer than 100
employees. An employee's contributions are indexed for inflation, and employers must
make annual annual matching contributions.
Savings and loan association
National- or state-chartered institution that accepts savings deposits and invests the bulk of the funds thus received in mortgages.
Savings rate
Personal savings as a percentage of disposable personal income.
Scale
Payment of different rates of interest on CDs of varying maturities. A bank is said to "post a scale." Commercial paperdealers also post scales.
Scale-enhancing
Describes a project that is in the same riskclass as the whole firm. That is, the project allows the firm to grow larger in the context of their current business rather than diversify into new businesses.
Scale in
Gradually taking a position in
a security or market
over time.
Scale order
Order to buy (sell) a security that specifies the total amount to be bought (sold) and the amount to be bought (sold) at successively decreasing (increasing) price intervals; often placed in order to average the price.
Scaling
How the characteristics of an object change as you change the size of your
measuring device. For a three dimensional object, it could be the volume of an object
covered as you increase the radius of a covering sphere. In a times series, it could be the
change in the amplitude of the time series as you increase the increment of time.
Scalp
To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day.
Scalping
Buying up the good IPOs.
Scattered
Used for listed equity securities. Unconcentrated buy or sell interest.
Scenario analysis
The use of horizon analysis to project total returns under different reinvestment rates and future marketyields.
Schedule C
Describes membership requirements and procedures of NASD, in its bylaws.
Schedule 13d
Disclosure form required when more than 5% of any class of equitysecurities in a publicly held corporation is purchased.
Scheduled cash flows
The mortgageprincipal and interest payments due to be paid under the terms of the mortgage, not including possible prepayments.
Scorched-earth policy
Often used in risk arbitrage. Any technique a company that has become the target of a takeover attempt uses to make itself unattractive to the acquirer. For example, it may agree to sell off its crown jewels, or schedule all debt to become due immediately after a merger.
S Corporation
A corporation that elects not to be taxed as a corporation. That is, the
corporation does not directly pay federal income tax on its earnings. Similar to a partnership, it passes its income or losses and other tax items on to its shareholders.
Screen stocks
To analyze various stocks in search of stocks that meet predetermined criteria. For example, a simple value screen would sort all stocks by their price-to-book ratio and pick the stocks with the lowest ratios as candidates for the value portfolio.
Scrip
A temporary document that represents a portion of a share of stock, often issued after a stock split or spin-off.
Scripophily
Collecting stock and bondcertificates for their scarcity, rather than for their value as securities.
Search costs
Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time). Related: Information costs.
Seasonally adjusted
Mathematically adjusted by moderating a macroeconomicindicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year.
Seasoned
In the case of equity, having gained a reputation for quality with the investingpublic and enjoying liquidity in the secondary market; in the case of convertibles, having traded for at least 90 days after issue in Europe, and thus available for sale legally to U.S. investors.
Seasoned datings
Extended credit for customers who order goods in periods other than peak seasons.
Seasoned issue
Issue of a security for which there is an existing market. Related: Unseasoned issue.
Seasoned new issue
A new issue of stock after the company'ssecurities have previously been issued. A seasoned new issue of common stock can be made using a cash offer or a rights offer.
Seat
Position of membership on a securities or commodityexchange, bought and sold at market prices.
SEC fee
Small fee the SEC charges to sellers of equitysecurities on an exchange.
Second market
The OTC market.
Second pass regression
A cross-sectionalregression of portfolioreturns on betas. The estimated slope is the measurement of the reward for bearing systematic risk during the period analyzed.
Second-preferred stock
Preferred stockissue that has less priority in claiming dividends and assets in liquidation than another issue of preferred stock.
Second round
Stage of venture capital financing following the start-up and first round stages and before the mezzanine level stage.
Second-to-die insurance
Insurance policy that, on the death of the spouse dying last, pays a death benefit to the heirs that is designed to cover estate taxes.
Secondary distribution/offering
Publicsale of previously issuedsecurities held by large investors, usually corporations or institutions, as distinguished from a primary distribution, where the seller is the issuing corporation. The sale is handled off the NYSE, by a securities firm or a group of firms, and the shares are usually offered at a fixed price related to the current market price of the stock.
Secondary issue
(1) Procedure for selling blocks of seasoned issues of stocks. (2) More generally, sale of already issued stock.
Secondary Offering
An IPO in which
privately held shares in a corporation are sold to
the public.
Secondary market
The market in which securities are traded after they are initially offered in the primary market. Most trading occurs in the secondary market. The New York Stock Exchange, as well as all other stock exchanges and the bond markets, are secondary markets. Seasoned securities are traded in the secondary market.
Secondary mortgage market
Buying and selling existing mortgage loans, which are often pooled and traded as mortgage-backed securities.
Secondary stocks
Stocks with smaller market capitalization, less quality and more risk than blue chipissues that behave differently than larger corporations' stocks.
Second mortgage lending
Loanssecured by real estate previously pledged in a first mortgage.
Secert Ballot
In the context of corporate governance, this is also known as confidential voting. An independent third party or employees sworn to secrecy are used to count proxy votes, and the management usually agrees not to look at individual proxy cards. This can help eliminate potential conflicts of interest for fiduciaries voting shares on behalf of others, or can reduce pressure by management on shareholder-employees or shareholder-partners.
Section 16(a)
Provision of the Securities Exchange Act of 1934 that requires company insiders to file periodic reportsdisclosing their holdings and changes in beneficial ownership of the company'sequity securities.
Section 16(b)
Provision of the Securities Exchange Act of 1934 that requires that any profit
realized by a company insider from the purchase and sale, or sale and purchase, of the company'sequity securities within a period of less than six months must be returned to the company. It is also known as the "short-swing profit" rule.
Section 83(b) Election
A tax filing within 30 days of grant that allows employees granted stock to
pay taxes on the grant date instead of on the date restrictions lapse. If an employee files the election, taxes are based on the fair market value on the grant date, with any future appreciation taxed as a capital gain. If the employee does not file an election, taxes are based on the fair market value on the date the restrictions lapse, which will be higher assuming the stock has appreciated in value.
Section 423
The government agency responsible for the supervision and regulation of the securities industry and markets, as well as public securities offerings and the ongoing disclosure obligations of public companies.
Section 482
US Department of Treasury regulations governing transfer
prices.
Sector
Used to characterize a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.
Sector allocation
Investment of certain proportions of a portfolio in certain sectors. See: Industry allocation.
Sector diversification
Constituting of a portfolio of stocks of companies in each major industry
group.
Sector fund
A mutual fund that
concentrates on a relatively narrow market
sector. These funds can experience higher share price volatility than some diversified funds because sector funds are subject to common market forces
specific to a given sector.
Sector rotation
An active asset management strategy certain sectors, that tactically overweights and underweights depending on expected performance. Sometimes called rotation.
Secular
Long-term time frame (10-50 years or more).
Secured bond
A bond backed by the pledge of collateral, a mortgage, or other lien, as opposed to an unsecured bond, called a debenture .
Secured debt
Debt that has first claim on specified assets in the event of default.
securities
Paper certificates (definitive securities) or electronic records (book-entry securities) evidencing ownership of equity (stocks) or debt obligations (bonds).
Securities Act of 1933
First law designed to regulate securitiesmarkets, requiring registration of securities and disclosure.
Securities Acts Amendments of 1975
Legislation to encourage the establishment of a national market system together with a system for nationwide clearing and settlement of securitiestransactions.
Securities analysts
Related: Financial analysts
Securities and commodities exchanges
Exchanges on which securities, options, and futurescontracts are traded by members for their own accounts and for the accounts of customers.
Securities & Exchange Commission (SEC)
A federal agency that regulates the US financial markets. The SEC also oversees
the securities industry and promotes full
disclosure in order to protect the investingpublic against malpractice in
the securities markets.
Securities and Exchange Commission Rules
Rules enacted by the SEC to assist in the
regulation of US financialmarkets.
Securities Exchange Act of 1934
Legislation that created the SEC, outlawing
dishonest practices in the trading of securities.
Securities Exchange of Thailand (SET)
The only stock market in Thailand, based in Bangkok.
Securities Industry Association (SIA)
An association of broker-dealers
who sell taxable securities, which lobbies
the government, records industrytrends, and
keeps records of brokerprofits.
Securities Industry Committee on Arbitration (SICA)
A private group that provides mediation services in case of customer complaints against securitiesfirms.
Securities Investor Protection Corporation (SIPC)
A nonprofit corporation that insures customers' securities and cash held by member brokerage firms against the failure of those firms.
Securities loan
The loan of securities between brokers, often to cover a client's short sale; or a loan secured by marketable securities.
Securities markets
Organized exchanges plus over-the-countermarkets in which securities are traded.
Securitization
Creating a more or less standard investmentinstrument such as the mortgagepass-through security, by poolingassets to back the instrument. Also refers to the replacement of nonmarketable loans and/or cash flows provided by financial intermediaries with negotiable securities issued in the publiccapital markets.
Security
Piece of paper that proves ownership of stocks, bonds, and other investments.
Security characteristic line
A plot on a graph of the excess return on a security over the risk-free rate as a function of the excess return on the market. The slope of this line is the security's beta.
Security deposit (initial)
Synonymous with the term margin. A cash amount that must be deposited with the broker for each contract as a guarantee of fulfillment of the futures contract. It is not considered as part payment or purchase. Related: Margin.
Security deposit (maintenance)
Related: Maintenance margin
Security Industry Automated Corporation (SIAC)
Entity that executes automated DOTorders.
Security interest
The creditor's right to take property or a portion of property offered as security.
Security market line
Line representing the relationship between expected return and market risk or beta. The slope of this line is the risk premium for beta.
Security Market Line
The linear relationship between expected assetreturns
and betas posited by the Capital Asset Pricing
Model.
Security market plane
A plane that shows the relationship between expected return and the beta coefficient of more than one factor.
Security ratings
Commercial rating agencies' assessment of the credit and investment risk of securities.
Security selection
See: Security selection decision
Security selection decision
Choosing the particular stocks or bonds or other investment instruments to include in a portfolio.
Seed money
The first contribution by a venture capitalist toward the financing of a new business, often using a loan or purchase of convertible bonds or preferred stock. See: Mezzanine level and second round.
Seek a market
Search for a securitiesbuyer or seller.
Segmented Market
A market in which there are
impediments to the free flow of labor, capital,
and information.
Segregation of securities
SEC rules to dictate how customers' securities may be used by broker-dealers in broker loans.
Seigniorage
The amount of goods and services that the government obtains by printing new money in a given period. Often we consider this in real terms, by dividing the new money by the price level.
Select ten portfolio
A unit investment trust that buys and holds for one year the ten stocks in the Dow Jones Industrial Average with the highest dividendyields.
Selective hedging
Protecting investments during some time periods and not during
others.
Selected dealer agreement
The set of rules governing the selling group in an underwriting.
Self-amortizing mortgage
Mortgage whose entire principal is paid off in a specified period of time with regular interest and principal payments.
Self-directed IRA
An IRA that the account holder can after appointing a custodian manager to carry out investment instructions.
Self-employed income
Taxable income of a person involved in a sole proprietorship or other sort of free-lance work.
Self-employment tax
A tax self-employed people must pay to qualify them to receive Social Security benefits at retirement.
Self-liquidating loan
Loan to financecurrent assets. The sale of the current assets provides the cash to repay the loan.
Self-regulatory organization (SRO)
Organizations that enforce fair, ethical, and efficient practices in the securities and commodityfutures industries, including all national securities and commoditiesexchanges and the NASD.
Self-selection
Consequence of a contract that induces only one group to participate.
Self-Similar
When small parts of an object are qualitatively the same, or similar to the
whole object. In certain deterministic fractals, like
the Sierpinski Triangle, small pieces look the same as the entire object. In random fractals, small increments of time will be statistically
similar to larger increments of time. See: Fractal.
Self-supporting debt
Bonds sold to finance a project that will produce enough revenue through tolls or other charges to retire the debt . See: revenue bond.
Self Tender
A companybuys back a certain percentage of its own shares through a tender offer.
Self-tender offer
A company that tenders for its own shares.
Sell the book
Used for listed equity securities. Order to a broker by the holder of a large quantity of shares of a security to sell all that can be absorbed at the current bid price. The term derives from the specialist's book - the record of all the buy and sell orders members have placed in the stock one handles. In this scenario, the buyers potentially include those in the specialist's book, the specialist for its own account, and broker-dealers.
Sell hedge
Related: short hedge.
Sell limit order
Conditional trading order that indicates that a security may be sold at the designated price or higher. Related: Buy limit order.
Sell off
Sale of securities under pressure. See: Dumping.
Sell order
An order that may take many different forms by an investor to a broker to sell a particular stock, bond, option, future, mutual fund, or other holding.
Sell out
Liquidation of a margin account after a customer has failed to bring an account to a required level by producing additional equity after a margin call.
The selling of securities by a broker when a customer fails to pay for them.
The complete sale of all securities in a new issue.
Sell plus order
Market or limit order to sell a stated amount of stock provided that the price to be obtained is not lower than the last sale if the last sale was a plus, or zero plus tick, and is not lower than the last sale plus the minimum fractional change in the stock if the last sale was a minimum or zero minimum tick. (In a limit order, sale cannot be lower than the limit, regardless of tick.)
Sell price
See: Redemption
price
Sell-side analyst
A financial analyst who works for a brokerage firm and whose recommendations are passed on to the brokerage firm's customers. Also called Wall Street analyst.
Seller financing
Funding a purchase by a seller's loan to the buyer, the buyer takes full title to the property when the loan is fully repaid.
Seller's market
Market in which demand exceeds supply. As a result, the seller can dictate
the price and the terms of sale.
Seller's option
Delayed settlement/delivery in a transaction.
Seller's points
In reference to a loan, seller's points consist of a lump sum paid by the seller to the buyer'screditor to reduce the cost of the loan to the buyer. This payment is either required by the creditor or volunteered by the seller, usually in a loan to buy real estate. Generally, one point equals one percent of the loan amount.
Selling climax
A sudden drop in security prices as sellers dump their holdings.
Selling concession
The discountunderwriters offer the selling group on securities in a new issue.
Selling dividends
Inducing a prospective customer tobuyshares in order to profit from a dividend scheduled in the near future.
Selling, general, and administrative (SG&A) expenses
Expenses such as salespersons' salaries and commissions, advertising and promotion, travel and entertainment, office payroll and expenses, and executives' salaries.
Selling on the good news
A strategy of selling stock shortly after a company announces good news and the stock price rises. Investors believe that the price is as high as it can go and is on the brink of going down.
Selling group
All banks involved in selling or marketing a new issue of stock or bonds.
Selling short
Selling a stock not actually owned. If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, the investor must buy the stock back on the openmarket. For instance, you borrow 1000 shares of XYZ on July 1 and sell it for $8 per share. Then, on Aug. 1, you purchase 1000 shares of XYZ at $7 per share. You've made $1000 (less commissions and other fees) by selling short.
Selling short against the box
Selling shortstock that is actually owned by the seller but held in the box, meaning it is held in safekeeping. The seller borrowssecurities needed to cover as the stockin the box may be inaccessible, or the seller may not wish to disclose ownership. The traditional motive for this transaction was to defer capital gains taxes. However, this method became infeasible under the Taxpayer Relief Act of 1997.
Selling the spread
A spread whose option to be sold is trading at a higher premium than the option to be bought.
Selling Syndicate
A group of underwriters that
issues a firm'ssecurities by buying them from
the issuing firm and reselling them to a group of smaller brokerage firms for eventual sale
to individual investors.
Semistrong-form efficiency
A form of pricing efficiency that profits the price of a security fully reflects all public information (including, but not limited to, historical price and trading patterns). Compare weak-form efficiency and strong-form efficiency.
"Send it in"
Market language: "I bought your stock - 'send it in' (and possibly more)."
Senior debt
Debt whose terms in the event of bankruptcy, require it to be repaid before subordinated debt receives any payment.
Senior mortgage bond
A bond that, in the event of bankruptcy, will be redeemed before any other bonds are repaid.
Senior refunding
Replacement by the issuer of securities with 5-to 12-year maturities with securities of 15-year or longer maturities, in order to delay, reduce, or consolidate payment.
Senior security
A security that, in the event of bankruptcy, will be redeemed before any other securities.
Seniority
The order of repayment. In the event of bankruptcy, senior debt must be repaid before subordinated debt is repaid.
Sensitive market
A market that reacts to a great extent to good or bad news.
Sensitivity analysis
Analysis of the effect on a project'sprofitability of changes in sales, cost, and so on.
Sentiment indicators
The general feeling of investors about the state of the market, such as whether they are bullish or bearish.
Separate customer
Method of allocating insurance by the Securities Investor Protection Corporation. Each account that is under the name of a different person or group of people is entitled to maximum protection.
Separate tax returns
Tax returns of married persons who choose to file their returns individually,
usually because this approach produces lower overall tax payments.
Separate Trading of Registered Interest and Principal Securities (STRIPS)
Long-termnotes and bonds divided into principal and interest-paying components, which may be transferred and sold in amounts as small as $1000. STRIPS are sold at auction at a minimum par amount, varying for each issue. The amount is an arithmetic function of the issue's interest rate.
Separation property
The property that portfolio choice can be divided into two independent tasks: (1) Determination of the optimal riskyportfolio, which is a purely mathematical problem, and (2) the personal choice of the best mix of the optimal risky portfolio and the risk-free asset, which depends on a person's degree of risk aversion.
Separation theorem
Theory that the value of an investment
to an individual is not dependent on consumption preferences. That is, investors
will want to accept or reject the same investment projects by using the NPV
rule, regardless of personal preference.
Serial bonds
Corporate bonds arranged so that specified principal amounts become due on specified dates. Related: Term bonds.
Serial covariance
The covariance between a variable and the lagged value of the variable; the same as autocorrelation.
Serial entrepreneur
Business person that successfully starts (does not kill) a number of different
businesses.
Serial redemption
The redemption of a serial bond.
Series
Options: All option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Stocks: shares that have common characteristics, such as rights to ownership and voting, dividends, or par value. In the case of many foreign shares, one series may be owned only by citizens of the country in which the stock is registered.
Series bond
Bond that may be issued in several series under the same indenture document.
Series E bond
A local and state tax-free bond issued by the U.S. government from 1941 to 1979, which was then replaced by Series HH bonds.
Series EE bond
See: Savings bond
Series HH bond
See: Savings bond
Service charge
A component of some finance charges, such as the fee for triggering an overdraft checking account into use.
Set-aside
A percentage of a municipal or corporate bondunderwriting that is allocated for handling by a minority-owned broker/dealerfirm.
Set of contracts perspective
View of corporation as a set of contracting relationships among individuals who have conflicting objectives, such as shareholders or managers. The corporation is a legal construct that serves as the nexus for the contracting relationships.
Set up
Applies mainly to convertible securities. Arbitrage involving going long the convertible and short a certain percentage of the underlying common. Antithesis of Chinese hedge.
Setoff
Money held on behalf of a borrower that may be applied to repay the
loan, but usually without the permission of the borrower.
Settle price
An average of the trading
prices in the futures market during the last few minutes of trading.
Settlement
When payment is made for a trade.
Settlement date
The date on which payment is made to settle a trade.
For stocks traded on US exchanges,
settlement is currently three business days after the trade. For mutual
funds, settlement usually occurs in the US the day following the trade.
In some regional markets,
foreign shares may require months to settle.
Settlement options
The various possibilities open to a beneficiary under a life insurance policy as to how the benefit will be paid out.
Settlement price
A figure determined by the closing range that is used to calculate gains and losses in futuresmarket accounts. Settlement prices are used to determine gains, losses, margin calls, and invoice prices for deliveries. Related: Closing range.
Settlement rate
The rate suggested in Financial Accounting Standards Board (FASB) 87 for discounting the obligations of a pension plan. The rate at which the pension benefits could be effectively settled if the company sponsoring the pension plan wishes to terminate its pension obligation.
Settlement risk
The risk that one party will deliver and the counterparty will not be able to pay and vice versa.
Severally but not jointly
An agreement between members of an underwriting group buy a new issue (severally), but not to assume joint liability for shares left unsold by other members.
Severance
A settlement received after being released from a corporation. In the context of corporate governance, an agreement that assures high-level executives of their postions or some compensation and are not contingent upon a change in control.
Segmented market
A market that is partially or wholly
isolated from other markets by one or more
market imperfections.
Shadow calendar
A backlog of securitiesissues registered with the SEC, awaiting the determination of an offer date.
Shadow stock
First, a publiccompany may create a stock that strips out the market wide movements for the purpose of rewarding managers. That is, the management might have done a great job - but the traded stock plummets because the market as a whole plummets. A second interpretation of shadow stock is a phantom stock that is created by a private company (i.e. that does not have stock traded either on exchange or over the counter) again for the purpose of performance evaluation and rewards.
Shadows
The thin lines above and below the real body on a candlestick line.
Shakeout
A dramatic change in market conditions that forces speculators to sell their positions, often at a loss.
Sham
A business transaction, such as a limited partnership, that is entered into for the sake of avoiding tax.
Shanghai Stock Exchange
One of two major securities markets in China.
Share broker
A discountbroker who charges per sharetraded, and reduces the per unit charge as the number of sharestraded increases, as opposed to a dealer who charges a percentage of the dollar amount of the trade.
Share repurchase
Program by which a corporationbuys back its own shares in the openmarket. It is usually done when shares are undervalued. Since repurchase reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.
Shared Appreciation Mortgage (SAM)
A mortgage with a low rate of interest, offset by giving the lender some portion of the appreciation in the value of the underlying property.
Shareholder
Person or entity that owns shares or equity in a corporation.
Shareholders' equity
This is a company's total assetsminus total liabilities. A company'snet worth is the same thing.
Shareholders' letter
A section of an annual report where one can find general overall discussion by management of successful and failed strategies. Provides guidance for looking at specific parts of the report.
Shares
Certificates or book entries representing ownership in a corporation or similar entity.
Shares authorized
The maximum number of shares of stock
of a company allowed in the articles of incorporation, which may be changed
only by a shareholder vote. See: Issued
and outstanding.
Shark repellant
Often used in risk arbitrage. Examples are golden parachutes, poison pills, safe harbor, and scorched-earth policy. Porcupine provision. Amendment to companycharter intended to protect it against takeover.
Shark watcher
Often used in risk arbitrage. Firm specializing in the early detection of takeover activity. Such a firm, whose primary business is usually the solicitation of proxies for client corporations, monitors trading patterns in a client's stock and attempts to determine the identity of parties accumulatingshares.
Sharpe benchmark
A statistically created benchmark that adjusts for a manager's index-like tendencies. Named after William Sharpe, Nobel Laureate, and developer of the capital asset pricing model.
Sharpe ratio
A measure of a portfolio'sexcess return relative to the total variability of the portfolio. Related: Treynor index. Named after William Sharpe, Nobel Laureate, and developer of the capital asset pricing model.
Shelf offering
Offering of registered securities covered by a prospectus whose distribution is not underwritten on a firm commitment basis. The shares may be sold in one block or in small amounts from time to time in agency or principaltransactions. See: Rule 415.
Shelf registration
A procedure that allows firms to file one registration
statement covering several issues of the
same security. SECRule 415, adopted in the 1980s, allows
a corporation to comply with registration requirements up to two years prior
to a public offering of securities.
With the registration "on the shelf," the corporation, by simply
updating regularly filed annual, quarterly, and related reports to the SEC,
can go to the market as conditions become
favorable with a minimum of administrative preparation and expense.
Shell corporation
An incorporated company with no significant assets or operations, often formed to obtain financing before beginning actual business, or as a front tax evasion.
Shenzhen Stock Exchange
One of two major securities markets in China.
Shipper's Export Declaration (SED)
Document required by the U.S. Department of Commerce for exports of certain controlled items, and/or shipments to certain countries, and/or shipments anywhere that exceed certain dollar amounts. This document is used to monitor shipments of controlled goods.
Shipping Documents
A generic term for the various typesof forms required for overseas shipments, such as commercial invoices, transport documents, | |
