| S | Fifth letter of a Nasdaq stock symbol specifying a beneficial interest. |
| 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. |
| 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. |
| SA | The two-character ISO 3166 country code for SAUDI ARABIA. |
| 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. |
| SAIF | See: Savings Association Insurance Fund |
| 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 leaseback | A sale of property which is immediately leased back to the seller by the buyer. Often undertaken to release capital back to the tenant, where the tenant has good covenant strength. |
| 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 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. |
| 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. |
| 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 |
| SAPCO | Single asset property company. Used in the past to try and create liquidity in property markets. Their popularity may increase due to the difference between stamp duty on shares and that on larger land transactions. See envelope transaction. |
| SAR | The ISO 4217 currency code for the Saudi Arabian Riyal. |
| 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. |
| SATURNS | See Structured Asset Trust Unit Repackagings. |
| Saucer | Technical chart pattern depicting a security whose price has reached bottom and is moving up. |
| 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 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 rate | Personal savings as a percentage of disposable personal income. |
| SAVP | A statement of asset valuation practice issued by the RICS. |
| 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. |
| 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 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. |
| 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. |
| 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 13d | Disclosure form required when more than 5% of any class of equitysecurities in a publicly held corporation is purchased. |
| Schedule C | Describes membership requirements and procedures of NASD, in its bylaws. |
| Scheduled cash flows | The mortgageprincipal and interest payments due to be paid under the terms of the mortgage, not including possible prepayments. |
| Scheme of arrangement | A court sanctioned arrangement between a company and its members or creditors. The procedure can be used to avoid problems of financial assistance in the context of envelope transactions. |
| 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. |
| SCR | The ISO 4217 currency code for the Seychelles Rupee. |
| 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. |
| 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 |
| 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 | See: Securities & Exchange Commission |
| SEC fee | Small fee the SEC charges to sellers of equitysecurities on an exchange. |
| 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. |
| Second market | The OTC market. |
| Second mortgage lending | Loanssecured by real estate previously pledged in a first mortgage. |
| 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 round | Stage of venture capital financing following the start-up and first round stages and before the mezzanine level stage. |
| Secondary | Property which is likely to be of interest to some institutional purchasers but lacks the characteristics of prime property, for example non-FRI lease, poor specification or location. |
| 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 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 Offering | An IPO in which privately held shares in a corporation are sold to the public. |
| Secondary stocks | Stocks with smaller market capitalization, less quality and more risk than blue chipissues that behave differently than larger corporations' stocks. |
| Second-preferred stock | Preferred stockissue that has less priority in claiming dividends and assets in liquidation than another issue of preferred stock. |
| 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. |
| Section 104 agreement | An agreement under section 104 of the Water Industry Act 1991 (previously section 18 of the Public Health Act 1936) by which a developer agrees to construct sewers to a specified standard and the local water company, or its agent, agrees to maintain them after completion of construction and expiry of a 12 month maintenance agreement. On adoption the sewer will become a public sewer. |
| Section 106 agreement | An agreement governing planning gain made under section 106 of the Town and Country Planning Act 1990. A section 106 agreement binds owners of the land as if they were parties to it. A section 106 agreement entered into prior to the date of a charge will bind the land in priority to that charge and any sale by a mortgagee will be subject to it. The agreement is entered into contemporaneously with the grant of a planning consent and should be drafted so as to bind the land to which the consent relates only if the planning consent is implemented. Whether the effect of the section 106 agreement is contingent on implementation of the planning consent will depend on the drafting. |
| 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 278 agreement | An agreement under section 278 of the Highways Act 1980 where a person who derives special benefit from highway works enters into an agreement with the highway authority to fund them. |
| Section 38 agreement | An agreement under section 38 of the Highways Act 1980 by which a developer agrees to construct a road to a specific standard and the Highways Authority agrees to adopt and maintain the road after completion of construction, and the expiry of a 12 month maintenance period. On adoption the road will become a public highway. |
| Section 42 relief | Relief from stamp duty under section 42 of the Finance Act 1930 where property of any description is transferred between companies which have at least 75% common ownership. |
| 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. |
| Section 52 agreement | The fore runner to section 106 agreements. These can no longer be entered into, but will continue to bind the land to which they relate. |
| 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 9 consent | Consent required by registered social landlords to enable registered social landlords to enter into legal charges and make disposals. |
| 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 & 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 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 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. |
| Securitisation | A process of packaging cash flows from groups of assets such as mortgages and refinancing by raising a new debt in a transferable form secured on those assets. |
| 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. |
| SED | See: Shipper's Export Declaration |
| 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. |
| Segmented market | A market that is partially or wholly isolated from other markets by one or more market imperfections. |
| Segregation of securities | SEC rules to dictate how customers' securities may be used by broker-dealers in broker loans. |
| SEHK | See: Stock Exchange of Hong Kong |
| 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. |
| SEK | The ISO 4217 currency code for the Swedish Krona. |
| 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. |
| Selected dealer agreement | The set of rules governing the selling group in an underwriting. |
| Selective hedging | Protecting investments during some time periods and not during others. |
| Self Tender | A companybuys back a certain percentage of its own shares through a tender offer. |
| 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 offer | A company that tenders for its own shares. |
| 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 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. |
| 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 group | All banks involved in selling or marketing a new issue of stock or bonds. |
| 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 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 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. |
| Selling the spread | A spread whose option to be sold is trading at a higher premium than the option to be bought. |
| 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. |
| 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. |
| 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. |
| Senior debt | The part of a loan that is served by a first ranking charge. Often mezzanine debt is secured by a second charge. |
| 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. |
| Servient tenement | The name given to land which is the subject of a right or covenant benefiting other land called the dominant tenement. |
| 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. |
| Set-aside | A percentage of a municipal or corporate bondunderwriting that is allocated for handling by a minority-owned broker/dealerfirm. |
| Setoff | Money held on behalf of a borrower that may be applied to repay the loan, but usually without the permission of the borrower. |
| Set-off | The right for a lender to apply credit balances on a borrower’s account against debit balances on another account of the borrower. A bank inherently has a right of set-off arising from the bank/customer relationship but most facility letters contain an express right. |
| 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. |
| 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. |
| 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 |