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Safe Harbor - Legal privilege of a corporation to discuss business operations and future plans publicly without fear of litigation, provided good faith can be demonstrated.
Sales Charge - Dollar amount charged to or deducted from an investment for payment of sales commissions to a broker. In load mutual funds, sales charges are normally deducted from the net asset value of shares purchased. In offerings, sales charges are reflected in reduced proceeds to the issuer.
Sallie Mae - Student Loan Marketing Agency, a quasi-government organization which issues securities to fund the U.S. government-guaranteed student loans.
Schedule 13D - Report filed by insiders or control persons desirous of selling shares in a public corporation.
Seat - Figurative term referring to membership in the New York or American stock exchanges or one of the various commodities exchanges.
Secondary Offering - Public sale of previously issued securities held by large investors, usually institutions or corporations. In a new issue or primary offering, the seller is the issuing corporation. (See "Initial Public Offering," "Public Offering")
Securities Act of 1933 - Principal body of Federal law regulating the securities industry. The Act primarily requires the full and fair disclosure of all material information about the issuance of new securities.
Securities and Exchange Commission (SEC) - Agency of the U.S. government, created and empowered by the Securities act of 1933 and the Securities Exchange Act of 1934, responsible for enforcement of federal securities laws in the United States.
Securities Exchange Act of 1934 - Federal law, subsequent to the Securities Act of 1933, further regulating the securities industry and creating the Securities and Exchange Commission to enforce securities laws.
Securities Investors Protection Corporation (SIPC) - Government-established insurance agency which insures investors' accounts against loss from bankruptcy by a brokerage firm. SIPC does not, however, insure against loss from investment risk.
Security - Any instrument, debt or equity issued by a corporation to investors for capital or other consideration and providing evidence of ownership or claim to said instrument.
Self-Regulatory Organization - Organization which regulates the activities of its members, such as the National Association of Securities Dealers and the American and New York stock exchanges.
Sell Order - Any request for a broker or other fiduciary to sell a security on behalf of a client, is referred to as a 'sell order'. A 'sell order' is normally a limit order to sell a security at a specific, 'sell order' price. A 'sell order' on a short sale accompanied or bracketed by a buy stop order above the entry price of the sell order and a buy limit order below the entry price of the sell order is referred to as a bracketed 'sell order'.
Selling Group - Group of brokers or dealers assembled by an underwriter to jointly sell shares or units of an offering.
Senior Note - Bond or other debenture issued by a corporation and designated as having dividend and liquidation preferences over other bonds or debentures of the issuer.
Series 3 - Name of the examination given by the National Association of Securities Dealers to license persons to become an options principal or manager of a brokerage.
Series 6 - Name of the examination given by the National Association of Securities Dealers to license persons to sell a limited number of securities, mostly mutual funds and annuities.
Series 7 - Name of the examination given by the National Association of Securities Dealers to license stock brokers (registered representatives).
Series 63 - Name of the examination given by the National Association of Securities Dealers to license a person to serve as a principal or manage a stock brokerage.
Settlement - Specific date a securities trade is credited to the accounts of the buyer and seller and all evidence of ownership and payment are transferred. Settlement for all securities traded on U.S. exchanges is the third business day after the date of the trade, also known as "T+3."
Share - Unit of equity ownership in a corporation, represented by a stock certificate; also may refer to a unit of ownership in a mutual fund.
Shareholder - Owner of one or more shares of stock in a corporation.
Shareholder’s Equity - Amount of equity or net assets of a company attributed to the shareholders of that company.
Shell - Public corporation with issued and outstanding shares but no operating business and sometimes no substantial assets. Many shell corporations are quoted on the OTC Bulletin Board while awaiting a sale, merger or reorganization with an operating business.
Short - Versatile term often used to describe the absence of a security, a short sell position in a security or the general opinion that a security or the market will decline in price. Traders should always use a 'stop loss' for any short sell placed..
Short Against the Box - Selling short shares that are already owned by an investor, usually to take advantage of unrealized gains without incurring a taxable event from the sale of the actual security.
Short Interest - Number of shares of a security accounted for as sold short. A high quantity of shares in a stock’s short interest may be an indicator of the market’s loss of confidence in a particular stock.
Short Position - Position in a client’s account resulting from the credit due from a short sale; sometimes used to describe a deficiency of a security in a client’s account.
Short Sale - Selling of a security not owned or held by the seller. Short selling is often used as a strategy by investors to profit from an expected decrease in the price of a security. By selling short, the seller receives credit as if the sale of a long or normally held, security had occurred. Later, the short seller will buy back the same security, hopefully for a price less than credited from the sale, thus pocketing the difference as a profit. Short selling involves unlimited risk and is not suitable for conservative investors. Traders participating in a short sell should always maintain a stop loss. Traders may utilize a stop order on a short sale, as well. (see 'stop loss'; see 'stop order')
Short-Term - Any investment with a maturity of one year or less, although the term is often stretched to refer to any class of security, particularly bonds, expected to become liquid within two years.
Sinking Fund - Provision by an issuer of bonds to set aside money for later use in redeeming or retiring the principal of the bonds issued and outstanding, either at maturity or at another date specified in the bond.
Size - Number of shares represented by the highest bid and the lowest offer at any given time in the trading of a security. For example: The market for XYZ Corp. is currently quoted as 1,000 shares bid at $56 and 500 shares offered at $56, thus the size of the market is expressed as 1000 by 500 shares. Investors often view this as a measure of short-term interest by buyers and sellers. In this example, the assumption is there are more buyers than sellers of XYZ at current prices (1000 shares bid vs. 500 asked) and thus, the price of XYZ should increase to reflect this imbalance.
Specialist - Stock exchange member with the responsibility of ensuring an orderly market in the shares of a particular security traded on the exchange. Often the specialist will buy or sell securities from its own account when orders from other investors cannot be evenly matched.
Specialist’s Book - List or accounting that an exchange specialist keeps of all orders and trades executed through the specialist.
Speculation - Act of investing in risky securities such as options, futures, penny stocks, etc. or a term referring to trades on short-term price swings in securities.
Spinoff - Form of corporate divestiture that results in a subsidiary or division becomes an independent company. Shareholders of the parent company receive shares in the new company on a pro rata basis, and new investors also may purchase shares in the new company in an offering associated with the spinoff. An example of a prominent spinoff was the creation of Lucent Technologies from a division of AT&T.
Split - Procedure where a company increases its number of shares outstanding. After a split, the shares' market value will remain unchanged but each share will decline in price. For example, if a firm with 20 million outstanding shares selling at $100 a share executes a 2-for-1 split, it will end up with 40 million shares selling for $50 each. Splits are generally a publicity event and a method by which companies keep share prices at levels where many small investors can trade without needing to execute an "odd lot" order. Only a few companies, such as Berkshire Hathaway, avoid stock splits altogether. (See "Reverse Split")
Spot Market - Market in which goods are traded for immediate delivery and payment.
Spot Price - Quoted price of a metals commodity such as gold or silver.
Spread - Price difference between the highest bid and lowest ask for a security at a given point in time.
Standard & Poor’s - Established publisher of a broad range of financial information, including a bond credit-rating service, public-company reports, and the "Standard & Poor's 500," one of the most widely-followed stock market indexes.
Stock Power - Power of attorney form authorizing the transfer of ownership of securities or stock certificates.
Stockbroker - Broker; any person who has been duly registered by the National Association of Securities Dealers and or a state’s securities regulation authority to take customer orders or to solicit the sale of a security. Brokers are also called Registered Representatives, as it is most common to become a broker by passing the NASD Series 7 examination.
Stop Loss - The ability to limit losses is by setting a 'stop loss'. Not to be confused by a 'stop order', a 'stop loss' can help reduce a traders loss on a transaction. A 'stop loss' order is an order placed with a broker to sell a security at a certain price. A 'stop loss' order may also be referred to as a 'stop order' or 'stop-market order'. Traders who refuse to use a 'stop loss' or 'stop order' for that matter are playing with fire. Whild in place, there is no guaratee a 'stop loss' will be processed.
Stop Order - A market order to buy or sell a security which is to be entered by the broker only if the security trades at a specified or "stop" price, is known as a 'stop order'. In other words a 'stop order' will only be executed when a security reaches a particular price or a 'stop order' price. Investors typically use a buy 'stop order' when buying stock to limit a loss or protect short sale profits. A sell 'stop order' helps investors avoid further losses. The advantage of a 'stop order' prevents the trader from continuously monitoring the stock movement. The use of a 'stop order' is frequent for OTC stocks although some brokers do not allow the use of a 'stop order' on OTC stocks. Certain securities are not available for a 'stop order'. An investor may place a stop-limit order to avoid the risk of a 'stop order' not being filled. On volatile stocks, a fill on a 'stop order' may be difficult to accomplish. During a rapidly moving market, it may be difficult to get a fill on a 'stop order'. The amount for a 'stop order' is at the discretion of the trader. A 'stop order' is an instruction to the broker, from the customer. A trader should view details for a 'market order', a 'limit order', an AON order or a FOK order. Traders should also consider 'GTC' order or a 'day order'. A 'conditional order' requires the broker to check for specific conditions to be met befor an order is filled.
Straddle - Options trading strategy affected by a purchase or sale of an equal number of puts and calls, with the same strike price and expiration dates. The objective of a straddle is to make a profit from a volatile market where prices may swing significantly up or down.
Street - Slang term for Wall Street or just about anything related to the stock market.
Street Name - Term describing securities which are held by a fiduciary (brokerage) firm for the benefit of a client’s account and are registered by the issuer’s transfer agent in the name of the
Strike Price - Specified price of an option at which the contract may be exercised for the purchase (call) or sale (put) of the shares of underlying stock; also called "Exercise Price."
Strip - An acronym for Separated Trading of Registered Interest and Principal of Securities. A strip is a bond, usually issued by the U.S. government, whose interest and repayment of principal are separated and sold individually as zero-coupon bonds.
Subordinated - Security owners' rights or claims to a company's assets are second or subordinate, to another class of security owners; often used often in association with bonds or preferred stock.
Subscription - Agreement of intent to purchase newly issued securities.
Support - In technical analysis of stock, the term describes a pattern where the price of a security is relatively stable within a narrow range, thus showing the market has a consensus or "support" for that price.
Switching - Practice of moving shares from one mutual fund to another to take advantage of different investment objectives.
Syndicate - Group of investment firms which jointly underwrite a security offering.