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Glossary : S

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Safe harbor: Often used in risk arbitrage. Form of shark repellent whereby a target company acquires a business so onerously regulated 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 debt tax shield) from the lessee, if the lessee could not use them, to a lessor that could use them.
Safekeep: For a fee, bankers will hold in their vault, clip coupons on, and present for payment at maturity bonds and money market instruments.
Safety cushion: In a contingent immunization strategy, 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.
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 when purchasing shares, usually payable as a commission to a marketing agent, such as a financial advisor, who is
thus compensated for his assistance to a purchaser. It represents the difference, if any, between the share purchase price and the share net asset value.
Sales forecast: A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors.
Sales-type lease: An arrangement whereby a firm leases out its own equipment, such as a printing company leases its own presses, thereby competing with an independent leasing company.
Salvage value: Scrap value of plant and equipment.
Samurai bond: A yen-denominated bond issued in Tokyo by a non-Japanese borrower. Related: bulldog bond and Yankee bond.

Samurai market: The foreign market in Japan.
Saturday night special: Often used in risk arbitrage. Sudden attempt by one company to takeover another by making a public tender offer.
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 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pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand.
Scale: A bank that offers to pay different rates of interest on CDs of varying maturities is said to "post a scale." Commercial paper dealers also post scales.

Scale enhancing: Describes a project that is in the same risk class as the whole firm.
Scale in: When a trader or investor gradually takes a position in a security or market over time.

Scale order: Used in the context of general equities. Order to buy (sell) a security which specifies the total amount to be bought (sold) and the amount to be bought (sold) at successively decreasing (increasing) price intervals; often done in order to average the price.
Scalp: To trade for small gains. It normally involves establishing and liquidating a position quickly, usually within the same day.
Scattered: Used for listed equity securities. Unconcentrated buy or sell interest.
Scenario analysis: The use of horizon analysis to project bond total returns under different reinvestment rates and future market yields.
Scheduled cash flows: The mortgage principal 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. Technique used by a company that has become the target of a takeover attempt 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.
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 macroeconomic indicator (i.e., Oil prices/imports) so that relative comparisons can be drawn from month to month all year.
Seasoned: For seasoned equity, having gained a reputation for quality with the investing public and enjoying liquidity in the secondary market; when applied to convertibles, having traded for at least 90 days after issued in Europe, and is 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's securities have previously been issued. A seasoned new issue of common stock can be made by using a cash offer or a rights offer.
Second pass regression: A cross-sectional regression of portfolio returns on betas. The estimated slope is the measurement of the reward for bearing systematic risk during the period analyzed.
Secondary distribution/offering: Used in the context of general equities. Public sale of previously issued securities 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 N.Y.S.E., 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 where securities are traded after they are initially offered in the primary market. Most trading is done in the secondary market. The New York Stock Exchange, as well as all other stock exchanges, the bond markets, etc., are secondary markets. Seasoned securities are traded in the secondary market.
Section 482: United States Department of Treasury regulations governing transfer prices.
Sector: Refers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.
Secured debt: Debt that, in the event of default, has first claim on specified assets.
Securities & Exchange Commission (S.E.C.): The S.E.C. is a federal agency that regulates the U.S. financial markets. This federal agency also oversees the securities industry and promotes full disclosure and protection of the investing public against malpractice in the securities markets.
Securities analysts: Related: financial analysts
Securitization: The process of creating a pass-through, such as the mortgage pass-through security, by which the pooled assets become standard securities backed by those assets. Also, refers to the replacement of nonmarketable loans and/or cash flows provided by financial intermediaries with negotiable securities issued in the public capital markets.
Security: Piece of paper that proves ownership of stocks, bonds and other investments.
Security characteristic line: A plot 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 of funds 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 (S.I.A.C.): Executes automated, D.O.T. orders.
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 plane: A plane that shows the relationship between expected return and the beta coefficient of more than one factor.
Security selection: See: security selection decision.
Security selection decision: Choosing the particular securities to include in a portfolio.
Self-liquidating loan: Loan to finance current assets, the sale of the current assets provides the cash to repay the loan.
Self-selection: Consequence of a contract that induces only one group (e.g. low risk individuals) to participate.

Seller's option: Used in the context of general equities. Delayed settlement/delivery.
Sell hedge: Related: short hedge.

Selling group: All banks involved in selling or marketing a new issue of stock or bonds.

Selling short: 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 open market. 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.
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: Used in the context of general equities. Selling of securities under pressure. See: dumping.
Sell plus order: Used in the context of general equities. 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. (if a limit order, sale cannot be lower than the limit regardless of tick).
Sell-side analyst: Also called a Wall Street analyst, a financial analyst who works for a brokerage firm and whose recommendations are passed on to the brokerage firm's customers.
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 specialists book, the specialist for his own account, and the broker-dealer crowd.
Semi-strong form efficiency: A form of pricing efficiency where the price of the 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": Used in the context of general equities. "I bought your stock -- 'send it in' (and possibly more)."
Senior debt: Debt that, in the event of bankruptcy, must be repaid before subordinated debt receives any payment.

Seniority: The order of repayment. In the event of bankruptcy, senior debt must be repaid before subordinated debt is repaid.
Sensitivity analysis: Analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
Separation property: The property that portfolio choice can be separated into two independent tasks: 1) determination of the optimal risky portfolio, 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 risk aversion.
Separation theorem: The value of an investment to an individual is not dependent on consumption preferences. All investors will want to accept or reject the same investment projects by using the N.P.V. 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 auto covariance.

Series: Options: All option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Stocks: shares which have common characteristics, such as rights to ownership and voting, dividends, par value, etc. 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.
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 contrivance that serves as the nexus for the contracting relationships.
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 3 business days after the trade. For mutual funds, settlement usually occurs in the U.S.the day following the trade. In some regional markets, foreign shares may require months to settle.
Settlement price: A figure determined by the closing range which is used to calculate gains and losses in futures market 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 Standard Board (F.A.S.B.) 87 for discounting the obligations of a pension plan. The rate at which the pension benefits could be effectively settled if the company sponsoring pension plan wished 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.
Set up: Mainly applies to convertible securities. Arbitrage involving going long the convertible and short a certain percentage of the underlying common. Antithesis of Chinese hedge.
Shadow Stock: First, a public company 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.
Shareholders: Person or entity that owns share in a corporation.
Shareholders' equity: This is a company's total assets minus total liabilities. A company's net worth is the same thing.

Shareholders' letter: A section of an annual report where one can find jargon-free discussions by management of successful and failed strategies. Provides guidance for the probing of the rest of the report.
Share repurchase: Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it 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.

Shares: Certificates or book entries representing ownership in a corporation or similar entity.
Shark repellant: Often used in risk arbitrage. Examples include golden parachutes, poison pills, safe harbor, and scorched-earth policy. Porcupine provision. Amendment to company charter 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 corporation, monitors trading patterns in a client's stock and attempts to determine the identity of parties accumulating shares.
Sharpe benchmark: A statistically created benchmark that adjusts for a managers' index-like tendencies. Named after William Sharpe, Nobel Laureate, and inventor of the capital asset pricing model.
Sharpe ratio: A measure of a portfolio's excess return relative to the total variability of the portfolio. Related: Treynor index. Named after William Sharpe, Nobel Laureate, and inventor of the capital asset pricing model.
Shelf offering: Used in the context of general equities. Offering of registered securities covered by a prospectus where the 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 principal transactions. See: Rule 415.
Shelf registration: A procedure that allows firms to file one registration statement covering several issues of the same security. It is the term used for S.E.C. Rule 415 adopted in the 1980's, which 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 S.E.C., can go to the market as conditions become favorable with a minimum of administrative preparation and expense.
Shirking: The tendency to do less work when the return is smaller. Owners may have more incentive to shirk if they issue equity as opposed to debt, because they retain less ownership interest in the company and therefore may receive a smaller return. Thus, shirking is considered an agency cost of equity.
Shogun bond: Dollar bond issued in Japan by a nonresident.
Shop: Wall Street jargon for a firm.
Shopped stock: Used in the context of general equities. Sell inquiry that has been seen/shown to other dealers before coming to an investment bank.
Shopping: Seeking to obtain the best bid or offer available by calling a number of dealers and/or brokers.
Short: One who has sold a contract to establish a market position and who has not yet closed out this position through an offsetting purchase; the opposite of a long position. Related: Long.
Shortage cost: Costs that fall with increases in the level of investment in current assets.
Short bonds: Bonds with short (not much time to maturity) current maturities.
Short book: See: unmatched book.
Short covering: Used in the context of general equities. Actual purchase of securities by a short seller to replace those borrowed at the time of a short sale.
Short exempt: Used for listed equity securities. Trading status whereby the owner of a convertible trading at parity can sell the equivalent amount of common short on a minus tick, assuming he has the firm intention to convert.
Shortfall risk: The risk of falling short of any investment target.
Short hedge: The sale of a futures contract(s) to eliminate or lessen the possible decline in value of an approximately equal amount of the actual financial instrument or physical commodity. Related: Long hedge.
Short interest: This is the total number of shares of a security that investors have sold short and that have not been repurchased to close out the short position. Usually, investors sell short to profit from price declines. As a result, the short-interest is often an indicator of the amount of pessimism in the market about a particular security. It should be noted that there are other reasons to short that are not related to pessimism. For example, hedging strategies for mergers and acquisition as well as derivative positions may involve short sales.
Short position: Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought back to close out the transaction. This technique is used when an investor believes the stock price will go down.
Short-run operating activities: Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.
Short sale: Selling a security that the seller does not own but is committed to repurchasing eventually. It is used to capitalize on an expected decline in the security's price.
Short selling: Establishing a market position by selling a security one does not own in anticipation of the price of that security falling.
Short settlement: Used in the context of general equities. Trade settlements done prior to the standard five-day period due to customer request.
Short squeeze: A situation in which a lack of supply tends to force prices upward. In particular, a situation when prices of a stock or commodity futures contracts start to move up sharply and many traders with short positions are forced to buy stocks or commodities in order to cover their positions and prevent (limit) losses. This sudden surge of buying leads to even higher prices, further aggravating the losses of short sellers who have not covered their positions.
Short straddle: A straddle in which one put and one call are sold.
Short-term financial plan: A financial plan that covers the coming fiscal year.
Short-term investment services: Services that assist firms in making short-term investments.
Short-term solvency ratios: Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (1) the current ratio, (2) the acid-test ratio, (3) the inventory turnover ratio, and (4) the accounts receivable turnover ratio.
Short-term tax exempts: Short-term securities issued by states, municipalities, local housing agencies, and urban renewal agencies.
Show & tell list: Used in the context of general equities. Block list which is full of real customer indications (rather than profile).
Show me buyer/seller: Used in the context of general equities. Customer who has not placed a firm order to buy stock but has requested that the salesman show him/her available stock for sale or purchase, along with the asking/bid price, due to his/her interest in buying/selling the stock. See: bidding buyer.
Shut out the book: Used for listed equity securities. Exclude a public bid or offer from participation in a print.
Standard Industrial Classification (S.I.C.): Each code represents a unique business activity classified by industry.
Side effects: Effects of a proposed project on other parts of the firm.
Sidelines: Used in the context of general equities. Hypothetical area referring to non-involvement, merely watching, in a stock.
Sight draft: Demand for immediate payment.
Singapore International Monetary Exchange (S.I.M.E.X.): A leading futures and options exchange in Singapore.
Simple prospect: An investment opportunity where a certain initial wealth is placed at risk
and only two outcomes are possible.
Single country fund: A mutual fund that invests in individual countries outside the United States.
Single factor model: A model of security returns that acknowledges only one common factor. The single factor is usually the market return. See: factor model.
Single index model: A model of stock returns that decomposes influences on returns into a systematic factor, as measured by the return on the broad market index, and firm specific factors.
Signal: The process of conveying information through a firm's actions. The more costly it is to provide a signal, the more credibility it has. For example, to call a press conference and tell everyone that the firm's prospects have improved is less effective than saying the same thing and raising the dividend.
Signaling approach: Approach to the determination of the optimal capital structure asserting that insiders in a firm have information that the market does not have; therefore, the choice of capital structure by insiders can signal information to outsiders and change the value of the firm. This theory is also called the asymmetric information approach.
Signaling view (on dividend policy): The argument that dividend changes are important signals to investors about changes in management's expectation about future earnings.
Simple compound growth method: A method of calculating the growth rate by relating the terminal value to the initial value and assuming a constant percentage annual rate of growth between these two values.
Simple interest: Interest calculated only on the initial investment. Related: compound interest.
Simple linear regression: A regression analysis between only two variables, one dependent and the other explanatory.
Simple linear trend model: An extrapolative statistical model that asserts that earnings have a base level and grow at a constant amount each period.
Simple moving average: The mean, calculated at any time over a past period of fixed length.
Simulation: The use of a mathematical model
to imitate a situation many times in order to estimate the likelihood of various possible outcomes. See: Monte Carlo simulation.
Single-index model: Related: market model
Single-payment bond: A bond that will make only one payment of principal and interest.
Single-premium deferred annuity: An insurance policy bought by the sponsor of a pension plan for a single premium. In return, the insurance company agrees to make lifelong payments to the employee (the policyholder) when that employee retires.
Sinker: Sinking fund.
Sinking fund requirement: A condition included in some corporate bond indentures that requires the issuer to retire a specified portion of debt each year. Any principal due at maturity is called the balloon maturity.
Sit tight: Used in the context of general equities. Directive from the trader to the customer to be patient, emphasizing that one's piece of business will be executed.
Size: Large in size, as in the size of an offering, the size of an order, or the size of a trade. Size is relative from market to market and security to security. Context: "I can buy size at 102-22," means that a trader can buy a significant amount at 102-22. Small is >10,000 shares. Medium is 15,000 - 25,000 shares. Good is 50,000 shares. Size is 100,000 shares. Good six figure size is 200,000 - 300,000 shares. Multiple six figure size is >300,000 shares of the market is actual number of shares represented in one's market, or bid and offering; unless specified, assumed to be at least 500 to 1000 shares, depending on the stock.
Size out the book: Overt action to exclude a public bid or offer from participation in a print through trading a larger size that exists in the book. Can never size out a market order. See: priority, shut out the book.
Skewed distribution: Probability distribution
in which an unequal number of observations lie below (negative skew) or above (positive skew) the mean.
Skewness: Negative skewness means there is a substantial probability of a big negative return. Positive skewness means that there is a greater than normal probability of a big positive return.
Skip-day settlement: The trade is settled one business day beyond what is normal.

Sleeper: Used in the context of general equities. Stock in which there is little investor interest but which has significant potential to gain in price once its attractions are recognized. Antithesis of high flyer.
Sleeping beauty: Often used in risk arbitrage. Potential takeover target that has not yet been approached by an acquirer. Such a company usually has particularly attractive features, such as a large amount of cash, or undervalued real estate or other assets.
Slippage: The difference between estimated transaction costs and actual transaction costs. The difference is usually composed of revisions to price difference or spread and commission costs.
Small-firm effect: The tendency of small firms (in terms of total market capitalization) to outperform the stock market (consisting of both large and small firms).
Small issues exemption: Securities issues that involve less than $1.5 million are not required to file a registration statement with the S.E.C.. Instead, they are governed by Regulation A, for which only a brief offering statement is needed.
Small Order Execution System (S.O.E.S.): Three-tiered system of automatic execution of an order at the best price. Size is either 200, 500, or, most often, 1000 shares.
Smidge: Used in the context of general equities. Small amount of price, usually +/- 1/8 or 1/4.
Smithsonian agreement: A revision to the Bretton Woods international monetary system which was signed at the Smithsonian Institution in Washington, D.C., U.S.A., in December 1971. Included were a new set of par values, widened bands to +/- 2.25% of par, and an increase in the official value of gold to US$38.00 per ounce.
Snowballing: Used in the context of general equities. Process by which the activities of stop orders in a declining or advancing market causes further downward or upward pressure on prices, thus triggering more stop orders and more price pressure, and so on.
Society for Worldwide Interbank Financial Telecommunications (S.W.I.F.T.): A dedicated computer network to support funds transfer messages internationally between over 900 member banks worldwide.
"Soft" Capital Rationing: Capital rationing that under certain circumstances can be violated or even viewed as made up of targets rather than absolute constraints.
Soft currency: A currency that is expected to drop in value relative to other currencies.
Soft dollars: The value of research services that brokerage houses supply to investment managers "free of charge" in exchange for the investment manager's business commissions.
Sold away: Refers to over-the-counter trading. Having sold stock to another dealer before making the present offering.
Sole proprietorship: A business owned by a single individual. The sole proprietorship pays no corporate income tax but has unlimited liability for business debts and obligations.
Source of funds seller: Used in the context of general equities. Customer seller of stock for the purpose of raising cash for other purchases. Hence, he will only sell at advantageous prices, and not aggressively.
Sovereign risk: The risk that a central bank will impose foreign exchange regulations that will reduce or negate the value of FX contracts. Also refers to the risk of government default on a loan made to it or guaranteed by it.
Span: To cover all contingencies within a specified range.
SPRDs: SPRDS (Spiders) are designed to track the value of the Standard & Poors 500 Composite Price Index. They are known as Spiders which is short for Standard&Poor's Depositary Receipt. They trade on the American Stock Exchange under the symbol SPY. They are similar to closed-end funds but are formally known as, UIT, a unit investment trust. One SPDR unit is valued at approximately one tenth (1/10) of the value of the S&P 500. Dividends are disbursed quarterly, and are based on the accumulated stock dividends held in trust, less any expenses of the trust. See: Mid-cap SPRD
Special dividend: Also referred to as an extra dividend. Dividend that is unlikely to be repeated.
Special drawing rights (S.D.R.): A form of international reserve assets, created by the IMF in 1967, whose value is based on a portfolio of widely used currencies.
Specialist: On an exchange, the member firm that is designated as the market maker (or dealer for a listed common stock). Only one specialist can be designated for a given stock, but dealers may be specialists for several stocks. In contrast, there can be multiple market makers in the O.T.C. market. This member of a stock exchange who maintains a "fair and orderly market" in one or more securities. Major functions include executing limit orders on behalf of other exchange members for a portion of the floor broker's commission, and buying or selling for his own account to counteract temporary imbalances in supply and demand and thus prevent wide swings in stock prices.
Specialist's book: Used for listed equity securities. Chronological record maintained by a specialist that includes the specialist's own inventory of securities, market orders to sell short, and limit orders and stop orders that other stock exchange members have placed with the specialist.
Specialist market: Used for listed equity securities. Market in a stock made solely by the specialist, as no public orders, and henceforth depth, exist in the market.
Specific issues market: The market in which dealers reverse in securities they wish to short.
Specific risk: See:unique risk.
Spectail: A dealer that does business with retail but that concentrates more on acquiring and financing its own speculative positions.
Speculative demand (for money): The need for cash to take advantage of investment opportunities that may arise.
Speculative grade bond: Bond rated Ba or lower by Moody's, or BB or lower by S&P, or an unrated bond.
Speculative motive: A desire to hold cash for the purpose of being in a position to exploit any attractive investment opportunity requiring a cash expenditure that might arise.
Speculator: One, who attempts to anticipate price changes and, through buying and selling contracts, aims to make profits. A speculator does not use the market in connection with the production, processing, marketing or handling of a product. See: trader.
Speed: Related: prepayment speed
Spider: See: SPDRs
Spike: Used in the context of general equities. Order ticket that shows the stock, price, number of shares, type, and account of the order. (Note: name refers to the ticket being spiked onto a metal spike upon execution or cancellation). Spike is also a sudden, drastic increase in a company's share price.
Spin-off: A company can create an independent company from an existing part of the company by selling or distributing new shares in the so-called spinoff.
Split: Sometimes, companies split their outstanding shares into a larger number of shares. If a company with 1 million shares did a two-for-one split, the company would have 2 million shares. An investor with 100 shares before the split would hold 200 shares after the split. The investor's percentage of equity in the company remains the same, and the price of the stock he owns is one-half the price of the stock on the day prior to the split.
Split-fee option: An option on an option. The buyer generally executes the split fee with first an initial fee, with a window period at the end of which (upon payment of a second fee) the original terms of the option may be extended to a later predetermined final notification date.
Split print: Used in the context of general equities. Block trade printed at two different prices. Often used in dividend rolls to get an average price equal to the dividend.
Split-rate tax system: A tax system that taxes retained earnings at a higher rate than earnings that are distributed as dividends.
Split stock: Used in the context of general equities. (1) Purchases or sales shared with others. (2) Division of the outstanding shares of a corporation into a large number of shares. Ordinarily, splits must be noted by directors and approved by shareholders.
Spoken for: Used in the context of general equities. Amount of opposing demand (placement) or supply (availability) the trader has in his efforts to cross the stock. Not open.
Spot exchange rates: Exchange rate on currency for immediate delivery. Related: forward exchange rate.
Spot futures parity theorem: Describes the theoretically correct relationship between spot and futures prices. Violation of the parity relationship gives rise to arbitrage opportunities.
Spot interest rate: Interest rate fixed today on a loan that is made today. Related: forward interest rates.
Spot lending: The origination of mortgages by processing applications taken directly from prospective borrowers.
Spot markets: Related: cash markets
Spot month: The nearest delivery month on a futures contract.
Spot price: The current market price of the actual physical commodity. Also called cash price. Current delivery price of a commodity traded in the spot market, in which goods are sold for cash and delivered immediately. Cash price. Antithesis of futures price.
Spot rate: The theoretical yield on a zero-coupon treasury security.
Spot rate curve: The graphical depiction of the relationship between the spot rates and maturity.
Spot secondary: Used in the context of general equities. Secondary distribution which may not require an S.E.C. registration statement and may be attempted without delay, an underwriting discount is normally contained in these offerings.
Spot trade: The purchase and sale of a foreign currency, commodity, or other item for immediate delivery.
Spread: (1) The gap between bid and ask prices of a stock or other security. (2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. Also known as a straddle. (3) Difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public. (4) The price an issuer pays above a benchmark fixed-income yield to borrow money.
Spread income: Also called margin income, the difference between income and cost. For a depository institution, the difference between the assets it invests in (loans
and securities) and the cost of its funds (deposits and other sources).
Spreadsheet: A computer program that organizes numerical data into rows and columns on
a terminal screen, for calculating and making adjustments based on new data.
Spread strategy: A strategy that involves a position in one or more options so that the cost of buying an option is funded entirely or in part by selling another option in the same underlying. Also called spreading.
SPX: Applies to derivative products. Symbol for the S&P 500 index.
SS1: Used in the context of general equities. Securities sales speaker box that transmits to all investment bank's regional trading and sales desks.
Staggered Board of Directors