eFinancialCareers

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 buy orders 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 credit agency.

Safe harbor
Often used in risk arbitrage as a form of shark repellent. A target company acquires 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 debt tax 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 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.

SAIF
See: Savings Association Insurance Fund

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.

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-deferred retirement plan.

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's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors.

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 benchmark index 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, float capitalization-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-denominated bond 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

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 public tender 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 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 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 value denominations 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 rate
Personal savings as a percentage of disposable personal income.

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 paper dealers 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 risk class 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 market yields.

Schedule 13d
Disclosure form required when more than 5% of any class of equity securities in a publicly held corporation is purchased.

Schedule C
Describes membership requirements and procedures of NASD, in its bylaws.

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. 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 bond certificates 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 macroeconomic indicator (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 investing public 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's securities 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 commodity exchange, bought and sold at market prices.

SEC
See: Securities & Exchange Commission

SEC
and other agencies to explain its intentions and notify the acquiree. See: Rule 13d.

SEC fee
Small fee the SEC charges to sellers of equity securities 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
Loans secured by real estate previously pledged in a first mortgage.

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.

Second round
Stage of venture capital financing following the start-up and first round stages and before the mezzanine level stage.

Second-preferred stock
Preferred stock issue 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.

Secondary distribution/offering
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 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 chip issues that behave differently than larger corporations' stocks.

Section 16(a)
Provision of the Securities Exchange Act of 1934 that requires company insiders to file periodic reports disclosing their holdings and changes in beneficial ownership of the company's equity 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's equity 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 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 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.

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 investing public against malpractice in the securities markets.

Securities Act of 1933
First law designed to regulate securities markets, 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 securities transactions.

Securities analysts
Related: Financial analysts

Securities and commodities exchanges
Exchanges on which securities, options, and futures contracts 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 financial markets.

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 industry trends, and keeps records of broker profits.

Securities Industry Committee on Arbitration (SICA)
A private group that provides mediation services in case of customer complaints against securities firms.

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-counter markets in which securities are traded.

Securitization
Creating a more or less standard investment instrument such as the mortgage pass-through security, by pooling assets 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 public capital 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 DOT orders.

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 asset returns 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 securities buyer 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 dividend yields.

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 company buys 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 finance current 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 commodity futures industries, including all national securities and commodities exchanges 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.

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