S&P 500 (Standard & Poor’s):

An index consisting of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe.

Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor’s. The S&P 500 is a market-value weighted index—each stock’s weight in the index is proportionate to its market value.

SEC (Securities and Exchange Commission):

A government commission created by Congress to regulate the securities markets and protect investors. In addition to regulation and protection, it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appointed by the U.S. President and approved by the Senate. The statutes administered by the SEC are designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce, through the mail or on the internet, must be registered with the SEC.

Santa Claus Rally:

A surge in the price of stocks that often occurs in the week between Christmas and New Year’s. There are numerous explanations for this phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses, and the fact that the pessimists are usually on vacation this week.

Seasonally Adjusted Annual Rate:

A rate adjustment used for economic or business data that attempts to remove the seasonal variations in the data. Most data will be affected by the time of the year. Adjusting for the seasonality in data means more accurate relative comparisons can be drawn from month to month all year.

Sector:

1. An area of the economy in which businesses share the same or a related product or service.

2. A group of securities in the same industry or market.

Sell-Off:

The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the value of the security.

Semiconductor:

Another word for “chip.” A semiconductor is a material such as silicon, which conducts electrical charges but not as well as metals such as copper and aluminum.

Serial Bond:

A bond issue in which a portion of the outstanding bonds matures at regular intervals until eventually all of the bonds have matured. As they mature gradually over a period of years, these bonds are used to finance a project providing regular, level or predictable income streams. Serial bonds are also used to finance projects with regular, level debt payments such as residential developments.

Share Purchase Rights:

A type of security that gives the holder the option, but not the obligation, to purchase a predetermined number of shares at a predetermined price, similar to a stock option or warrant. These rights are typically distributed to existing shareholders, who have the ability to trade these rights on an exchange.

Shareholder:

Any person, company, or other institution that owns at least 1 share in a company. A shareholder may also be referred to as a stockholder.

Shares:

Certificates representing ownership in a corporation.

Short Covering:

The purchase of shares previously sold short in order to close the open position.

Short Selling:

The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Sideways Market:

A situation in which stock price changes little over a period of time.

Special Assessment Bond:

A special type of municipal bond used to fund a development project. Interest owed to lenders is paid by taxes levied on the community benefiting from the particular bond-funded project.

Speculation:

The process of selecting investments with higher risk in order to profit from an anticipated price movement.

Speculative Risk:

A category of risk that, when undertaken, results in an uncertain degree of gain or loss. All speculative risks are made as conscious choices and are not just a result of uncontrollable circumstances.

Speculative risk is the opposite of pure risk.

Split Adjusted:

A stock price that takes into consideration the effect of a stock split in order to accurately compare the company’s current price to its historical price.

Spread:

1. The difference between the bid and the ask price of a security or asset.

2. An options position established by purchasing one option and selling another option of the same class but of a different series.

Stagflation:

A condition of slow economic growth and relatively high unemployment — a time of stagnation — accompanied by a rise in prices, or inflation.

Stock:

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.

There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders’ meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

Also known as “shares” or “equity”.

Stock Split:

The dividing of a company’s existing stock into multiple shares. In a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.

Stop Order:

An order to buy or sell a security when its price surpasses a particular point, thus ensuring a greater probability of achieving a predetermined entry or exit price, limiting the investor’s loss or locking in his or her profit. Once the price surpasses the predefined entry/exit point, the stop order becomes a market order.

Also referred to as a “stop” and/or “stop-loss order”.

Swing Trading:

A style of trading that attempts to capture gains in a stock within one to four days.

Systematic Risk:

The risk inherent to the entire market or entire market segment.

Also known as “un-diversifiable risk” or “market risk.”