Financial Glossary
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S
- A Nasdaq stock symbol indicating shares of beneficial interest.
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S&P 500 Dividend Aristocrats
- Companies that have had an increase in dividends for 25 consecutive years. The S&P Dividend Aristocrats index tracks the performance of these companies. A dividend aristocrat tends to be a large blue-chip company.
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S&P 500 Mini
- A derivative contract representing a designated fraction of the trading value of a standard S&P futures or options contract. Designed to expand the group of investors that could afford them, the S&P 500 Minis trade and act much like their pricier peers: the contracts are cash settled, follow the same expiration schedule and trade on the same stock exchanges.
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S&P 500/Citigroup Growth Index
- A market-capitalization-weighted index developed by Standard and Poor's consisting of those stocks within the S&P 500 Index that exhibit strong growth characteristics. The S&P 500/Citigroup Growth Index is a numerical ranking system based on three growth factors and four value factors to determine the constituents and their weightings.
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S&P 500/Citigroup Value Index
- A market-capitalization-weighted index developed by Standard and Poor's consisting of those stocks within the S&P 500 Index that exhibit strong value characteristics. The S&P 500/Citigroup Value Index uses a numerical ranking system based on four value factors and three growth factors to determine the constituents and their weightings.
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S&P Core Earnings
- The Standard and Poor's revised version of the measurement of core earnings, which excludes any gains related to pension activities, net revenues from the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option grants, pensions, restructuring of present operations or any merger and acquisition costs, R&D purchases, write-downs of depreciable or amortizable operating assets, and unrealized gains/losses from hedging activities are all included in the core earnings.
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S&P MidCap 400 Index
- This Standard & Poor's index serves as a barometer for the U.S. mid-cap equities sector and is the most widely followed mid-cap index in existence. To be included in the index, a stock must have a total market capitalization that ranges from roughly $750 million to $3 billion dollars. Stocks in this index represent household names from all major industries including energy, technology, healthcare, financial and manufacturing.
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S&P Phenomenon
- The tendency for a stock that is newly added to the S&P index to temporarily increase in price.
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S&P/ASX 200 Index
- The benchmark stock index for the Austrailian markets. It was created for the sake of investment managers who held Australian securities and needed a sufficiently large and liquid portfolio with which they could compare their investment performance. The index trades on the Australian Stock Exchange under the symbol XJO.
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S&P/Case-Shiller Home Price Indexes
- A group of indexes that tracks changes in home prices throughout the Untied States. The indexes are based on a constant level of data on properties that have undergone at least two arm's length transactions. Case-Shiller produces indexes representing certain metropolitan statistical areas (MSA) as well as a national index.
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S&P/Case-Shiller U.S. National Home Price Index
- An index that measures the change in value of the U.S. residential housing market. The S&P/Chase-Shiller U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm's-length transactions. The index is named for its creators, Karl Chase and Robert Shiller.
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S&P/Citigroup Broad Market Index (BMI) Global
- A market-capitalization-weighted index maintained by Standard and Poor's providing a broad measure of the global equities markets. The S&P/Citigroup Broad Market Index (BMI) Global includes approximately 11,000 companies in more than 52 countries covering both developed and emerging markets.
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S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S.
- A market-capitalization weighted index maintained by Standard and Poor's providing a broad measure of the global equities markets, excluding the U.S. market. The S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S. is a division of the S&P/Citigroup Broad Market Index (BMI) Global, which includes approximately 11,000 companies in more than 52 countries covering both developed and emerging markets. The S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S. contains approximately 8,000 stocks.
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S&P/TSX Composite Index
- The Canadian equivalent to the S&P 500 market index in the United States. The S&P/TSX Composite Index contains stocks of the largest companies on the Toronto Stock Exchange (TSX). The index is calculated by Standard and Poor's, and contains both common stock and income trust units. Additions to the index are generally based on quarterly reviews.
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S-3 Filing
- The most simplified registration form. It can only be used by companies that have been required to report under the '34 Act for a minimum of twelve months and have met the timely filing requirements set forth under Form S-2.
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S-8 Filing
- A SEC filing required for companies wishing to issue equity to their employees.
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Sacrifice Ratio
- An economic ratio that measures the costs associated with slowing down economic output to change inflationary trends. The ratio is calculated by taking the cost of lost production and dividing it by the percentage change in inflation, and its quotient gives the loss of output per 1% change in inflation:
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Safe Asset
- Assets which, in and of themselves, do not carry a high likelihood of lawsuit risk. Mere ownership of this type of asset does not expose the asset owner to a significant risk of litigation.
Assets such as stocks, mutual funds, bonds, bank accounts and your personal residence are examples of safe assets.
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Safe Harbor
- 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. In effect, this gives the target company a "safe harbor."
3. An accounting method that avoids legal or tax regulations and allows for a simpler method (usually) of determining a tax consequence than those methods described by the precise language of the tax code.
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Safekeeping
- The storage of assets or other items of value in a protected area.
Individuals may use self-directed methods of safekeeping or the services of a bank or brokerage firm. Financial institutions are custodians and are therefore legally responsible for the items in safekeeping.
Also known as "safekeep".
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Saitori
- A member of the Tokyo Stock Exchange who facilitates the trading of securities by matching buy and sell orders. Their role is to make the market as orderly and efficient as possible.
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Salad Oil Scandal
- One of the worst corporate scandals of its time. It occurred when Allied Crude Vegetable Oil Company discovered that banks would make loans secured by its salad oil inventory.
When the ships full of salad oil would arrive in the docks, inspectors would test it and confirm that the ship was full of salad oil. However, the company didn't remind anyone that oil floats on water. They had filled salad oil tanks with water and put a few feet of oil on top, fooling everyone. The company would even transfer oil to different tanks while taking inspectors out to lunch. In 1963, the scam was busted and over $175 million worth of salad oil was missing.
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Salary Freeze
- The action of a company suspending salary increases for a period of time.
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Salary Reduction Contribution
- A cash- or deferred-contribution arrangement of an employer-sponsored retirement plan, under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan.
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Salary Reduction Simplified Employee Pension Plan - SARSEP
- A plan offered by small companies - typically those with fewer than 25 employees - that allows employees to make pretax contributions to their Individual Retirement Accounts (IRAs) through salary reduction.
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Sale
- 1) In general, a transaction between two parties where the buyer receives goods (tangible or intangible), services and/or assets in exchange for money.
2) An agreement between a buyer and seller on the price of a security.
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Sale and Repurchase Agreement - SRA
- An open market operation, implemented by the central Bank of Canada, that is designed to affect overnight interest rates and modify the supply of money.
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Sales And Purchase Agreement - SPA
- A legal contract that obligates a buyer to buy and a seller to sell a product or service. SPAs are found in all types of businesses but are most often associated with real estate deals as a way of finalizing the interests of both parties before closing the deal.
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Sales Charge
- A commission paid by an investor on his or her investment in a mutual fund. The sales charge is paid to a financial intermediary (broker, financial planner, investment adviser, etc.) for selling the fund and is intended to provide compensation for the financial salesperson's efforts in assisting clients in selecting the mutual funds best suited to their needs.
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Sales Per Share
- A ratio that computes the total revenue earned per share over a 12-month period. It is calculated by dividing total revenue earned in a fiscal year by the weighted average of shares outstanding for that fiscal year:
Also known as "revenue per share".
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Sales Tax
- A tax imposed by the government at the point of sale on retail goods and services. It is collected by the retailer and passed on to the state.
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Sales to Cash Flow Ratio
- A measure of whether or not a company's sales are high in comparison to its cash flow.
Calculated as:
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Sallie Mae - Student Loan Marketing Association
- A publicly traded company that is the largest provider of educational loans in the U.S. Along with providing student loans, Sallie Mae purchases student loans from the original lenders and provides financing to state student-loan agencies.
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Salomon Brothers World Equity Index - SBWEI
- An index that measures the performance of fixed-income and equity securities from domestic and international markets that consist of companies with a float of at least $100 million.
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Salvage Value
- The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. The value can be a best guess of the end value or can be determined by a regulatory body such as the IRS.
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Same Property Rule
- A regulation relating to IRA rollovers stipulating that whenever a financial asset is withdrawn from a retirement account or IRA (for the purpose of funding a new IRA, for example), it must be rolled over into the same property (or format) of an IRA. Unless the party involved is over 59.5 years of age, failure to comply with this rule will result in the IRS taxing the withdrawn asset as ordinary income.
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Same Store Sales
- A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more.
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Same-Day Substitution
- An offsetting change in a margin account, made over the trading day, that results in no overall change in the value of the account. When a same-day substitution is made, a margin call is not generated.
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Sample
- A subset containing the characteristics of a larger population. Samples are used in statistical testing when population sizes are too large for the test to include all possible members or observations. A sample should represent the whole population and not reflect bias toward a specific attribute.
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Sample Selection Bias
- A type of bias caused by choosing non-random data for statistical analysis. The bias exists due to a flaw in the sample selection process, where a subset of the data is systematically excluded due to a particular attribute. The exclusion of the subset can influence the statistical significance of the test, or produce distorted results.
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Sampling
- A process used in statistical analysis in which a predetermined number of observations will be taken from a larger population. The methodology used to sample from a larger population will depend on the type of analysis being performed, but will include simple random sampling, systematic sampling and observational sampling.
The sample should be a representation of the general population.
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Sampling Distribution
- A probability distribution of a statistic obtained through a large number of samples drawn from a specific population. The sampling distribution of a given population is the distribution of frequencies of a range of different outcomes that could possibly occur for a statistic of a population.
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Sampling Error
- A statistical error to which an analyst exposes a model simply because he or she is working with sample data rather than population or census data. Using sample data presents the risk that results found in an analysis do not represent the results that would be obtained from using data involving the entire population from which the sample was derived.
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Samurai Bond
- A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations. Other types of yen-denominated bonds are Euroyens issued in countries other than Japan.
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Samurai Market
- A slang term for the stock market in Japan. Samurai market is usually used buy non-residents of Japan, with a reference to the iconic Japanese warrior - the samurai.
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Sandbag
- A stalling tactic used by management to deter a company that is showing interest in taking them over.
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Sandwich Generation
- The generation of middle-aged individuals who are pressured to support both aging parents and growing children.
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Sanku (Three Gaps) Pattern
- The Japanese word for a candlestick pattern that consists of three individual gaps located within a well-defined trend. After the appearance of the third gap, the pattern is used to suggest an impending reversal in the direction of the current trend.
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Santa Claus Rally
- A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations for the Santa Claus Rally 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.
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Santiago Stock Exchange (SSE) .SN
- Located in Santiago, the SGO is the premier stock exchange of Chile. It trades stocks, bonds, investment funds, derivatives and gold and silver Chilean coins. It also has an electronic trading platform called Telepregon, which trades U.S. dollars. Only market shares are traded on the floor in conjunction with screen trades.
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Sao Paolo Stock Exchange (SAO) .SA
- Based in Sao Paolo, Brazil, this exchange has the fourth-largest market cap in all of the Americas and the 13th largest in the world. It is also known as the BM&F Bovespa. The main index of this exchange is the Indice Bovespa.
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SAR (Saudi Riyal)
- The currency abbreviation the Saudi riyal (SAR), the currency for Saudi Arabia. The Saudi riyal is made up of 100 halala or 20 ghirsh, and is often presented with the symbol SR. The Saudi riyal is pegged to the U.S. dollar at about 3.75 SAR.
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Sarbanes-Oxley Act Of 2002 - SOX
- An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. SOX was enacted in response to the accounting scandals in the early 2000s. Scandals such as Enron, Tyco, and WorldCom shook investor confidence in financial statements and required an overhaul of regulatory standards.
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Saturday Night Special
- A slang term used to refer to a surprise takeover attempt.
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Saucer
- A technical charting formation that indicates that a stock's price has reached its low and that the downward trend has come to a close.
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Saver's Tax Credit
- A non-refundable tax credit available to lower income individuals and households that contribute to qualified retirement savings plans. This includes employer-sponsored plans such as 401(k), SIMPLE and SEP plans, or the governmental 457 plan, along with contributions to Traditional and Roth IRAs. The amount of the credit will depend on the adjusted gross income of the individual or household and the size of the contribution.
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Savings
- According to Keynesian economics, the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time.
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Savings Account
- A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the account holder may not be able to write checks from the account (without incurring extra fees or expenses) and the account is likely to have a limited number of free transfers/transactions. Savings account funds are considered one of the most liquid investments outside of demand accounts and cash.
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Savings And Loan Crisis - S&L
- One of the largest financial scandals in U.S. history, the Savings and Loan Crisis emerged in the late 1970s and came to a head in the 1980s, finally ending in the early 1990s. In the volatile interest rate climate of the '70s, large numbers of depositors removed their funds from savings and loan institutions (S&Ls) and put them in money market funds, where they could get higher interest rates since money market funds weren't governed by Regulation Q, which capped the amount of interest S&Ls could pay to depositors. S&Ls, which were largely making their money from low-interest mortgages, did not have the means to offer higher interest rates, though they tried to once interest rate ceilings were dropped in the early '80s. As S&L regulations loosened, they engaged in increasingly risky activities, including commercial real estate lending and investments in junk bonds.
Also known as "thrifts".
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Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE
- A retirement plan that may be established by employers, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SIMPLE. The employer makes either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions.
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SBD
- In currencies, this is the abbreviation for the Solomon Islands Dollar.
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SBD (Solomon Islands Dollar)
- The currency abbreviation for the Solomon Islands dollar (SBD), the currency for the Solomon Islands. The Solomon Islands dollar is made up of 100 cents and is often presented with the symbol $ or SI$ to set it apart from other dollar-based currencies.
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SBO-401(k)
- A tax-deferred, government-registered retirement savings plan that is specially designed for small business owners (SBOs). Eligible participants for an SBO-401(k) are businesses that employ the business's owners and their spouses. The business must not have any other eligible employees.
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Scalability
- A characteristic of a system, model or function that describes its capability to cope and perform under an increased or expanding workload. A system that scales well will be able to maintain or even increase its level of performance or efficiency when tested by larger operational demands.
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Scale In
- The process of purchasing shares as the price decreases. To scale in (or scaling in) means to set a target price and then invest in increments as the stock falls below that price. This buying continues until the price stops falling or the intended trade size is reached. Scaling in will, ideally, lower the average purchase price. If the stock does not come back to the target price, however, the investor ends up purchasing a losing stock.
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Scale Order
- A type of order that comprises several limit orders at incrementally increasing or decreasing prices. If it is a buy scale order, the limit orders will decrease in price, triggering buys at lower prices as the price starts to fall. With a sell order, the limit orders will increase in price, allowing the trader to take advantage of increasing prices, thereby locking in higher returns.
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Scale Out
- The process of selling portions of total held shares while the price increases. To scale out (or scaling out) means to get out of a position (e.g., to sell) in increments as the price climbs. This strategy allows the investor to take profits while the price is increasing, rather than trying to time the peak price. If the actual value continues to increase, however, the investor could be selling a winner too early.
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Scalpers
- A person trading in the equities or options and futures market who holds a position for a very short period of time, attempting to make money off of the bid-ask spread.
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Scalping
- A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.
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Scarcity
- The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
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Scenario Analysis
- The process of estimating the expected value of a portfolio after a given period of time, assuming specific changes in the values of the portfolio's securities or key factors that would affect security values, such as changes in the interest rate.
Scenario analysis commonly focuses on estimating what a portfolio's value would decrease to if an unfavorable event, or the "worst-case scenario", were realized. Scenario analysis involves computing different reinvestment rates for expected returns that are reinvested during the investment horizon.
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Schedule 13D
- A form that must be filed with the SEC under Rule 13D. The form is required when a person or group acquires more than 5% of any class of a company's shares. This information must be disclosed within 10 days of the transaction. Rule 13D requires the owner to also disclose any other person who has voting power or the power to sell the security.
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Schedule 13E-4
- This schedule is known as an "issuer tender offer statement." It must be filed by certain reporting companies that make tender offers for their own securities – a "self-tender." Schedule 13E-4 is filed in connection with Rule 13e-4 under the 1934 Act imposing added requirements that an issuer must comply with when it is making an issuer tender offer.
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Schedule 13E-4F
- This schedule may be used by a Canadian foreign private issuer that makes an issuer tender offer for its equity shares, provided that U.S. holders hold less than 40% of the class of shares subject to the offer. The Canadian issuer must, of course, comply with relevant Canadian regulations regarding issuer tender offer statements.
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Schedule 13G
- An SEC form similar to the Schedule 13D used to report a party's ownership of stock that is over 5% of the company. Schedule 13G is shorter and requires less information from the filing party. Ownership of over 5% in a publicly-traded stock is considered to be significant ownership, and therefore must be reported to the public.
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Schedule 14C
- This schedule sets forth the disclosure requirements for information statements. Generally, a company with securities registered under Section 12 of the 1934 Act must send an information statement to every holder of the registered security who is entitled to vote on any matter for which the company is not soliciting proxies. If the company does solicit proxies, Schedule 14A may be required.
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Schedule 14D-9
- This schedule must be filed with the SEC when an interested party such as an issuer, a beneficial owner of securities or a representative of either, makes a solicitation or recommendation statement to the shareholders with respect to a tender offer which is pursuant to Section 14(d)(4) of the 1934 Securities Exchange Act.
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Schedule 14D-9F
- This schedule may be used by a Canadian foreign private issuer or by any of its directors or officers when the issuer is the subject of a tender offer filed on Schedule 14D-1F. Schedule 14D-9F is used to respond to tender offers made for the company.
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Schedule A
- A U.S. income tax form used by taxpayers to report itemized deductions, which can help reduce an individual's federal tax liability. Expenses that can be itemized and claimed on the form include medical and dental expenses, amounts paid for particular taxes and interest expenses as well as specific losses due to theft.
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Schedule D
- A U.S. income tax form used by taxpayers to report their realized capital gains or losses. Investors are required to report their capital gains (and losses) from the sales of assets, which result in different cash values being received for them than what was originally paid, in order to affix some amount of taxation to the income and wealth that is generated through investment activities.
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Schedule I Bank
- A Canadian financial institution regulated under the Federal Bank Act. A Schedule I bank cannot be wholly owned by non-residents.
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Schedule II Bank
- A bank which is a subsidiary of a foreign bank and authorized to accept deposits within Canada. A Schedule II bank is a financial institution regulated by Canada's Federal Bank Act and can be owned either domestically or foreignly. A foreign Schedule II bank can be owned by non-residents, and a Canadian Schedule II bank is owned by a Schedule I bank.
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Schedule TO-C
- This schedule, filed with the SEC, is simply any written communication relating to a tender offer. The tender offer may be either an issuer or a third party tender offer. Schedule TO-C also requires the calculation of the filing fee.
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Schedule TO-I
- This schedule is known as an "issuer tender offer statement." It must be filed by certain reporting companies that make tender offers for their own securities – a "self-tender." In addition, Rule 13e-4, under the 1934 Act, imposes added requirements that an issuer must comply with when it is making an issuer tender offer. This schedule replaced Schedule 13e-4 as of January, 2000.
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Schedule TO-T
- This schedule must be filed with the SEC by any entity, other than the issuer itself, making a tender offer for certain equity securities registered pursuant to Section 14d or 13e of the 1934 Act. This schedule replaced Schedule 14D-1 in January, 2000.
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Scheduled Recast
- A recalculation of the remaining amortization schedule of a mortgage at a certain date set and known in advance. A scheduled recast is part of some mortgage programs because those mortgages have features which allow for payments to be made early for mortgages which are not fully amortizing. Therefore, at the scheduled recast date, a new amortization schedule is calculated based on the remaining term and principal balance at the time which ensures that the mortgage will be paid off by the end of its original term. This usually means that the remaining scheduled payments will increase.
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Scope
- A project management term for the combined objectives and requirements necessary to complete a project. Properly defining the scope of a project allows a manager to estimate costs and the time required to finish the project.
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Scorched Earth Policy
- An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring firm.
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SCR
- In currencies, this is the abbreviation for the Seychelles Rupee.
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SCR (Seychelles Rupee)
- The currency abbreviation for the Seychelles rupee (SCR), the currency for Seychelles. The Seychelles rupee is made up of 100 cents and is often presented with the symbol SR or SRe. The Seychelles rupee is spelled "roupi" in the local Seselwa language.
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Scrip
- 1. A written document that acknowledges a debt.
2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of full shares.
3. Currency issued by a private corporation
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Scripophily
- The hobby of collecting antique bonds, stocks and other financial instruments based on their esthetics and prominence in the financial world.
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SDD
- In currencies, this is the abbreviation for the Sudanese Dinar.
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SDD (Sudanese Dinar)
- The currency abbreviation for the Sudanese dinar (SDD), the currency for Sudan between June of 1992 and January of 2007. The Sudanese dinar was made up of 100 dirham and was often presented with the symbol LSd or £Sd.
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SDP
- In currencies, this is the abbreviation for the Sudanese Pound.
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SDP (Sudanese Pound)
- The currency abbreviation or currency symbol for the first Sudanese pound (SDP), the currency for Sudan from 1956 to 1992. The Sudanese pound was made up of 100 piastre, or qirush in Arabic. The Sudanese pound was known as "junaih" in Arabic.
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Seagull Option
- A three-legged option strategy, often used in forex trading, that can provide a hedge against the undesired movement of an underlying asset. A seagull option is structured through the purchase of a call spread and the sale of a put option (or vice versa).
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Seasonality
- A characteristic of a time series in which the data experiences regular and predictable changes which recur every calendar year. Any predictable change or pattern in a time series that recurs or repeats over a one-year period can be said to be seasonal.
Note that seasonal effects are different from cyclical effects, as seasonal cycles are contained within one calendar year, while cyclical effects (such as boosted sales due to low unemployment rates) can span time periods shorter or longer than one calendar year.
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Seasonally Adjusted Annual Rate - SAAR
- 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.
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Seasoned Issue
- An issue of securities from an established company whose existing shares have exhibited stable price movements and substantial trading volume over time, thereby earning a good reputation.
This is also known as a "seasoned equity offering" (SEO).
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Seasoned Security
- 1. A financial instrument that has been publicly traded in the secondary market long enough to eliminate any short-term effects from its initial public offering.
2. Any security that has been issued and actively traded in the Euromarket for at least 40 days.
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Seasons
- A slang phrase used by venture capitalists to refer to the current stage of a proposed business idea or concept.
The progression is spring (infancy), summer (adolescence), fall (maturing), winter (mature).
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Seat
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SEC DEL AM Filing
- Annual and transition reports pursuant to Section 13 and 15(d) where the Regulation S-K item 405 box on the cover page is checked. Regulation S-K concerns instructions for the SEC DEL AM filing under the Securities Acts of 1933 and 1934.
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SEC Fee
- A nominal fee that was created by the Securities Exchange Act of 1934 to be an additional transaction cost attached to the selling of exchange-listed equities. This fee is usually listed as a separate fee, independent of any associated brokerage commissions or fees.
Up until 2007, the fee is 1% of one three-hundredth of the dollar value of the equities sold. After 2007, the fee will be 1% of one eight-hundredth of the dollar value of the equities sold.
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SEC Form 1
- An application for and amendments to an application for registration as a national securities exchange or exemption from registration pursuant to section 5 of the Securities Exchange Act of 1934. Section 6 of the Exchange Act requires that stock exchanges register with the SEC Form 1 in order to be considered national securities exchanges.
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SEC Form 1-A
- A filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities. Securities issued in reliance upon Regulation A provisions must provide investors with an offering statement meeting the requirements of Form 1-A.
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SEC Form 1-E
- A notification form required by the SEC. This form lists all relevant information pertaining to a small business issuer of securities, including data on its principals, location and size, among other things. Affiliates, directors and officers and jurisdiction of issuance are also covered.
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SEC Form 10-12B
- A filing with the Securities and Exchange Commission (SEC), also known as the Initial General Form for Registration of Securities, required when a public company issues a new class of stock through a spin-off. SEC Form 10-12B contains information about the original shares issued, the new shares affected and information about how and on which exchange the new shares will trade.
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SEC Form 10-12G
- A filing with the Securities and Exchange Commission (SEC), also known as the "Initial Form for General Registration of Securities", required when a publicly traded corporation issues new shares of a company's stock. SEC Form 10-12G contains information about the number of shares issued, their par value, ownership information for key shareholders and executives, and specific information about the company's line of business.
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SEC Form 10-C
- A form filed with the Securities and Exchange Commission (SEC) by companies whose securities are quoted on the NASDAQ interdealer quotation system. This form is used any time there is a change in oustanding shares in excess of 5% or if there is a change in the name of the issuer.
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SEC Form 10-K405
- A form used by the Securities and Exchange Commission (SEC) prior to 2003. SEC Form 10-K405 was used to indicate that an officer or director of a company failed to file a Form 4 (or similar Form 3 or Form 5) on time, meaning that they did not disclose their insider trading activities within the required time frame.
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SEC Form 10-KSB405
- A Securities and Exchange Commission (SEC) form similar to the 10-K405 but for small businesses. Both forms were used by the SEC prior to 2003. It was used when a company did not file a Form 4 (or similar 3 or 5) disclosing their insider trading activities on time.
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SEC Form 10-KT
- A filing with the Securities and Exchange Commission (SEC) that is submitted in lieu of or in addition to a standard 10-K annual report when a company changes its fiscal year-end. The report provides a comprehensive overview of the company's business activities. Companies return to filing a standard 10-K report once the transition to the new fiscal year is complete.
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SEC Form 10-KT405
- An obsolete Securities and Exchange Commission (SEC) form that was submitted in lieu of a 10-K405 when a company changed its fiscal year-end. SEC Form 10-KT405, and the 10-K405, were used by the SEC prior to 2003. The form was used when a company was not punctual in filing a Form 4 (or similar Form 3 or Form 5) disclosing its insider trading activities.
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SEC Form 10-Q
- A comprehensive report of a company's performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission. In the 10-Q, firms are required to disclose relevant information regarding their financial position. The form must be submitted on time, and the information should be available to all interested parties.
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SEC Form 10-QT
- An SEC form used when there is a presentation of "transitional periods" rather than the standard three-month period covered by a traditional 10-Q. SEC Form 10-QT is typically filed subsequent to an 8-K filing notifying the SEC of a change of fiscal year end. It must conform in all other respects to the requirements of a form 10-Q except for the time periods presented.
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SEC Form 10SB12B
- A filing with the Securities and Exchange Commission (SEC), also known as the "Initial Registration of Securities for a Small Business Form", used to register new securities that will be available for public investment. The same general security registration information is required on SEC Form 10SB12B as is on SEC Form 10-12, but in a consolidated format meant to ease the filing burden of smaller companies. This information includes information about the company's management, number of shares to be issued, par value of issued shares and the exchange where the shares will trade.
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SEC Form 11-KT
- A form filed with the Securities and Exchange Commission (SEC) that a company submits in lieu of, or in addition to, a standard 11-K report when a company changes its fiscal year-end. The SEC Form 11-K is a special report for employee stock purchase, savings, and similar plans. The form is required in addition to the 10-KT, which provides a comprehensive overview of the company's business activities.
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SEC Form 15-12B
- A certification of termination of registration of a class of security under Section 12(g) or notice of suspension of duty to file reports pursuant to Section 13 and 15(d) of the 1934 Securities Exchange Act Section 12(b).
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SEC Form 15-12G
- A certification of termination of registration of a class of security under Section 12(g), or notice of suspension of duty to file reports pursuant to Section 13 and 15(d) of the 1934 Securities Exchange Act Section 12(g).
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SEC Form 15-15D
- A certification of termination of registration of a class of security under Section 12(g), or notice of suspension of duty to file reports pursuant to Section 13 and 15(d) of the 1934 Securities Exchange Act Section 13 and 15(d).
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SEC Form 17-H
- A report that is filed by a securities broker-dealer with the Securities and Exchange Commission, disclosing its business activities related to risk assessment. Required reporting includes a copy of the current organizational chart, copies of all risk management and related policies, information related to any legal proceedings and financial statements.
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SEC Form 18-12B
- A filing with the Securities and Exchange Commission (SEC), also known as the Application for Registration of Foreign Governments and Political Subdivisions, used to register securities to be offered by foreign governments in the U.S. markets. The information required on SEC Form 18-12B includes the title, type and amount of security, as well as the exchanges it will trade on.
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SEC Form 18-12G
- A filing with the Securities and Exchange Commission (SEC), also known as the "Application for Registration of Foreign Governments and Political Subdivisions", required for foreign governments wishing to offer a security for sale on the U.S. market. The information required from a foreign government on this form includes the title, type and amount of security, as well as the exchanges it will trade on.
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SEC Form 19b-4
- A form that is used to inform the SEC of a proposed rule change by a self-regulatory organization or SRO pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. Many such rule changes may take effect upon filing SEC Form 19b-4 with the SEC.
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SEC Form 19b-4(e)
- A form that is required to be filed by self-regulatory organizations with the SEC every time they wish to list a new derivative securities product pursuant to Rule 19b-4(e) of the Securities Exchange Act of 1934. SEC Form 19b-4(e) must be filed at least five business days after commencement of trading of the new derivative securities product.
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SEC Form 19b-7
- A form that is used to inform the SEC of a proposed rule change by a self-regulatory organization (SRO) or SRO pursuant to Rule 19b-7 under the Securities Exchange Act of 1934. Many such rule changes may take effect upon filing SEC Form 19b-7 with the SEC.
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SEC Form 2-A
- A filing with the Securities and Exchange Commission (SEC) required to disclose the sale and use of proceeds of certain securities.
Each issuer and/or holder of securities sold in reliance upon Regulation A provisions must file seven copies of this report either every two quarters until all the proceeds of the security sale have been applied or 30 calendar days after the final sale, whichever is later. The last filing is labeled the "final report."
It is important to note that the temporary investment of proceeds pending final application does not constitute an application of the proceeds and does not need to be included in this filing.
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SEC Form 2-E
- A filing with the Securities and Exchange Commission (SEC) that must be submitted semiannually by small business investment companies that have engaged in a limited offering of their securities. The form must contain information regarding the start and end date of the offering, number of shares offered, number of shares sold, amounts received, expenses paid, whether the offering has been discontinued and why, and the names of all brokers and dealers who participated in the offering.
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SEC Form 20-F
- A form issued by the Securities and Exchange Commission (SEC) that must be submitted by all "foreign private issuers" that have listed equity shares on exchanges in the United States. Form 20-F calls for the submission of an annual report within six months of the end of the company's fiscal year, or if the fiscal year-end date changes.
The reporting and eligibility requirements for form 20-F are stated in the Securities Exchange Act of 1934. The information requirements are not as strict as for domestic U.S. companies; companies in which less than 50% of voting shares are held by U.S. investors may be eligible.
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SEC Form 20FR12B
- A filing with the Securities and Exchange Commission (SEC), which is used to register the securities of a foreign company that wishes to trade on U.S. exchanges. This filing is also known as the Registration for a Class of Foreign Private Issues. Information required on this form includes U.S.-based investor relations contacts, an English translation of the company's name, the expected exchange of trading and a full security description.
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SEC Form 20FR12G
- A filing with the Securities and Exchange Commission (SEC) which is required when a non-U.S. company wishes to issue securities for purchase on U.S. exchanges. This form is also known as the Registration for a Class of Foreign Private Issues. Information required on Form 20FR12G includes domestic contact information, the company's name translated into English, the proposed exchange for trading and the title of the security.
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SEC Form 24F-1
- A filing with the Securities and Exchange Commission (SEC) that is required when an investment company sells more shares than its initial registration filing had stated. This form is also known as the Notice of Election of Retroactive Registration. Information on this form includes the number of shares to be retroactively registered and the date of retroactive registration.
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SEC Form 24F-2
- A filing with the Securities and Exchange Commission (SEC) that must be submitted annually by open-end management investment companies, face-amount certificate companies, and unit investment trusts. The form must specify the name of each series or class of securities for which the form is filed, and must be filed within 90 days of the end of the fiscal year during which the company has publicly offered such securities.
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SEC Form 24F-2EL
- A discontinued filing with the Securities and Exchange Commission (SEC), also known as the "Annual Notice of Securities Sold By an Investment Company". It includes the total number of shares and corresponding dollar amount, that have been sold by the investment company during the previous year.
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SEC Form 24F-2NT
- A filing with the Securities and Exchange Commission (SEC) that is required when an investment company, such as a mutual fund, sells more shares than initially stated in its registration filing. Information included on SEC Form 24F-2NT includes the amount of additional shares to be registered and the retroactive registration date for the additional shares.
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SEC Form 25
- A notification given to the SEC by a national securities exchange telling of the removal from listing on that exchange and registration of matured, redeemed or retired corporate securities. SEC Form 25 is required by Rule 12d2-2 of the Securities Exchange Act of 1934. A security is considered to be delisted 10 days after the filing of Form 25 with the SEC.
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SEC Form 26
- A form that is filed by a national securities exchange to notify the SEC of the admission to trading of a substituted or additional class of security under Rule 12a-5 of the Securities Exchange Act of 1934. SEC Form 26 informs the SEC of the dates that the security was or will be admitted for trading, both when-issued and in the regular way.
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SEC Form 305B2
- The application for the designation of a new trustee. SEC Form 305B2 is an initial statement filed with the SEC that contains any pre-effective amendments. This form allows for a designation of a trustee under the Trust Indenture Act.
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SEC Form 35-APP
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be submitted by public utility holding companies wanting to engage in a transaction for which no other form of application was prescribed. SEC Form 35-APP provided investors and the SEC with detailed information about the proposed transaction as part of the SEC's efforts to regulate public utility holding companies.
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SEC Form 35-CERT
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be submitted by public utility holding companies to certify compliance with terms and conditions required by Rule 24 of the Public Utility Holding Company Act (PUHCA) of 1935. This form provided investors and the SEC with detailed information about the registrant's compliance as part of the SEC's efforts to regulate public utility holding companies.
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SEC Form 424A
- The prospectus form that a company must file if it has made significant changes to a previously-filed prospectus submitted as part of its registration statement. A company must provide five copies of each prospectus form prior to the effective registration date of the change.
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SEC Form 424B1
- The prospectus form that a company must file to provide additional information that was not included in its initial prospectus filing upon registration. Companies are required to file prospectus form 424B1 in accordance with SEC Rule 424(b)(1) per the Securities Exchange Act of 1933.
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SEC Form 424B2
- The prospectus form that a company must file if it is making a primary offering of securities on a delayed basis. SEC form 424B2 must include information about the security being offered, including the price set for the public offering and the method of distribution.
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SEC Form 424B3
- The prospectus form that a company is required to file, detailing the information that created a significant change from previously-supplied information provided in the company's prior prospectus filed with the SEC. Companies are required to file prospectus form 424B3 in accordance with Rule 424(b)(3) of the Securities Exchange Act of 1933.
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SEC Form 424B4
- The prospectus form that a company must file to disclose information referred to in forms 424B1 and 424B3. Companies are required to file prospectus form 424B4 in accordance with Rule 424(b)(4) of the Securities Exchange Act of 1933.
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SEC Form 424B5
- The prospectus form that companies must file to disclose information referred to in forms 424B2 and form 424B3. It outlines updated prospectus information, facts or events from previously-filed forms.
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SEC Form 425
- The prospectus form that companies must file to disclose information regarding business combination transactions. A business combination can refer to a statutory merger between two or more companies or a statutory consolidation. Companies are required to file prospectus form 425 in accordance with rules 425 and 165 of the Securities Exchange Act of 1933.
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SEC Form 45B-3
- A form filed with the SEC regarding the extension of credit previously requested. This is a transitional form only.
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SEC Form 485A24E
- A registration statement for separate accounts (management investment companies), which contains post-effective amendments filed pursuant to Rule 485(a) with additional shares under Rule 24e-2. The SEC Form 485A24E filing cannot be submitted as an Investment-Company-Act-of-1940-only filing.
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SEC Form 485A24F
- A registration statement for separate accounts (management investment companies), which contains post-effective amendments filed pursuant to Rule 485(a) with additional shares under Rule 24f-2. SEC Form 485A24F cannot be submitted as an Investment Company-Act-of-1940-only filing.
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SEC Form 487
- A filing with the Securities and Exchange Commission (SEC), also known as the Pre-Effective Pricing Amendments Form, that is used to amend the information contained on a previously filed SEC Form S-6 for Unit Investment Trust Registration. The information required on SEC Form 487 is the same as required on as the initial Form S-6, including management company info, risks, costs and portfolio objectives.
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SEC Form 497
- The SEC form that investment companies use to file their definitive materials in the SEC's EDGAR filing system. Definitive materials include any piece of information that could be relevant to an investor's decision about buying, selling or keeping their financial share in a company.
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SEC Form 497K1
- A filing with the Securities and Exchange Commission (SEC), also known as the Profiles for Certain Open-Ended Investment Companies Form, used to file official copies of a "Short-Form Prospectus" for open-ended mutual funds. The information contained on SEC Form 497K1 includes the risks, costs, potential holdings, and redemption procedures for an open-ended mutual fund being sold to the public.
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SEC Form 6-K
- A form administrated by the Securities and Exchange Commission (SEC), the 6-K is a required submission for foreign private issuers of securities, pursuant to stated rules in the Securities Exchange Act of 1934. Any information that a foreign company issues to its local securities regulators, investors or stock exchange must also be submitted on the Form 6-K. As such, the 6-K is a catch-all for material information that arises in between annual and quarterly financial reports, which are also submitted to the SEC.
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SEC Form 8-A12B
- A filing with the Securities and Exchange Commission (SEC) that is required when a corporation wishes to issue certain classes of securities, including rights to buy such securities at a future date. This filing is also known as the Registration for Listing of a Security on a National Exchange Form. Included in SEC Form 8-A12B are details of the issuer and the security.
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SEC Form 8-A12G
- A filing with the Securities and Exchange Commission (SEC), also known as the Registration for Listing of a Security on a National Exchange Form, required when a company issues certain stock or bond securities, including warrants and convertible bonds. Information required on Form 8-A12G includes the type of security, its terms (par value, interest rate, maturity, etc), as well as contact information for the issuing company. Related forms: SEC Forms 8-A12G/A, 8-A12B, 8-A12B/A
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SEC Form 8-B12B
- A filing with the Securities and Exchange Commission (SEC) which concerns registration of securities of certain successor issuers pursuant to section 12(b) of the Securities Exchange Act of 1934. Section 12(b) concerns the registration of a security by its issuer on a national securities exchange. Section 12(b) covers all of the forms and financial statements that are required by the SEC to approve a securities registration.
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SEC Form 8-B12G
- A filing with the Securities and Exchange Commission (SEC) concerning the registration of securities of certain successor issuers, pursuant to section 12(g) of the Securities Exchange Act of 1934. Section 12(g) concerns the registration of a security by its issuer. This section specifically discuess exemption to the rules and the types of issuers that may be exempt from the 1934 Securities Exchange Act's requirement of registering the issuance of securities.
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SEC Form 8-K12G3
- A form that is an initial filing for the notification of securities of successor issuers deemed to register pursuant to Section 12. Section 12 of the Securities Exchange Act of 1934 concerns all of the registration requirements for securities to be listed on an exchange.
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SEC Form 8-K15D5
- A form that is an initial filing for the notification of assumption of duty to report by successor issue under Section 15(d). Section 15(d) of the Securities Exchange Act of 1934 concerns the required filing of pertinent reports such as the annual report by registrants (listed companies).
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SEC Form 8A12BEF
- This form concerns the registration of listed debt securities (bonds) pursuant to Section 12(b) of the Securities Exchange Act of 1934. SEC Form 8A12BEF is to become effective automatically upon filing.
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SEC Form 8A12BT
- A form concerned with the registration of listed debt securities (bonds) pursuant to Section 12(b) of the Securities Exchange Act of 1934. SEC Form 8A12BT is to become effective simultaneously with the effective of a concurrent Securities Act registration statement.
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SEC Form ADV
- The application for registration as an investment adviser or an amendment thereto. Part one of the SEC Form ADV provides personal information about the applicant. Part two outlines the applicant's line and scope of business, as well as the nature of the adviser's clientele and fees charged. The application is used to register with both state and federal authorities.
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SEC Form ADV-E
- A certification of client assets, both cash and securities that are held by a Registered Investment Adviser. The SEC Form ADV-E is used chiefly by accountants. It contains both information about the adviser and the state his or her practice along with a listing of client securities and holdings.
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SEC Form ADV-H
- An application for either a temporary or continuing hardship exemption previously granted by the SEC. The form contains identifying information of the adviser, and the reason for the hardship continuance request. This infomation must be provided regardless of whether the hardship is temporary or continuing.
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SEC Form ADV-NR
- A request for the appointment of agency with the SEC. This type of appointment is for a non-resident general partner or managing agent of an investment adviser. The form contains appointment of agent and consent clauses for the non-resident manager or partner of the adviser.
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SEC Form ADV-W
- The form used to withdraw registration as a Registered Investment Adviser with the SEC. This form has several schedules that must be completed listing the advisor's contact information, current business and status of clientele. A statement of financial condition, along with a description of books and records, is also required.
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SEC Form ARS
- This is the annual report to shareholders. It is the principal document used by public companies to report on the current state of its financial condition and is followed by an annual meeting of shareholders.
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SEC Form ATS
- A form that is filed with the SEC as an initial operation report or an amendment to initial operation report, or a cessation of operations report for alternative trading systems. SEC Form ATS must be filed 20 days prior to the initial operation or before a material change to an alternative trading system.
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SEC Form ATS-R
- A form that is filed with the SEC by alternative trading systems. SEC Form ATS-R details the alternative trading systems' quarterly activities and must be filed within 30 days of the end of each calendar quarter. Activity disclosed includes both the unit and dollar volume of trades in all types of securities.
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SEC Form AW
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant wishing to withdraw a previously filed amendment. This form contains information regarding the filing to be withdrawn, reason for withdrawal and who may be contacted if there are any questions about the withdrawal.
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SEC Form BD
- A form that is completed and submitted to the Securities and Exchange Commission in order to apply for registration as a securities broker-dealer, including for government securities. The form requires that the firm disclose background information, including management policies that direct the company, the names of executives and general partners, successor information and any current legal proceedings or previous securities violations.
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SEC Form BDW
- A form that must be completed by all securities broker-dealers and submitted to the Securities and Exchange Commission (SEC) in order to terminate status as a registered broker. Form BDW can be used by the broker-dealer to file either a full withdrawal or partial withdrawal. A partial withdrawal terminates a broker's registration within specific jurisdictions and self-regulatory organizations (SRO). However, a partial withdrawal does not terminate its registration with the SEC and at least one SRO and jurisdiction.
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SEC Form CA-1
- A form that is completed and submitted to the Securities and Exchange Commission (SEC) for the purpose of registering as a clearing agency. SEC Form CA-1 is also used to apply for exemption from registration as a clearing agency and to make any amendments to a firm already registered.
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SEC Form CB
- A filing with the Securities and Exchange Commission (SEC) required when engaged in specified tender offers, rights offerings or business combinations with a foreign private issuer with less than 10% of its securities held by U.S. persons.
SEC Form CB is used to report cross-border transactions and must be filed by both foreign and domestic persons engaged in the transaction.
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SEC Form D
- A filing with the Securities and Exchange Commission (SEC) required for companies that are selling securities in reliance on a Regulation D exemption or Section 4(6) exemption provisions.
Form D is a brief notice of a company's executive officers and stock promoters, in lieu of the regular reports required when no exemption under Regulation D exists.
Form D must be filed no later than 15 days after the first sale of securities.
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SEC Form DEF 14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when a shareholder vote is required. SEC Form DEF 14A is most commonly used in conjunction with an annual meeting proxy. The form should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
All other filed by non-management definitive proxy statements - typically an annual meeting proxy
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SEC Form DEF13E3
- Form DEF13E3 is an initial preliminary statement in connection with a company or an affiliate going private. It is accompanied by other proxy materials pursuant to SEC rules governing "going private" transactions. In combination, all the filings will describe the transaction in detail, including the proposed ownership and financing.
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SEC Form DEFA14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when the registrant wants to provide additional materials related to an upcoming required shareholder vote. SEC Form DEFA14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form DEFA14C
- Form DEFA14C is for filing "definitive additional information statement materials, including rule 14(a) 12 material." SEC Form DEFA14C can cover supplemental information from other filings, or correct deficiencies in information in other filings.
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SEC Form DEFM14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when a shareholder vote is required on an issue related to a merger or acquisition. SEC Form DEFM14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; acquisition or disposition of property; amendment of charter, bylaws, or other documents; and other details.
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SEC Form DEFM14C
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant intending to be part of a merger or acquisition. SEC Form DEFM14C applies to security holders who are entitled to vote on issues for which the company is not soliciting proxies. It provides security holders with information required by Schedule 14A as well as information about the interest of certain persons in or opposition to matters to be acted upon and proposals by security holders. The form is required to state that proxies were not being solicited.
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SEC Form DEFN14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of non-management not in connection with contested solicitations when a shareholder vote is required. SEC Form DEFN14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about: the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; other details.
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SEC Form DEFR14A
- A form that is required to be filed with the SEC to revise definitive information previously filed in a form DEFA14A. SEC Form DEFR14A revises the additional definitive information in connection with a proxy solicitation that is filed through the latter form.
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SEC Form DEFR14C
- A revision to form DEFA14C. This form is a definitive information statement that discloses important information but is not connected to the solicitation of proxy votes. The information contained in a DEFA14C (or DEFR14C) form can cover a multitude of items that are deemed important for shareholders.
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SEC Form DEFS14A
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be filed when definitive proxy materials were provided to shareholders with regard to a special meeting. SEC Form DEFS14A was intended to provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It included information about the date, time and place of the meeting; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form DEFS14C
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be filed by a registrant intending to hold a special meeting. SEC Form DEFS14C applies to security holders who were entitled to vote on issues for which the company was not soliciting proxies. It provided security holders with information required by Schedule 14A as well as information about whether certain persons, such as directors, officers and associates, had an interest in corporate matters that differed from the interest of general shareholders, or intended to oppose action to be taken by the corporation at a shareholders’ meeting. The form was required to state that proxies were not being solicited.
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SEC Form DFAN14A
- This is a filing with the Securities and Exchange Commission under section 14A of the code. SEC Form DFAN14A covers an "Additional Definitive Proxy Solicitation Materials Filed by Non Management." This form is applicable for non managment proxy solicitations not supported by the registrant.
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SEC Form DFRN14A
- A filing with the Securities and Exchange Commission (SEC) used by non-management to file definitive proxy soliciting materials requiring a shareholder vote. SEC Form DFRN14A should provide security holders with sufficient information about the issue at hand to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about: the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form F-1
- A filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities by foreign issuers. SEC Form F-1 is required to register securities issued by foreign issuers for which no other specialized form exists or is authorized.
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SEC Form F-10
- A filing with the Securities and Exchange Commission (SEC) that publicly-traded Canadian foreign private issuers are required to use. These issuers must have been subject to continuous disclosure by a Canadian authority over the 12 months preceding the filing, in order to register any securities (except certain derivative securities). Companies filing an SEC Form F-10 must have an aggregate market value of public float or outstanding equity of at least $75 million. This form is a wraparound form for the relevant Canadian offering documents required by securities regulation in Canada, and unlike SEC Forms F-7, F-8, F-9 and F-80, SEC Form F-10 requires the Canadian issuer to reconcile its financial statements to U.S. Generally Accepted Accounting Principles (GAAP).
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SEC Form F-3
- A filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities by foreign issuers. SEC Form F-3 is used by certain foreign private issuers that have a global market capitalization greater than $75 million and that have reported under the 1934 Act for a minimum of 1 year. It is also used by eligible foreign private issuers to register offerings of non-convertible investment-grade securities.
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SEC Form F-4
- A filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities by foreign issuers. SEC Form F-4 is used to register securities involving foreign private issuers in connection with exchange offers and business combinations.
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SEC Form F-6
- A filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities by foreign issuers. SEC Form F-6 is used to register shares represented by American depositary receipts (ADRs) issued by a depositary against the deposit of the securities of a foreign issuer.
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SEC Form F-6EF
- A filing with the Securities and Exchange Commission (SEC), also known as the Registration for Depository Shares form, required for private foreign companies who wish to have shares of their company trade as American Depository Receipts (ADRs). SEC Form F-6EF must include the issuer's foreign name, its name translated into English and the contact information for the U.S.-based depository issuing the ADRs.
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SEC Form F-7
- A filing with the Securities and Exchange Commission (SEC) that publicly-traded Canadian foreign private issuers are required to use. These issuers must have had a class of its securities listed on a Canadian exchange for the 12 months preceding the filing. Form F-7 is issued when shareholders exercise a right to purchase. The SEC requires that if an issuer is registered using SEC Form F-7, then the rights must be granted to U.S. shareholders on terms no less favorable than those extended to the foreign shareholders. This form is a wraparound form for the relevant Canadian offering documents required by securities regulation in Canada.
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SEC Form F-8
- A filing with the Securities and Exchange Commission (SEC) required to be used by large publicly traded Canadian foreign private issuers to register securities offered in business combinations, mergers and exchange offers requiring a shareholder vote. SEC Form F-8 may only be used if a takeover bid circular (or information circular for a business combination) is prepared prior, and securities offered through Form F-8, must be offered to U.S. holders on terms no less favorable than those extended to foreign shareholders. SEC Form F-8 acts as a wraparound for the relevant Canadian registration and disclosure documentation required by Canadian securities laws and regulations.
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SEC Form F-80
- A filing with the Securities and Exchange Commission (SEC) that large publicly-traded Canadian foreign private issuers are required to use. These issuers must have had a class of its securities listed on a Canadian exchange for the 12 months preceding the filing, in order to register securities offered in business combinations and exchange offers. The company filing an SEC Form F-80 must have a minimum aggregate market value of the public float of outstanding shares of C$75 million. This form is a wraparound form for the relevant Canadian offering documents required by securities regulation in Canada, and the securities must be offered to U.S. holders on terms no less favorable than those extended to other holders.
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SEC Form F-9
- A filing with the Securities and Exchange Commission (SEC) that publicly-traded Canadian foreign private issuers are required to use. These issuers must have been subject to continuous disclosure by a Canadian authority over the 12 months preceding the filing in order to register nonconvertible investment-grade debt or securities. These securities must be offered for cash or as part of an exchange offer and must be non-convertible for at least one year, unless the registrant is a majority-owned subsidiary.
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SEC Form F-N
- A filing with the Securities and Exchange Commission (SEC) required by foreign issuers to appoint an agent for making a public offering in the United States. SEC Form F-N must be filed by foreign banks, insurance companies and their subsidiaries. If the foreign issuer has already filed an SEC Form F-X, it is exempt from having to file this form under the Securities Act of 1933. Issuers are also exempt from having to file Form F-N if they are issuing debt securities or non-voting preferred shares.
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SEC Form F-X
- A filing with the Securities and Exchange Commission (SEC) that requires an issuer that is doing one of the following to appoint an agent that may be served processes, pleadings, subpoenas or other papers:
- registering securities using SEC Forms F-8, F-9, F-10 or F-80 under the Securities Act of 1933;
- registering securities using SEC Form 40-F under the Securities Act of 1933;
- filing tender offer documents on SEC Forms 13E-4F, 14D-1F or 14D-9F;
- a Canadian issuer qualifying an offering pursuant to Regulation A; or
- any foreign issuer using Form CB in connection with a tender offer, rights offering or business combination; or acting as trustee for securities registered using form F-7, F-8, F-9, F-10, F-80
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SEC Form MSD
- A form that a bank, or a specific division or department of a bank, must complete and file with the Securities and Exchange Commission (SEC) in order to apply for registration as a municipal securities dealer (MSD). SEC form MSD is also used to make any amendments to a current MSD registration.
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SEC Form N-14
- A filing with the Securities and Exchange Commission (SEC) that may be used by all management investment companies and business development companies to register certain types of transactions under the Securities Act of 1933. These transactions include those specified in the Securities Act, a merger in which a vote or consent of the security holders of the company being acquired is not required, an exchange offer for securities of the issuer or another person, a public reoffering or resale of any securities acquired in an offering registered on Form N-14, or any combination of such transactions.
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SEC Form N-14AE
- A form related to Form N-14, which, in general, is a form used to register securities issued by investment companies (mutual funds) in connection with business combinations and mergers pursuant to Rule 145 under the Securities Act of 1933. SEC Form N-14AE is an initial registration statement filed by an investment company to register securities with automatic effectiveness under Rule 488.
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SEC Form N-17D-1
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by a small business investment company (SBIC), licensed under the Small Business Investment Act of 1950, and by a bank that is affiliated with the SBIC. SEC Form N-17D-1 must be filed semiannually within 30 days after the end of the six-month period in which one of the following events required to be reported occurs: investment in a small business concern, or disposition, default, modification or extension of any investment of the SBIC.
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SEC Form N-17f-1
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by investment companies that place or maintain securities or similar investments in the custody of a company that is a member of a national securities exchange. When filing a SEC Form N-17f-1, the investment company is also required to retain an independent public accountant to verify the company's securities and similar investments by actual examination three times during each fiscal year. The accountant must prepare a certificate stating that the examination has occurred, and describing the examination, and must transmit the certificate to the SEC as well as to the appropriate state administrators.
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SEC Form N-17f-2
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by investment companies that have custody of securities or similar investments. The investment company is required to retain an independent public accountant to verify the company's securities and similar investments by actual examination three times during each fiscal year. The accountant must prepare a certificate stating that the examination has occurred and describing the examination and submit it to the SEC.
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SEC Form N-18f-1
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by a fund, that has the right to redeem in-kind securities of which it is the issuer, that wants to be allowed to make cash redemptions.
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SEC Form N-1A
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by mutual funds, except for insurance company separate accounts and small business investment companies licensed under the United States Small Business Administration. The form is designed to promote effective communication between funds and prospective investors by including information on the fund's fundamental characteristics and investment risks. The information must be presented clearly, so that the average investor, who may not have a strong legal or financial background, can understand it. It must also provide a balanced view of the fund, disclosing both its positives and negatives.
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SEC Form N-2
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by closed-end management investment companies, with the exception of small business investment companies licensed by the Small Business Administration, to register under the Investment Company Act of 1940, and to offer their shares under the Securities Act of 1933. SEC Form N-2 is meant to provide investors with information about closed-end management companies to determine whether they should invest in them.
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SEC Form N-23c-3
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by registered closed-end investment companies or business development companies that make repurchase offers pursuant to Rule 23c-3. On the SEC Form N-23c-3, the company must select whether the notification pertains to a periodic repurchase offer, a discretionary repurchase offer or both.
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SEC Form N-27D-1
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by the depositor or principal underwriter of an issuer of periodic payment plan certificates to indicate whether it has access to enough cash to meet its statutory refund obligations. SEC Form N-27D-1 reports the balance at the beginning of the period, deposits and withdrawals made, interest income earned, realized gains or losses, unrealized gains or losses, and the balance at the end of the period.
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SEC Form N-27E-1
- A filing with the Securities and Exchange Commission (SEC) that must be used by issuers of periodic payment plans to inform holders of periodic payment plan certificates who have missed certain payments within 18 months of the issuance of the certificate of their surrender rights. SEC Form N-27E-1 tells the holder that he or she has a specified amount of time to surrender the plan certificate and receive, in addition to the value of the account on the date the certificate is received, a refund of that portion of the sales charges he or she has paid in excess of 15% of the gross payments under the plan.
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SEC Form N-27F-1
- A filing with the Securities and Exchange Commission (SEC) that must be used by custodian banks for issuers of period plan payments to inform investors holding periodic payment plan certificates of the fees they will pay under the investment and their withdrawal rights. SEC Form N-27F-1 must be sent to all purchasers of plan certificates informing them of details such as the number of regular monthly payments they have made, the total amount deducted for all charges, the percentage of their investment represented by such charges, the total number of payments scheduled to be made over the full term of the plan, and the total charges scheduled to be deducted over that term.
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SEC Form N-3
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by all insurance company separate accounts organized as management investment companies offering variable annuity contracts. SEC Form N-3 is required under the Securities Act of 1933 and the Investment Company Act of 1940, and is meant to provide investors with information about variable annuity contracts so they can determine whether to invest in them.
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SEC Form N-30B-2
- A form filed with the SEC that applies to investment companies (mutual funds). SEC Form N-30B-2 informs the SEC that the company is current with the mailing of periodic and interim reports, such as quarterly reports, to shareholders of mutual funds.
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SEC Form N-30D
- An SEC form that investment companies must complete and have copies sent to their shareholders semi-annually. The report provides investors with performance information every six months, including any events or decisions that significantly affected the funds' performance.
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SEC Form N-4
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by all insurance company separate accounts organized as unit investment trusts offering variable annuity contracts. SEC Form N-4 is required under the Securities Act of 1933 and the Investment Company Act of 1940 and is meant to provide investors with information about variable annuity contracts so they can determine whether to invest in them.
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SEC Form N-54A
- A filing with the Securities and Exchange Commission (SEC) that must be used by business development companies (BDCs) who want to be subject to the provisions of sections 55 through 65 of the Investment Company Act of 1940. These sections deal with the acquisition of assets by BDCs, qualifications of directors, transactions with certain affiliates, changes in investment policy, incorporation of title provisions, functions and activities of BDCs, capital structure, loans, distribution and repurchase of securities, accounts and records, preventing compliance with title and liability of controlling persons.
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SEC Form N-54C
- A form completed by an investment company and filed with the Securities and Exchange Commission in order to withdraw its voluntary election to be regulated as a business development company as defined in Sections 55 through 65 of the Investment Company Act of 1940. The form must be accompanied by a written explanation for withdrawing such as the company's sale, merger or closure.
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SEC Form N-6
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by separate accounts that are unit investment trusts that offer variable life insurance contracts. SEC Form N-6 is designed to provide investors with information that will assist them in making a decision about investing in a variable life insurance contract.
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SEC Form N-6EI-1
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by life insurers that have established separate accounts that are exempt from submitting the notification of registration required by Section 8(a) of the Investment Company Act of 1940. SEC Form N-6EI-1 contains identifying information about the life insurance company as well as information about the separate account such as the date it was established, the specific laws under which it was organized, directors, trustees, and senior officers of the separate account, the name of the separate account's investment adviser, the name of the principal underwriter for the variable life insurance contracts, investment objectives, policies, and techniques, and more.
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SEC Form N-6F
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by a company intending to file a notification of election to be subject to sections 55 through 65 of the Act within ninety days of the date of this filing. The company would be excluded from the definition of an investment company by section 3(c)(1) of the Act, except that it presently proposes to make a public offering of its securities as a business development company. Sections 55-65 deal with acquisition of assets by business development companies, qualification of directors, transactions with certain affiliates, changes in investment policy, incorporation of title provisions, functions and activities of business development companies, capital structure, loans, distrubution and repurchase of securities, accounts and records, and preventing compliance with title.
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SEC Form N-8A
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by an investment company registering under and pursuant to section 8(a) of the Investment Company Act of 1940. SEC Form N-8A contains information on the type of investment company (face-amount certificate company, unit investment trust or management company), whether the registrant's securities are publicly available, total current value of assets, whether the registrant has applied or intends to apply for a license to operate as a small business investment company under the Small Business Investment Act of 1958, and a copy of the registrant's last regular periodic report to its securityholders, if any.
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SEC Form N-8B-2
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by unit investment trusts other than separate accounts that are currently issuing securities, including unit investment trusts that are issuers of periodic payment plan certificates and unit investment trusts of which a management investment company is the sponsor or depositor. SEC Form N-8B-2 contains information about the trust's organization, its securities, the rights of holders, fees, operation, issuance of securities, receipt of payments, purchase and sale of underlying securities, redemption of securities, distributions, reinvestment, records and accounts, and more.
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SEC Form N-8B-4
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by all face-amount certificate companies. The SEC Form N-8B-4 contains information about the registrant's organization, control, voting trusts, concentration of investments, investments in securities, purchase and sale of real estate, borrowing money, purchase and sale of commodities, portfolio turnover, loans, and face amount certificates, along with other items.
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SEC Form N-8F
- A filing with the Securities and Exchange Commission (SEC) that must be submitted by a currently registered investment company that is seeking to deregister. To use the SEC Form N-8F, the fund must have undergone a merger or liquidation, qualify for abandonment of registration, or have become a business development company.
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SEC Form N-CSR
- A form completed by registered management investment companies and filed with the Securities and Exchange Commission following the transmission of annual and semiannual reports to stockholders. The form must be filed within 10 days of sending such reports to shareholders.
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SEC Form N-PX
- A form completed by registered management investment companies and filed with the Securities and Exchange Commission in order to report its proxy voting record for each twelve-month period, ending on June 30 of each year. The report must be submitted not later than August 31. The SEC makes this information available to the public.
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SEC Form N-Q
- A form that is completed by registered investment management companies and filed with the Securities and Exchange Commission in order to disclose its complete portfolio holdings. The SEC Form N-Q must be filed within 60 days of the end of the first and third quarters of each fiscal year.
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SEC Form N-SAR
- An SEC filing that is specific to registered investment management companies, and requires that those companies disclose some financial information (sales of shares, portfolio turnover rate). The information is usually included in the company's shareholder reports.
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SEC Form NSAR-A
- A semi-annual filing with the Securities and Exchange Commission (SEC) that registered investment management companies make at the end of the first six months of their fiscal year as part of their NSAR form filing requirement. The NSAR, which is specific to registered investment management companies, requires those companies to disclose some financial information (i.e. sales of shares, portfolio turnover rate, etc.) included in the company's annual and/or semi-annual shareholder reports.
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SEC Form NSAR-AT
- A semi-annual filing with the Securities and Exchange Commission (SEC) that registered investment companies make as part of their NSAR form filing requirement. This filing is made in lieu of the standard filing at the end of their first six months of a year in which the company is in transition due to changing the date of their fiscal year-end. The NSAR, which is specific to registered investment management companies, requires those companies to disclose some financial information (i.e. sales of shares, portfolio turnover rate, etc.) included in the company's annual and/or semi-annual shareholder reports.
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SEC Form NSAR-B
- A semi-annual filing with the Securities and Exchange Commission (SEC) that registered investment management companies make at the end of their fiscal year as part of their NSAR form filing requirement. The NSAR, which is specific to registered investment management companies, requires that those companies disclose some financial information (i.e. sales of shares, portfolio turnover rate etc.) included in the company's annual and/or semi-annual shareholder reports.
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SEC Form NSAR-BT
- An annual filing with the Securities and Exchange Commission (SEC) that registered investment management companies make as part of their NSAR form filing requirement. This filing is made in lieu of the standard filing at the end of a year in which the company is in transition due to changing the date of their fiscal year-end. The NSAR form, which is specific to registered investment management companies, requires those companies to disclose some financial information (i.e. sales of shares, portfolio turnover rate, etc.) included in the company's annual and/or semi-annual shareholder reports.
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SEC Form NSAR-U
- An annual filing with the Securities and Exchange Commission (SEC) that unit investment trusts (UITs) are required to make at the end of their fiscal year. This type of filing is specific to registered investment management companies and trusts which are required to disclose some financial information (i.e. sales of shares, portfolio turnover rate, etc.) included in the company's annual and/or semi-annual shareholder reports to the SEC.
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SEC Form NT 10-K
- A filing with the Securities and Exchange Commission (SEC) that a company must submit when it is unable to file its 10-K, or similar form, on time. After submission of the SEC Form NT 10-K, the company must then file its 10-K within 15 days. The 10-K is an annual report that provides a comprehensive overview of the company's business activities. This report must be filed within 90 days of the end of the company's fiscal year.
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SEC Form NT 10-Q
- An SEC form required for companies that will not be able to submit their 10-Q filing (for quarterly financial results) by the SEC deadline or in a timely manner. SEC Form NT 10-Q requires the registrant's information and the reason why the 10-Q is delayed. It also provides for application for relief from the deadline.
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SEC Form NT 11-K
- A filing with the Securities and Exchange Commission (SEC) that a company must submit when it is unable to file its 11-K report on time. This is done by completing Form 12b25. The company must then file its 11-K within 15 days of the 12b25 submission.
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SEC Form NT-NSAR
- A filing with the Securities and Exchange Commission (SEC) that a registered investment management company must submit when it is unable to file its NSAR report on time. After submission of the SEC Form NT-NSAR, the company must then file its NSAR within 15 days.
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SEC Form NT15D2
- A form that is a variant of Form 12b-25, which is a notification of a late filing by a reporting company that determines that it is unable to complete a required periodic report when first due without unreasonable effort or expense. In this particular case, a company would have been late in filing a special financial report pursuant to Rule 15-d2 of the Securities Exchange Act of 1934.
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SEC Form PILOT
- A form that is filed with the SEC by self-regulatory organizations (SRO) as an initial operation report or an amendment to an initial operation report, or a quarterly report for pilot trading systems operated by self-regulatory organizations. An SRO is a non-governmental body with regulatory authority over an industry, such as FINRA – the Financial Industry Regulatory Authority.
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SEC Form PRE 14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when a shareholder vote is required on an issue not related to a contested matter or merger/acquisition. SEC Form PRE 14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about: the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; other details.
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SEC Form PRE 14C
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant needing to file a preliminary information statement related to a subject other than a merger, contested solicitation or special meeting. SEC Form PRE 14C provides security holders, who are entitled to vote on issues for which the company is not soliciting proxies, with information required by Schedule 14A. The form also provides information about the interest of certain persons in favor or in opposition to matters to be acted upon and proposals by security holders. The form is required to state that proxies are not solicited.
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SEC Form PRE13E3
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant as a part of proxy materials. Form PRE13E3 contains information regarding a summary of the: transaction's terms; subject company information; identity and background of the filing person; terms of the transaction; past transactions; purpose, effects, fairness and opinions of the transaction; source and amounts of funds to be used in the transaction; interest in securities of the subject company; the solicitation or recommendation; financial statements; persons/assets retained, employed, compensated or used; and additional information and exhibits.
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SEC Form PREC14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when a shareholder vote is required on a contested solicitation. This filing is designed to provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about: the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form PREC14C
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant in the event of a contested solicitation. SEC Form PREC14C provides security holders who are entitled to vote on issues for which the company is not soliciting proxies with information required by Schedule 14A, as well as information about the interest of certain persons in or opposition to matters to be acted upon, and proposals by security holders. The form is required to state that proxies are not solicited.
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SEC Form PREM14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when a shareholder vote is required on an issue related to a merger or acquisition. SEC Form PREM14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; acquisition or disposition of property; amendment of charter, bylaws, or other documents; and other details.
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SEC Form PREM14C
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant intending to be part of a merger or acquisition. SEC Form PREM14C applies to security holders who were entitled to vote on issues for which the company was not soliciting proxies. It provides security holders with information required by Schedule 14A as well as information about whether certain persons, such as directors, officers and associates, have an interest in corporate matters that differ from the interest of general shareholders, or intend to oppose action to be taken by the corporation. The form is required to state that proxies are not being solicited.
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SEC Form PRER14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when preliminary proxy materials are revised. SEC Form PRER14A should provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form PRER14C
- A filing with the Securities and Exchange Commission (SEC) that must be filed by a registrant wanting to make changes to a previously submitted preliminary information statement. SEC Form PRER14C provides security holders who are entitled to vote on issues for which the company is not soliciting proxies with information required by Schedule 14A. This filing also provides information about the interest of certain persons in favor of or in opposition to matters to be acted upon and proposals by security holders. The form is required to state that proxies are not being solicited.
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SEC Form PRES14A
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be filed when preliminary proxy materials were provided to shareholders with regard to a preliminary special meeting. SEC Form PRES14A was intended to provide security holders with sufficient information to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It included information about: the date, time and place of the meeting; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; other details.
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SEC Form PRES14C
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be filed by a registrant to notify its shareholders when a special meeting was going to be held. SEC Form PRES14C applied to security holders who were entitled to vote on issues for which the company was not soliciting proxies. It provided security holders with information required by Schedule 14A as well as information about whether certain persons, such as directors, officers and associates, had an interest in corporate matters that differed from the interest of general shareholders, or intended to oppose action to be taken by the corporation. The form was required to state that proxies were not being solicited.
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SEC Form PRRN14A
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant when non-management preliminary proxy soliciting materials are revised and a shareholder vote is required. SEC Form PRRN14A should provide security holders with sufficient information about the issue at hand to allow them to make an informed vote at an upcoming security holders' meeting or to authorize a proxy to vote on their behalf. It includes information about the date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; persons making the solicitation; direct or indirect interest of certain persons in matters to be acted upon; modification or exchange of securities; financial statements; voting procedures; and other details.
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SEC Form PX14A6G
- A filing with the Securities and Exchange Commission (SEC) that must be filed by or on behalf of a registrant that wishes to send written material to shareholders. SEC Form PX14A6G acts as a cover page for a copy of a letter sent to shareholders outlining reasons why the sending party wants them to vote a particular way - such as voting for particular members of the board of directors or voting against a proposed stock transaction.
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SEC Form S-1
- The initial registration form for new securities required by the Securities and Exchange Commission (SEC) for public companies. Any security that meets the criteria must have an S-1 filing before shares can be listed on a national exchange.
Form S-1 requires companies to provide information on the planned use of capital proceeds, detail the current business model and competition, as well provide a a brief prospectus of the planned security itself, offering price methodology, and any dilution that will occur to other listed securities. The SEC also requires the disclosure of any material business dealings between the company and its directors and outside counsel.
Form S-1 is also known as the "Registration Statement Under the Securities Exchange Act of 1933".
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SEC Form S-11
- A filing with the Securities and Exchange Commission (SEC) that is used to register securities that are issued by real estate investment trusts (REITs) or by those whose business is acquiring or holding real estate for the purpose of investment.
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SEC Form S-2
- A form from the Securities and Exchange Commission (SEC) that served as a simplified registration for the offering of new securities. Only companies that have been reporting to the SEC under the 1934 Act for at least three years without interruption are eligible to use the SEC Form S-2, which allows for the inclusion of previously submitted information regarding their business and financial statements.
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SEC Form S-3
- A simplified security registration form from the SEC, open to use by companies that have met prior reporting requirements. The Form S-3 registers securities under the Securities Act of 1933 for companies that are based in the United States only.
Companies seeking to use the S-3 must have met all reporting requirements listed under sections 12 or 15(d) of the Securities Exchange Act of 1934, which assumes that the company seeking registration already has some form of security filed with the SEC.
The filing of a Form S-3 may occur in advance of an initial public offering (IPO) of common stock.
Form S-3 is also known as the "Registration Statement Under the Securities Exchange Act of 1933".
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SEC Form S-3D
- A filing that publicly-traded companies must submit to the SEC's EDGAR system when they purchase securities on behalf of shareholders as a result of a dividend or interest reinvestment plan. A Company will often propose a dividend or interest reinvestment plan as a convenient and economical way for shareholders to purchase additional shares of its common stock by using the interest and/or dividends they have earned on their existing shares of common stock.
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SEC Form S-4
- A filing with the Securities and Exchange Commission (SEC) by a publically traded company that is used to register any material information related to a merger or acquisition. In addition, the form is also submitted by companies undergoing an exchange offer.
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SEC Form S-4EF
- An SEC filing that is required when forming a savings bank, savings and loan or similar financial institution that issues securities as a result of the investment of its customers' deposits. Savings banks and similar financial institutions are required to file Form S-4EF under SEC General Instruction G and Sections 13(a) and 15(d) of the Securities Exchange Act of 1934.
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SEC Form S-6
- A filing with the Securities and Exchange Commission (SEC), which unit investment trusts use to register securities they issue.
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SEC Form S-8
- A filing with the Securities and Exchange Commission (SEC) that is used by a publically traded company to register securities that will be offered to its employees via benefit or incentive plans.
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SEC Form SB-1
- A filing with the Securities and Exchange Commission (SEC) that is required to be used by issuers with revenues (and public market float) of less than $25 million. SEC Form SB-1 registers offerings of up to $10 million of securities, as long as the company has not registered more than $10 million in offerings during the previous 12 months and current outstanding securities do not total more than $25 million. This form is a simplified version, which requires less detailed information (such as less detailed financial statements, and omission of summary data) about the issuer's business than SEC Form S-1.
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SEC Form SP15D2
- A form that concerns the filing of a special financial report with the SEC, pursuant to Rule 15d-2 of the Securities Exchange Act of 1934. SEC Form SP15D2 comes into play if a company's registration statement did not contain certified financial statements for the registrant's last full fiscal year or for the life of the registrant if less than a full fiscal year.
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SEC Form T-1
- A statement of eligibility for an individual trustee that must be filed with the Securities and Exchange Commission (SEC). The SEC Form T-1 contains basic personal information about the proposed trustee, as well as any affiliations thereof.
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SEC Form T-2
- A statement of eligibility for an individual trustee that must be filed with the Securities and Exchange Commission (SEC). The SEC Form T-2 contains basic personal information about the proposed trustee, as well as any affiliations thereof.
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SEC Form T-3
- An application for the qualification of an indenture that must be filed with the Securities and Exchange Commission (SEC). The SEC Form T-3 must provide the form of business of the applicant, as well as its state of residence. The second part of the application states why the applicant should not have to register the indenture.
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SEC Form T-4
- An application for exemption from certain sections of the Trust Indenture Act that must be filed with the SEC. The application contains a list of the securities that are being exempted, as well as the specific sections of the act that the securities are to be exempt from. Further information pertaining to the trustee and the characteristics of the proposed exempt securities is required, as well.
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SEC Form T-6
- This form must be filed with the SEC to determine whether a foreign person is eligible to act as an institutional trustee. This SEC Form T-6 requires the name and address of the proposed trustee, the company's jurisdiction and address and the name and contact information of the agent for service. Information pertaining to the name and examination of any authorities to which the trustee is subject must also be furnished, as well as any affiliate data.
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SEC Form TA-1
- A form used to apply for or amend registration as a transfer agent. Depending on the type of organization applying, SEC form TA-1 is submitted to one of four regulatory agencies: Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) or the Securities and Exchange Commission (SEC).
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SEC Form TA-2
- A form completed by transfer agents when submitting its annual report of transfer activities. Information collected on Form TA-2 is used by regulatory bodies for the oversight of transfer agents. Depending on the type of organization, SEC Form TA-2 is submitted to one of four regulatory agencies: Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) or the Securities and Exchange Commission (SEC).
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SEC Form U-1
- A declaration of intent to sell securities or purchase or sell other assets to the SEC.
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SEC Form U-12-1B
- A statement that must be filed annually with the SEC regarding the actions of employees of registered holding companies.
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SEC Form U-12-IA
- A filing with the Securities and Exchange Commission (SEC) that was was required under the Public Utility Holding Company Act of 1935. The form had to contain information on the registered holding company systems involved, information about the activities of the person filing the statement, direct or indirect compensation that person received for such activities, names of any persons with whom the compensation was being divided, and any expenses incurred during the performance of the stated activities. The SEC used this information to monitor the holdings, financings and operations of the registered public utility system.
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SEC Form U-13-1
- An application that doubles as both a request for approval by the Securities and Exchange Commission (SEC) for any mutual service company, or a declaration of organization and business conduct of a subsidiary service company. The SEC Form U-13-1 requires the company's name, address, contact information and form of organization as well as a listing of any non-utility related business activities. A description of the company's capitalization and security holdings is also required.
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SEC Form U-13-60
- A report that must be filed annually with the SEC by mutual and subsidiary service companies. The SEC Form U-13-60 must contain a complete list of all schedules plus an analysis of all accounts. A complete description of the company's balance sheet and cash flow is also required.
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SEC Form U-13E-1
- A report that must be filed with the Securities and Exchange Commission (SEC) by any affiliate service company or other company that provides services as its primary activity. The report must contain the name, address, form of organization and name of contact individual with the SEC. It must also provide the names and addresses as well as the compensation of all officers and directors of the company.
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SEC Form U-33-S
- An annual report that foreign utility companies must file with the SEC. The SEC Form U-33-S contains the identity, location and business address of the company and a basic description of its facilities. Any debts and financial obligations must be reported as well.
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SEC Form U-3A-2
- A statement that must be filed with the SEC by any holding company that wishes to claim exemption from the Public Utilities Company Holding Act of 1935. The SEC Form U-3A-2 contains the organization's name, state of organization, current location and nature of business. A basic description of all of the properties and equipment, as well as the distribution of energy, is also required.
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SEC Form U-3A3-1
- A one-year statement that banks claiming exemption must file with the SEC.
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SEC Form U-57
- A notification to the Securities and Exchange Commission of status as a foreign utility company. The SEC Form U-57 contains the name and address of the company and a basic description of the facilities, as well as the names and interests of any party that holds more than 5% of any class of voting securities in the company. The name of any domestic company associated with the foreign entity must be listed as well.
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SEC Form U-5S
- A filing with the Securities and Exchange Commission (SEC) that had to be filed annually by every registered holding company. The form had to contain information on the parent holding company and all statutory subsidiaries, number of common shares owned, percentage of voting power and book value of shares, as well as summaries of acquisitions, sales, officers and directors, contributions, contracts, and financial statements. The SEC used this information to monitor the holdings, financings and operations of the registered public utility system.
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SEC Form U-6B-2
- A certificate of notification that must be filed by all public utility holding companies that are issuing or guaranteeing securities. The SEC Form U-6B-2 describes any securities that are issued that are exempt from rule 6(a) of the Public Utility Holding Company Act of 1935. All pertinent information regarding the securities must be supplied, including the number, price, date of issuance and maturity, and rate of interest.
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SEC Form U-7D
- A certificate that summarizes the leasing arrangements of any kind of utility facility by a prospective utility holding company. The SEC Form U-7D contains a breakdown of the cost of the facility, as well as financing terms and a description of the facility itself. The term of the lease must also be included, and estimations or substitutions can be made if definitive information is not yet available.
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SEC Form U-9C-3
- A filing with the Securities and Exchange Commission (SEC) that had to be filed quarterly after a registered holding company acquired shares of an energy-related company. SEC Form U-9C-3 had to contain a list of all gas or energy-related companies held, and the percentage of voting shares held in each, plus summaries of securities details, transactions, aggregate investments and financial statements. The SEC used this information to monitor all energy- and gas-related business activities of registered holding companies.
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SEC Form U-R-1
- An informational form that collects personal and business-related data on solicitors. The SEC Form U-R-1 allows the SEC to determine whether the applicants are in compliance with the provisions of SEC Rule 62. The form takes at least five hours to complete and is required of all utility holding company solicitors.
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SEC Form U5A
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that had to be filed by all public utility holding companies who were required to register under the Public Utility Holding Company Act (PUHCA) of 1935. SEC Form U5A contained the names of all companies held by the registrant and the organizational structure (corporation, LLC, etc.), state of organization and type of business for each company held. The SEC used this information to monitor the holdings, financing and operations of the registered public utility system.
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SEC Form U5B
- A now-obsolete filing with the Securities and Exchange Commission (SEC) that was required to be filed by public utility holding companies. The form contained information on the general character of the business done by the registrant and its subsidiaries, which included: interstate transactions, securities outstanding, funded debt, capital stock, contingent liabilities, investments in system securities, investments in other companies, indebtedness of system companies and more. The SEC used this information to monitor the holdings, financings and operations of the registered public utility system.
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SEC Form X-15AJ-1
- A form that is filed with the SEC as an amendatory and/or supplementary statement to Form X-15AA-1. SEC Form X-15AJ-1 amends Form X-15AA-1, which is an application to the SEC for registration as a national securities association or affiliated securities association by an association of brokers and dealers under Section 15A of the Securities Exchange Act of 1934.
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SEC Form X-15AJ-2
- This form is the "annual consolidated supplement", a form that is filed annually with the SEC by national securities associations and affiliated securities associations. SEC Form X-15AJ-2, the consolidated supplement, must be accompanied by three additional exhibits for SEC review.
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SEC Form X-17A-5
- A financial and operational report form that must be completed by all dealer-brokers registered with the Securities and Exchange Commission (SEC). SEC form X17A-5 consists of three parts, including an annual audit that must be performed by a certified public accountant (CPA).
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SEC MEF Filings
- SEC filings that concern registration of up to an additional 20% of securities for an offering, pursuant to the 1933 Securities Act Rule 462(b). SEC MEF Filings may apply to 1933 Act registration forms S-1, S-2, S-3, S-11, SB-1, SB-2, F-1, F-2 and F-3.
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SEC POS AM Filing
- A filing that is made by companies which have filed for registration with the SEC. SEC Filing POS AM is a filing which has post-effective amendments to provide updated prospectus information.
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SEC Release IA-1092
- A release from the Securities & Exchange Commission (SEC) that provides uniform interpretations of how state and federal advisor laws would apply to people providing financial services.
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SEC RW Filing
- This filing is made by companies which have already filed to register their securities with the SEC under the 1934 Securities Act. This filing is a request to formally withdraw the pending securities registration.
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SEC Schedule 13D
- A report that must be submitted to the Securities and Exchange Commission (SEC) by any person or group who is considered to be a beneficial owner of a company's stock. Beneficial ownership occurs when a person or group acquires more than 5% of a voting class of a company's stock and obtains the power to vote or sell the security. SEC Schedule 13D must be filed with the SEC within 10 days of the purchase which is then forwarded to the issuing company and the exchange where the security is traded.
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SEC Schedule 13E-3
- A schedule that must be filed with the Securities and Exchange Commission (SEC) by a publicly-traded company or an affiliate when that company becomes "private," meaning that the number of shareholders decreases to the point that the company is no longer required to file reports with the SEC and/or is de-listed from a securities exchange. Qualifying events may include a merger, tender offer, a sale of assets or a reverse stock split.
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SEC Yield
- A standard yield calculation developed by the Securities and Exchange Commission (SEC) that allows for fairer comparisons of bond funds. It is based on the most recent 30-day period covered by the fund's filings with the SEC. The yield figure reflects the dividends and interest earned during the period, after the deduction of the fund's expenses. This is also referred to as the "standardized yield."
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Second Chance Loan
- A type of loan associated with subprime lending and borrowers with a tainted credit history. Second chance loans offer a borrower a chance to rebuild their credit history. Although subprime loans might have a typical term-to-maturity (30 years of a mortgage), they are usually intended to be short-term financing vehicles that allow the borrower to repair their credit history to the point where they can refinance into more favorable loan terms. Borrowers must compensate the lender for taking on more risk in lending to them by paying a higher interest rate, thus the incentive for the borrower to refinance as soon as they are able.
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Second Lien Debt
- Debts that are subordinate to the rights of other, more senior debts issued against the same collateral, or a portion of the same collateral. If a borrower defaults, second lien debts stand behind higher lien debts in terms of rights to collect proceeds from the debt's underlying collateral.
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Second Mortgage
- A type of subordinate mortgage made while an original mortgage is still in effect. In the event of default, the original mortgage would receive all proceeds from the liquidation of the property until it is all paid off. Since the second mortgage would receive repayments only when the first mortgage has been paid off, the interest rate charged for the second mortgage tends to be higher and the amount borrowed will be lower than for the first mortgage.
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Second-To-Die Insurance
- A type of life insurance on two people (usually married) that provides benefits to the heirs only after the last surviving spouse dies. This differs from regular life insurance in that the surviving partner doesn't receive any benefits after their spouse dies. Thus, second-to-die insurance is used for estate planning.
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Secondary Beneficiary
- A person or entity that inherits assets under a will, trust or insurance policy if the primary beneficiary dies before the grantor. A secondary beneficiary would also be considered a "contingent beneficiary".
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Secondary Liquidity
- A form of liquidity that is part of an initial public offering when shares are distributed to both retail and institutional players. These secondary parties may then sell the security to other interested buyers, with an exchange typically acting as an intermediary.
Secondary holders, or liquidity providers, often hold fewer shares and provide less liquidity and/or share volume than the initial underwriter.
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Secondary Market
- A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets.
Secondary markets exist for other securities as well, such as when funds, investment banks, or entities such as Fannie Mae purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go to an investor rather than to the underlying company/entity directly.
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Secondary Mortgage Market
- The market where mortgage loans and servicing rights are bought and sold between mortgage originators, mortgage aggregators (securitizers) and investors. The secondary mortgage market is extremely large and liquid.
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Secondary Offering
- 1. The issuance of new stock for public sale from a company that has already made its initial public offering (IPO). Usually, these kinds of public offerings are made by companies wishing to refinance, or raise capital for growth. Money raised from these kinds of secondary offerings goes to the company, through the investment bank that underwrites the offering. Investment banks are issued an allotment, and possibly an overallotment which they may choose to exercise if there is a strong possibility of making money on the spread between the allotment price and the selling price of the securities.
2. A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The proceeds of this sale are paid to the stockholders that sell their shares. Often, the company that issued the shares holds a large percentage of the stocks it issues.
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Secondary Stock
- A stock that is considered riskier than blue chips because it has a smaller market capitalization.
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Section 1031
- A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.
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Section 1035 Exchange
- A tax-free exchange of an existing annuity contract for a new one.
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Section 1041
- A section of the Internal Revenue Code that mandates that any transfer of property from one spouse to another is income tax-free. No deductible loss or taxable gain can be declared. This section applies to transfers during marriage as well as in the divorce process. Section 1041 was enacted in order to simplify the consolidation of marital assets.
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Section 1231 Property
- A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, machinery, land, timber and other natural resources, unharvested crops, cattle, livestock and leaseholds that are at least a year old.
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Section 1237 Capital Gain Opportunity
- This is a specific tax credit that allows taxpayers to receive capital gains treatment on the sale of subdivided lots of land. The purpose of the Section 1237 capital gain opportunity is to allow individual taxpayers who are not real estate dealers to escape ordinary tax treatment on the sale of a sublot of land.
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Section 1245
- A part of the IRS code stating that depreciable property that has been sold at a price in excess of depreciated or salvage value may qualify for favorable capital-gains tax treatment.
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Section 1250
- A section of the IRS code stating that a gain from selling real estate that has been subjected to accelerated depreciation should be treated as ordinary income instead of a capital gain.
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Section 1341 Credit
- A tax credit available for taxpayers who are repaid in a later year more than $3,000 in wages from a prior year. Section 1341 allows taxpayers to claim a credit for taxes paid on wages not received from the previous year. The Section 1341 credit thus allows taxpayers to avoid filing an amended return for the previous tax year.
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Section 16
- A section of the Securities Exchange Act of 1934 that is used to describe the various regulatory filing responsibilities that must be met by directors, officers and principal stockholders. According to Section 16, every person who is directly or indirectly the beneficial owner of more than 10% of the company, or who is a director or an officer of the issuer of such a security, shall file the statements required by this subsection with the Securities and Exchange Commission (SEC).
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Section 179
- An immediate expense deduction that business owners can take for purchases of depreciable business equipment instead of capitalizing and depreciating the asset. The Section 179 expensing method is offered as an incentive for small business owners to grow their businesses with the purchase of new equipment.
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Section 988
- A financial transaction involving a capital loss or gain on an investment held in a foreign currency. A Section 988 transaction relates to IRS Section 988, which was applied to all tax years after December 31, 1986. Per IRS rules, most gains from foreign currency transactions are to be treated as ordinary income, whether earned by an individual or a corporation. Gains and losses from these transactions are typically viewed outside of any gain or loss due to exchange rate changes between the U.S. dollar and the foreign currency. 988 Transactions include those surrounding holders of foreign bonds (who will receive interest and principle in a domestically "nonfunctional" currency), foreign currency futures or other derivatives, as well as accrued expenses or receipts in a foreign currency.
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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.
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Sector Analysis
- A review and assessment of the current condition and future prospects of a given sector of the economy. Sector analysis serves to provide an investor with an idea of how well a given group of companies are expected to perform as a whole.
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Sector Breakdown
- The mix of sectors within a fund or portfolio, typically expressed as a percentage of the equities asset class. Sector designations vary slightly depending on the criteria used, but the most common equity sectors include:
-Industrials/Basic Materials
-Consumer Durables/Staples
-Consumer Cyclicals
-Technology
-Healthcare
-Financials
-Energy
-Utilities
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Sector ETF
- A class of exchange-traded fund that invests in the stocks and securities of a specific sector, typically identified in the fund title. Most sector ETFs focus on U.S.-based stocks, but several will invest globally in an attempt to capture the worldwide performance of the given sector. Assets will be passively managed around an underlying index; several use indexes provided from data services like S&P and Dow Jones. Leveraged sector ETFs are also available, which aim to achieve double the return of the underling index, both on advancing and declining trading days.
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Sector Fund
- A stock mutual, exchange-traded or closed-end fund that invests solely in businesses that operate in a particular industry or sector of the economy. Because the holdings of this type of fund are in the same industry, there is an inherent lack of diversification associated with these funds.
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Sector Rotation
- The action of a mutual fund or portfolio manager shifting investment assets from one sector of the economy to another.
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Secular
- An adjective used to describe a long-term time frame, usually at least 10 years.
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Secular Market
- A market driven by forces that could be in place for many years, causing the price of a particular investment or asset class to rise or fall over a long period of time. In a secular bull market, strong investor sentiment drives prices higher, as there are more net buyers than sellers. In a secular bear market, weak sentiment causes selling pressure over an extended period of time.
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Secure Option ARM
- A type of payment-option adjustible-rate mortgage with a fixed-interest-rate period. The mechanics of a secure option arm are very similar to a payment option arm except that it has a fixed interest rate period similar to fixed period or hybrid ARM. In other words, secure option ARMs have the same monthly payment options as a payment option ARM, including a minimum payment option that is based on a temporary start interest rate that lasts for first one to three months. However, after the expiration of the temporary start interest rate, the secure option ARM has a fixed-interest-rate period similar to a fixed-period or hybrid ARM.
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Secured Bond
- A type of bond that is secured by the issuer's pledge of a specific asset, which is a form of collateral on the loan. In the event of a default, the bond issuer passes title of the asset or the money that has been set aside onto the bondholders. Secured bonds can also be secured with a revenue stream that comes from the project that the bond issue was used to finance.
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Secured Card
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Secured Creditor
- Any creditor or lender that takes collateral for the extension of credit, loan or bond issuance. In the arena of personal finance, the most well-known secured creditors are mortgage lenders whose loans are secured either by a first or second lien on a property.
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Secured Debt
- Debt backed or secured by collateral to reduce the risk associated with lending. An example would be a mortgage, your house is considered collateral towards the debt. If you default on repayment, the bank seizes your house, sells it and uses the proceeds to pay back the debt.
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Secured Note
- A bilateral lending agreement, the note represents a contractual obligation to lend and borrow money at a specified interest rate.
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Securities Act Of 1933
- A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets.
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Securities And Exchange Board Of India - SEBI
- The regulatory body for the investment market in India. The purpose of this board is to maintain stable and efficient markets by creating and enforcing regulations in the marketplace.
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Securities And Exchange Commission - SEC
- 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.
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Securities Exchange Act Of 1934
- The Securities Exchange Act of 1934 was created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect the investing public.
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Securities Fraud
- A type of serious white-collar crime in which a person or company, such as a stockbroker, brokerage firm, corporation or investment bank, misrepresents information that investors use to make decisions. Securities Fraud can also be committed by independent individuals (such as by engaging in insider trading). The types of misrepresentation involved in this crime include providing false information, withholding key information, offering bad advice, and offering or acting on inside information.
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Securities Industry And Financial Markets Association - SIFMA
- An association that represents firms of all sizes in all financial markets in the U.S. and worldwide. SIFMA is committed to enhancing the public's trust and confidence in the markets, delivering an efficient, enhanced member network of access and forward-looking services, as well as premiere educational resources for industry professionals and the investors they serve.
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Securities Industry Regulatory Authority - SIRA
- The former name of a regulatory body consisting of the National Association of Securities Dealers and the New York Stock Exchange Regulation. The Securities Industry Regulatory Authority was formed to govern business practices between securities brokers and the investing public. SIRA aims to reduce the cost inefficiencies of these two regulators operating separately.
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Securities Investor Protection Corporation - SIPC
- A nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy. Members to the SIPC include all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members.
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Securities Lending
- When a brokerage lends securities owned by its clients to short sellers.
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Securities Transfer Association Medallion Program - STAMP
- A verification system used by many different institutions to authorize and guarantee the individual signatures applied to securities requiring transfers.
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Securitization
- The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidity in the marketplace.
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Securitize
- A pooled group of financial assets that together create a new security, which is then marketed and sold to investors. The value and cash flows of the new security are based off of the underlying value and cash flows of the assets used in the securitization process. Companies will securitize illiquid assets into liquid assets in order to increase their overall liquidity and generate immediate proceeds from their assets.
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Security
- An instrument representing ownership (stocks), a debt agreement (bonds) or the rights to ownership (derivatives).
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Security Analyst
- A financial professional who studies various industries and companies, providing research and valuation reports, and making buy, sell, and hold recommendations.
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Security Deposit
- A monetary deposit given to a lender, seller or landlord as proof of intent. Security deposits can be either refundable or nonrefundable, depending on the terms of the transaction. As the name implies, the deposit is intended as a measure of security for the recipient.
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Security Market Line - SML
- A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities.
Also refered to as the "characteristic line".
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Seed Capital
- The initial capital used to start a business. Seed capital often comes from the company founders' personal assets or from friends and family. The amount of money is usually relatively small because the business is still in the idea or conceptual stage. Such a venture is generally at a pre-revenue stage and seed capital is needed for research & development, to cover initial operating expenses until a product or service can start generating revenue, and to attract the attention of venture capitalists.
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Segment
- A component of a business that is or will generate revenues and costs related to operations. Financial information should be available for a segment's activities and performance and must also be periodically reviewed by the company's management before a decision can be made regarding the amount of capital that will be given to the segment for a particular operating period.
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Segregated Fund
- A type of pool investment that is similar to a mutual fund, but is considered an insurance product. Proceeds received by the insurance company are used to purchase underlying assets, and then shares of the segregated funds are sold to investors.
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Seigniorage
- The difference between the value of money and the cost to produce it - in other words, the economic cost of producing a currency within a given economy or country. If the seigniorage is positive, then the government will make an economic profit; a negative seigniorage will result in an economic loss.
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SEK
- In currencies, this is the abbreviation for the Swedish Krona.
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SEK (Swedish Krona)
- The currency abbreviation for the Swedish krona (SEK), the currency for Sweden. The Swedish krona is made up of 100 öre and is often presented with the symbol kr. The krona, which means "crown" in English, is also known in Sweden as the "spänn" or "kosing".
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Select Mortality Table
- A mortality table which outlines life contingency statistics for a certain period of time. A select mortality table includes mortality data on individuals who have recently purchased life insurance. These individuals tend to have lower mortality rates than individuals who are already insured, due chiefly to the fact that they have most likely just passed certain medical exams required to obtain insurance.
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SelectNet
- An automated trading system that facilitates electronic trading between brokers/dealers who are participants of the system by allowing market makers to send orders directly back and forth to one another. It operates with the exchange logic that when a member receives an order offer, the member can either accept, reject or counteroffer the original offer.
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Self-Amortizing Loan
- A loan for which the periodic payments consist of both principal and interest such that the loan will be paid off by the end of a scheduled term. Assuming the loan is a fixed-rate loan, the amount of each payment and the breakdown of the principal and the interest that comprise each payment can be known in advance. If the loan is an adjustable-rate mortgage, it can still be self-amortizing, but because the interest rate is subject to change, the amount and breakdown of each payment cannot be known in advance.
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Self-Build Insurance
- An insurance policy that provides coverage during the construction of a new home, additional structure, renovation or conversion. Self-build insurance provides financial compensation for setbacks and problems that may occur during the project, such as contractor disputes, accident, injury, death, theft, arson, vandalism and project delays. If the project is being financed with a loan, the lender may require the borrower to purchase self-build insurance.
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Self-Directed RRSP
- A type of RRSP (Registered Retirement Savings Plan) whose owner determines the asset mix held in the trust. An RRSP is a Canadian retirement savings vehicle to which contributions are tax deductible on an annual basis, up to a certain amount. With a self-directed RRSP, an investor can determine the portfolio of investment products in his or her RRSP. Investments that are not RRSP eligible, however, are sill not allowed in a self-directed RRSP.
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Self-Employed
- A situation in which an individual works for himself or herself instead of working for an employer that pays a salary or a wage. A self-employed individual earns their income through conducting profitable operations from a trade or business that they operate directly.
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Self-Employed Person
- An independent contractor or sole proprietor who reports income earned from self-employment. Self-employed persons control who they work for, how the work is done and when it is done.
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Self-Employment Tax
- A tax imposed on self-employed people, who must pay this tax in order to receive social-security benefits upon retirement.
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Self-Regulatory Organization - SRO
- A non-governmental organization that has the power to create and enforce industry regulations and standards. The priority is to protect investors through the establishment of rules that promote ethics and equality.
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Sell
- 1. A recommendation to sell a particular security.
2. The process of liquidating an asset in exchange for money.
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Sell Plus
- An order to sell a stock at a price above the current market price.
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Sell Side
- The retail brokers and research departments that sell securities and make recommendations for brokerage firms' customers.
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Sell To Close
- A phrase used by many brokerages on the street to represent the closing of a long position in option transactions.
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Sell To Open
- A phrase used by many brokerages on the street to represent the opening of a short position in option transactions.
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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.
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Sell-Out
- When a broker or investor buying stocks has failed to settle the trade in a timely manner and, as a result, the broker can forcibly sell the securities on the investor's behalf.
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Seller
- 1. An individual or entity that exchanges any type of good or service in return for payment.
2. In the option market, the seller is the investor who collects a premium from the buyer in return for taking on the risk associated with holding a short position in an option. The seller of an option is also known as a "writer".
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Seller's Call
- An agreement between a buyer and a seller for a specific grade and quantity of commodity that allows a period of time for the seller to set the price a fixed number of points above (or below) a specified delivery month's futures price.
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Seller's Market
- A market condition characterized by a shortage of goods available for sale.
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Seller's Option
- The right of a forward contract seller to choose some of the specifications of a commodity to be delivered. The choices about the delivered commodity's quality and delivery specifications must fit among the limits imposed by the terms of the contract.
Seller's option can also refer to a put option.
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Seller-Financed Sale
- A transaction where the seller also acts as the lender to the buyer. Seller-financed sales thereby eliminate third-party lenders from the transaction. This type of sale can be used to finance the purchase of a home, business or any other type of property.
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Seller-Paid Points
- Any points paid by the seller of a home for the buyer. Seller-paid points are always deducted by the purchaser of the home. These points are offered as a purchase incentive for the prospective buyer and can provide the buyer with a lower rate as a result.
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Selling Away
- When a broker solicits you to purchase securities not held or offered by the brokerage firm. As a general rule, such activities are a violation of securities regulations.
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Selling Group
- All financial institutions involved in selling or marketing a new issue of debt or equity but not necessarily participating in the underwriting consortium.
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Selling Hedge
- A hedging strategy with which the sale of futures contracts are meant to offset a long underlying commodity position.
Also known as a "short hedge."
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Selling Into Strength
- A proactive trading strategy carried out by selling out of a long or into a short position when the price of the asset being traded is still rising but is expected to reverse in price. Opposite of "buying into weakness".
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Selling Out Of Trust
- A term commonly used in the automobile industry to refer to the selling of a car that has been paid for with a loan and then not using the sale proceeds to pay back the lender. This practice may be engaged in by car dealerships or individuals facing financial difficulty. Normally, if an individual can't make his car payments, the bank takes back the car. When the owner sells the car out of trust and doesn't repay the loan, the bank can't seize the loan collateral (the car).
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Selling, General & Administrative Expense - SG&A
- Reported on the income statement, it is the sum of all direct and indirect selling expenses and all general and administrative expenses of a company.
Direct selling expenses are expenses that can be directly linked to the sale of a specific unit such as credit, warranty and advertising expenses. Indirect selling expenses are expenses which cannot be directly linked to the sale of a specific unit, but which are proportionally allocated to all units sold during a certain period, such as telephone, interest and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, heat and lights.
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Selloff
- 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.
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Semi-Annual Bond Basis - SABB
- A conversion metric to compare rates on bonds with varying characteristics. Since bonds come with all types of coupon rates and payment frequencies, it's important to be able to find some common measure to compare different types of bonds side-by-side. By using a semi-annual bond basis (SABB), the interest rate of a bond that pays other than semi-annually is converted into its semi-annual equivalent.
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Semi-Strong Form Efficiency
- A class of EMH (Efficient Market Hypothesis) that implies all public information is calculated into a stock's current share price. Meaning that neither fundamental nor technical analysis can be used to achieve superior gains.
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Semi-Variable Cost
- A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded. Also known as a "semi-fixed cost."
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Semiannual
- An event that occurs twice in a calendar year.
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Semiconductor
- A materials product - usually comprised of silicon - which conducts electricity more than an insulator but less than a pure conductor, such as copper and aluminum. Semiconductors are usually very small and complex devices, and can be found in thousands of products such as computers, cell phones, appliances, and medical equipment.
Also known as "chips" or "semis".
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Semideviation
- A measure of dispersion for the values of a data set falling below the observed mean or target value. Semideviation is the square root of semivariance, which is found by averaging the deviations of observed values that have a result that is less than the mean. The formula for semideviation is as follows:
Where:
n = the total number of observations below the mean
rt = the observed value
average = the mean or target value of a data set
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Semivariance
- A measure of the dispersion of all observations that fall below the mean or target value of a data set. Semivariance is an average of the squared deviations of values that are less than the mean. The formula for semivariance is as follows:
Where:
n = the total number of observations below the mean
rt = the observed value
average = the mean or target value of the data set
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Senior Bank Loan
- A debt financing obligation issued by a bank or similar financial institution to a company or individual that holds legal claim to the borrower's assets above all other debt obligations. The loan is considered senior to all other claims against the borrower, which means that in the event of a bankruptcy the senior bank loan is the first to be repaid, before all other interested parties receive repayment.
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Senior Convertible Note
- A debt security that contains an option where the note will be converted into a predefined amount of the issuer's shares. A senior convertible note has priority over all other debt securities issued by the same organization.
Since the bondholder receives two benefits not found on a normal bond issue (a call option and first priority for recourse in the event that the issuer goes bankrupt), the amount of interest offered to the bondholder will tend to be lower than on any other bond offered by the same issuer.
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Senior Debt
- A bond or other form of debt that takes priority over other debt securities sold by the issuer.
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Senior Issue
- An issue of bonds, preferred stock or other securities that represents the first priority lien on the issuer's assets or earnings. Senior issues have a higher priority claim on a firm's dividends, interest payments, or in case of a bankruptcy, the value salvaged from a liquidation.
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Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP)
- A quarterly survey completed by 75 banks consisting of 53 domestic and 23 foreign branches operating in the United States. The Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP) gathers information on how officials feel about policy changes made, possible future policy changes and changes in supply/demand for certain products. The survey is completed in time to be discussed at the quarterly Federal Open Market Committee (FOMC) meetings.
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Senior Security
- A security (usually debt) that, in the event the issuer goes bankrupt, must be repaid before other creditors receive any payment.
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Senkou Span A
- A component of the Ichimoku Kinko Hyo indicator that is used to measure momentum and future areas of support and resistance. Senkou span A is always plotted alongside Senkou span B and the area between the two lines is filled with shaded indicator lines, also known as the cloud, which is used by traders to predict levels of future support/resistance. Senkou span A is calculated by using the following formula:
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Senkou Span B
- A component of the Ichimoku Kinko Hyo indicator that is used to create the 'cloud' of the indicator. Senkou span B is always plotted alongside Senkou span A and the area between the two lines is shaded. The shaded area, known as the cloud, is then used to give traders an idea of future support and resistance. Senkou span B is calculated by using the following formula:
Senkou span B is generally regarded as the slowest moving component of the Ichimoku indicator because it is created by using the greatest number of time periods in its calculation (generally 52 time periods).
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Sensex
- An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India.
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Sensitivity
- The magnitude of a financial instrument's reaction to changes in underlying factors. Financial instruments, such as stocks and bonds, are constantly impacted by many factors. Sensitivity accounts for all factors that impact a given instrument in a negative or positive way in an attempt to learn how much a certain factor will impact the value of a particular instrument.
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Sensitivity Analysis
- A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions. This technique is used within specific boundaries that will depend on one or more input variables, such as the effect that changes in interest rates will have on a bond's price.
Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different compared to the key prediction(s).
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Sentiment Indicator
- A general term used to describe indicators that gauge investor attitudes toward the market.
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Separate Account
- 1. A privately managed investment account opened through a brokerage or financial advisor that uses pooled money to buy individual assets.
2. In the context of variable annuities, these are payments made to an insurance company for the purpose of investing in securities. These securities are kept separate from the insurer's general investments.
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Separate Return
- A separate Form 1040, or a variant thereof, filed by a married taxpayer who is not filing jointly. A separate return is usually filed either by a married couple who are divorcing or by a married couple where one spouse has much higher income and deductions than the other.
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Sequence Risk
- The risk of receiving lower or negative returns early in a period when withdrawals are made from the underlying investments. The order or the sequence of investment returns is a primary concern for those individuals who are retired and living off the income and capital of their investments.
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Sequential Pay CMO
- A type of collateralized mortgage obligation (CMO) in which there are several tranches. Each tranche's holder receives interest payments as long as the tranche's principal amount has not been completely paid off. The senior tranche receives all initial principal payments until it is completely paid off, after which the next most senior tranche receives all the principle payments, and so on.
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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.
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Serial Bond With Balloon
- A combination of a serial bond issue and a term bond issue. Essentially, the serial bond with balloon has bonds that mature at different intervals throughout the issue's life, and then a large percentage of the bonds (the term bonds) mature in the last year of the issue's term. Alternatively, the bulk of the bonds may mature at the first maturity date with the rest of the bonds gradually maturing over the remainder of the issue's life.
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Serial Option
- A short-term option on a futures contract in which the underlying expires in a forward month. In a serial option, the option expires before the underlying comes to maturity. Exercising the option places the holder in a position of the nearby month futures contract. Usually, the underlying futures will expire in the following month.
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Series 11
- A securities license for sales assistants who also take unsolicited securities orders for customers.
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Series 24
- A securities license entitling the holder to supervise and manage branch activities. Before taking the Series 24 exam, you must have your Series 7 license.
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Series 26
- A securities license entitling the holder to register as a limited principal who supervises and manages sales activities for investment companies and annuities. The multiple choice exam is administered by the Financial Industry Regulatory Authority (FINRA) and candidates must first pass this 110 question exam with a grade of 70% or more in order to qualify for registration as an Investment Company Products/Variable Contracts limited principal.
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Series 27
- A securities license entitling the holder to become a chief financial officer for a FINRA member firm.
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Series 3
- A securities license entitling the holder to sell commodities or futures contracts.
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Series 30
- A securities license entitling the holder to become a futures branch office manager.
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Series 31
- A securities license entitling the holder to sell managed futures (funds).
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Series 39
- A two-hour exam offered by the Financial Industry Regulatory Authority (FINRA) that tests a person's knowledge of how direct participation programs (DPPs) are structured, how to manage registered representatives within a broker/dealer, and the regulatory and fiduciary requirements of the FINRA and the Securities and Exchange Commission (SEC).
The Series 39 exam consists of 95 questions, and a score of 70% or better is required for a passing grade. Qualified individuals can become principals at broker/dealers that deal in or market DPPs, which are typically set up as limited partnerships (LPs). The Series 39 exam is also known as the direct participation program limited registered principal qualification exam.
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Series 4
- A securities license entitling the holder to supervise options sales personnel and compliance issues. Before taking the Series 4 exam, you must have your Series 7 license.
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Series 55
- A securities license entitling the holder to actively participate in equity trading.
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Series 6
- A securities license entitling the holder to register as a limited representative and sell mutual funds, variable annuities and insurance premiums. Holders of the Series 6 license are not permitted to sell corporate or municipal securities, direct participation programs and options.
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Series 63
- A securities license entitling the holder to solicit orders for any type of security in a particular state. This license is required in addition to the Series 7 or Series 6.
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Series 65
- A securities license required by most U.S. states for individuals that act as an investment advisor.
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Series 66
- An exam administered by the Financial Industry Regulatory Authority (FINRA). Successful completion of the Series 66 exam is equivalent to successful completion of both the Series 63 and Series 65 exams.
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Series 7
- A general securities registered representative license administered by the Financial Industry Regulatory Authority (FINRA) that entitles the holder to sell all types of securities products with the exception of commodities and futures.
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Series 9/10
- A securities license entitling the holder to supervise branch activities. Before taking the Series 9/10 exam, you must have your Series 7 license.
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Series A Financing
- The first round of financing undergone for a new business venture after seed capital. Generally, this is the first time that company ownership is offered to external investors. Series A financing, may be provided in the form of preferred stock, and may offer anti-dilution provisions in the event that further financing through preferred or common stock occurs in the future.
Also known as "A round" or "A round financing".
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Series E Bond
- Accrual bonds that were issued at 75% of the face amount. Interest is paid at redemption as part of the redemption value. Series E Bond interest is reportable for Federal income tax purposes for the year in which the Series E Bonds are redeemed, reach final maturity or are otherwise disposed of, whichever occurs earliest. Replaced with Series EE Bond in 1980.
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Series EE Bond
- A non-marketable, interest-bearing U.S. government savings bond that is guaranteed to at least double in value over the initial term of the bond, typically 20 years. Most Series EE bonds have a total interest-paying life that extends beyond the original maturity date, up to 30 years from issuance.
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Series HH Bond
- A 20-year non-marketable U.S. government savings bond that pays semi-annual interest based on a coupon rate. This coupon is locked in at a fixed rate for the first 10 years, after which it is reset by the U.S. Treasury for the rest of the bond's life. Interest on Series HH bonds is exempt from state and local - but not federal - taxes.
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Series I Bond
- A non-marketable, interest-bearing U.S. government savings bond that is a combination of two separate rates:
1) Fixed Interest Rate
2) Variable Inflation Rate (adjusted semiannually)
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Serious Delinquency
- When a single-family mortgage is 90 days (or more) past due and the bank considers the mortgage in danger of default. Once a mortgage is in default, a lender typically initiates foreclosure proceedings.
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Service Certificates
- Bond-like certificates that promised payments at maturity date to World War I (WWI) veterans. Service certificates were granted to WWI veterans under the Adjusted Service Certificate Law in 1924, which promised "bonus" payments to eligible soldiers redeemable in 1945. Service certificates had a face value like a bond and the promised payment at maturity included compound interest.
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Service Shares
- Mutual fund units that charge service fees to their shareholders. The purpose of these fees is to compensate individuals who answer investor inquiries and provide information to the public or to investors about the fund. FINRA (formerly the NASD) limits funds from charging service fees in excess of 0.25% of their average net assets per year.
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Servicing Fee
- A percentage of each mortgage payment made by a borrower to a mortgage servicer as compensation for keeping a record of payments, collecting and making escrow payments, passing principal and interest payments along to the note holder, etc. Servicing fees generally range from 0.25-0.5% of the remaining principal balance of the mortgage each month.
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Servicing Strip
- A security created by the stream of cash flows that result from the servicing fee on a mortgage. Servicing strips trade in a secondary market much like mortgage-backed securities do; the seller of the servicing strip has the ability to service the mortgage.
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Set-Up Hedge
- An arbitrage strategy involving a long position in a convertible security and shorting its underlying stock. A set-up hedge looks to capitalize on mispriced conversion factors, while isolating risk unrelated to the error. The trader will profit when the underlying asset appreciates, increasing the premium on the convertible security.
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Settlement Agent
- 1. The party involved in completing a transaction between a buyer and seller. This is done through the transfer of securities to the buyer and the transfer of cash or other compensation to the seller.
2. A real estate professional who functions chiefly for the buyer by conveying the selling interest from the buyer to the seller and ensuring the orderly transfer of the legal title from the seller to the buyer through the closing process.
Also known as a "closing agent" or "conveyancer".
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Settlement Date
- 1. The date by which an executed security trade must be settled. That is, the date by which a buyer must pay for the securities delivered by the seller.
2. The payment date of benefits from a life insurance policy.
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Settlement Date Accounting
- An accounting method that accountants and bookkeepers use to record transactions in the company's general ledger when a given transaction has been fulfilled, which is when performance by both parties has been satisfied. Under settlement date accounting, any interest associated with a transaction must also be accrued when the transaction is settled.
Settlement date accounting is similar to trade date accounting.
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Settlement Period
- The period of time between the settlement date and the transaction date that is allotted to the parties of a transaction to satisfy the transaction's obligations. The buyer must make payment within the settlement period, while the seller must deliver the purchased security within this period.
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Settlement Price
- The average price at which a contract trades, calculated at both the open and close of each trading day.
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Settlement Risk
- The risk that one party will fail to deliver the terms of a contract with another party at the time of settlement. Settlement risk can be the risk associated with default at settlement and any timing differences in settlement between the two parties. This type of risk can lead to principal risk.
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Settlement Statement
- A statement that summarizes all the fees and charges that both the homebuyer and seller face during the settlement process of a housing transaction. This form, which is under the jurisdiction of the U.S. Department of Housing and Urban Development, is also known as the HUD-1.
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Settling Price
- The price used daily by clearing houses to clear all trades and settle accounts between clearing members. Also commonly referred to as "settlement price."
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Setup Price
- A price level predetermined as the point of entry into a specific security, stock, or currency. Once the setup price is broken the trader will enter the position determined by the setup. This could include shorting a stock because they think the price will drop or going long because they expect an upward movement.
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Severability
- A clause in a contract that allows for the terms of the contract to be independent of one another, so that if a term in the contract is deemed unenforceable by a court, the contract as a whole will not be deemed unenforceable. If there were no severability clause in a contract, a whole contract could be deemed unenforceable because of one unenforceable term.
Also known as a "severability clause" or a "savings clause".
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Severance Package
- A bundle of pay and benefits offered to an employee upon being laid off from a company. The receipt of a severance package is contingent upon signing a severance agreement. The amount of money received is usually based on the length of employment prior to termination, and may include payment for unused vacation and sick days, and unreimbursed business expenses. Other continued benefits that may be offered or negotiated include life insurance, disability insurance and the use of company property, such as a laptop, cell phone, personal digital assistant (PDA) or vehicle. Companies may also offer outplacement assistance, to help the former employee find a new job.
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Severance Pay
- Compensation that an employer gives to someone who is about to lose his or her job.
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Severance Tax
- A tax imposed on the removal of nonrenewable resources such as crude oil, condensate and natural gas, coalbed methane and carbon dioxide.
Severance tax is charged to producers, or anyone with a working or royalty interest, in oil or gas operations in the imposing states. You may be charged severance tax even if you do not realize a net profit on your investment.
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SGD
- In currencies, this is the abbreviation for the Singapore Dollar.
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SGD (Singapore Dollar)
- The currency abbreviation for the Singapore dollar (SGD), the currency of Singapore. The Singapore dollar is made up of 100 cents and is often presented with the symbol $ or S$ to set it apart from other dollar-based currencies. In Singapore, the dollar is also known as the "Sing".
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Shadow
- A small line found on a candle in a candlestick chart that is used to indicate where the price of a stock has fluctuated relative to the opening and closing prices. Essentially, these shadows illustrate the highest and lowest prices at which a security has traded over a specific time period.
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Shadow Banking System
- All financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. Shadow Banking System also refers to unregulated activities by regulated institutions. Examples of intermediaries not subject to regulation, include hedge funds, unlisted derivatives and other unlisted instruments. Examples of unregulated activities by regulated institutions include credit default swaps.
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Shadow Inventory
- A term that refers to real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market.
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Shadow Open Market Committee - SOMC
- A committee created by two university professors, from Rochester and Carnegie Mellon, in the early 1970's. The committees purpose is to evaluate the policy and actions of the FOMC.
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Shadow Pricing
- The arbitrary assignment of dollar values to non-marketed goods.
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Shadow Rating
- 1. The name given to a bond rating performed on an issuing party by a credited institution, but without any public announcement of the results.
2. A rating given by S&P to Israel Bonds, which are not permitted to be traded on the secondary market.
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Shadowing
- The process of creating values for variables that don't rely purely on market value. Some of these variables have a market value in the present but have indeterminable future market values due to variable conditions.
Shadowing is used as in cost-benefit analysis, which allows analysts to evaluate the future comprehensive value of a variable in any number of projected conditions.
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Shakeout
- A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry.
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Shakeup
- A series of events and processes that a company's management team facilitates in order to change and/or reorganize itself in an attempt to improve its current situation. Shakeups can occur when a business has undergone new ownership or has been performing poorly, and a shift in the company's team or overall strategy is a necessary catalyst for potential success.
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Shanghai Stock Exchange
- The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities Regulatory Commission (CSRC). Stocks, funds and bonds are all traded on the exchange, which has listing requirements including that a company must be in business and be earning a profit for at least three years before joining the exchange.
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Share Capital
- Funds raised by issuing shares in return for cash or other considerations. The amount of share capital a company has can change over time because each time a business sells new shares to the public in exchange for cash, the amount of share capital will increase. Share capital can be composed of both common and preferred shares.
Also known as "equity financing".
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Share Certificate
- A share certificate is a written document signed on behalf of a corporation, and serves as legal proof of ownership of the number of shares indicated.
Also referred to as a "stock certificate".
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Share Class
- A designation applied to a specified type of security such as common stock or mutual fund units. Companies that have more than one class of common stock usually identify a given class with alphabetic markers, such as "Class A" shares and "Class B" shares. Different share classes within the same entity typically confer different rights on their owners.
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Share Draft
- A type of draft used in credit unions as a way to access funds in individual accounts. Share draft accounts at credit unions are the equivalent of personal checking accounts at banks. Likewise, share drafts are the equivalent of bank checks. Shares represent partial ownership in a credit union, and credit union members (shareholders) write drafts (checks) as a way to access the value of their partial ownership (shares).
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Share Of Wallet - SOW
- A marketing term referring to the amount of the customer's total spending that a business captures in the products and services that it offers. Increasing the share of a customer's wallet a company receives is often a cheaper way of boosting revenue than increasing market share.
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Share Premium Account
- Usually found on the balance sheet, this is the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share.
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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. This is 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.
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Share Repurchase
- A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued.
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Share Turnover
- A measure of stock liquidity calculated by dividing the total number of shares traded over a period by the average number of shares outstanding for the period. The higher the share turnover, the more liquid the share of the company.
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Shared Equity Finance Agreements
- When two parties purchase a primary residence because one party is unable to purchase the residence on its own. In a shared equity finance agreement, the financially stronger party acts as the investing owner, while the other party is the occupying owner. These agreements are usually charitable in nature, and state that the latter party must pay a proportional share of the mortgage payment as well as expenses, such as insurance and property taxes.
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Shared-Appreciation Mortgage - SAM
- A special kind of mortgage that allows the purchaser to pay a given amount of the loan balance to the lender by passing along a portion of the gain in value of the property. In return for this additional compensation, the lender agrees to charge a rate of interest on the loan that is below the prevailing market rate. Shared-appreciation mortgages allow the lender to recoup the balance of the "interest" charged when the property is sold.
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Shareholder
- Any person, company, or other institution that owns at least one share in a company.
A shareholder may also be referred to as a "stockholder".
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Shareholder Activist
- A person who attempts to use his or her rights as a shareholder of a publicly-traded corporation to bring about social change. Some of the issues most often addressed by shareholder activists are related to the environment, investments in politically sensitive parts of the world and workers' rights (sweatshops).
The term can also refer to investors who believe that a company's management is doing a bad job and who attempt to gain control of the company and replace management for the good of the shareholders.
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Shareholder Equity Ratio
- A ratio used to help determine how much shareholders would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders' equity by total assets of the firm, and it represents the amount of assets on which shareholders have a residual claim. The figures used to calculate the ratio are taken from the company's balance sheet.
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Shareholder Register
- A list of active owners of a company's shares, updated on an ongoing basis. The shareholder register requires that every current shareholder be recorded. The register includes each person's name, address and number of shares held, but can further detail the holder's occupation and price paid. The shareholder register is fundamental to the examination of the ownership of a company.
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Shareholder Services Agent
- A financial institution or similar entity responsible for looking after the needs of the shareholders of publicly-traded corporations or mutual funds. Shareholder services agents typically look after investor record-keeping and communication and other administrative responsibilities, and they attend to shareholders' problems or concerns.
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Shareholder Value
- The value delivered to shareholders because of management's ability to grow earnings, dividends and share price. In other words, shareholder value is the sum of all strategic decisions that affect the firm's ability to efficiently increase the amount of free cash flow over time.
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Shareholder Value Added - SVA
- A value-based performance measure of a company's worth to shareholders. The basic calculation is net operating profit after tax (NOPAT) minus the cost of capital from the issuance of debt and equity, based on the company's weighted average cost of capital:
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Shareholder Value Transfer - SVT
- A measurement of the amount of shareholders' equity flowing out of a company to its executives through exercised stock options.
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Shareholders' Agreement
- An arrangement among a company's shareholders describing how the company should be operated and the shareholders' rights and obligations. It also includes information on the regulation of the shareholders' relationship, the management of the company, ownership of shares and privileges and protection of shareholders.
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Shareholders' Equity
- A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity represents the amount by which a company is financed through common and preferred shares.
Also known as "share capital", "net worth" or "stockholders' equity".
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Shares
- A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares.
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Sharia
- Islamic religious law that governs not only religious rituals, but aspects of day-to-day life in Islam. Sharia, literally translated, means "the way."
There is extreme variation in how Sharia is interpreted and implemented among and within Muslim societies today. This is especially prevalent for its financial laws.
Also known as "Shariah" or "Shari'a"
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Shark Repellent
- Slang term for any one of a number of measures taken by a company to fend off an unwanted or hostile takeover attempt. In many cases, a company will make special amendments to its charter or bylaws that become active only when a takeover attempt is announced or presented to shareholders with the goal of making the takeover less attractive or profitable to the acquisitive firm.
Also known as a "porcupine provision".
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Shark Watcher
- A firm specializing in the early detection of takeovers. The firm's primary business is usually the solicitation of proxies for client corporations.
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Sharpe Ratio
- A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance. The Sharpe ratio is calculated by subtracting the risk-free rate - such as that of the 10-year U.S. Treasury bond - from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. The Sharpe ratio formula is:
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Sheep
- An investor who lacks a focused trading strategy and trades on emotion and the suggestions of others, including friends, family and financial gurus. This type of investor often makes rash investments without first determining whether these decisions are financially viable. The behavior of sheep contrasts with that of bulls and bears, who have focused views about the market.
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Shelf Offering
- A Securities and Exchange Commission (SEC) provision that allows an issuer to register a new issue security without selling the entire issue at once.
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Shelf Registration
- A regulation that a corporation can evoke to comply with U.S. Securities and Exchange Commission (SEC) registration requirements for a new stock offering up to three years before doing the actual public offering. However, the corporation must still file the required annual and quarterly reports with the SEC.
In terms of SEC regulations, it is formally known as SEC Rule 415.
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Shell Corporation
- A corporation without active business operations or significant assets.
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Shenzhen Stock Exchange (SHZ) .SZ
- One of three stock exchanges in the People's Republic of China, located in Shenzhen. The SHZ lists more than 1500 companies, most of which are controlled by the Chinese government. It lists the Shenzhen Stock Exchange 100 Index, which is composed of various Chinese benchmark banks and companies.
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Sheriff's Sales
- A term used to refer to distressed public property auctions. Sheriff's sales is generally the last step in the foreclosure process after the homeowner has exhausted all his/her options to avoid defaulting on a mortgage. Once the borrower has defaulted, the lender will file suit in court to recover its loan loss, and if the court awards a judgement, the property will be scehduled to be sold at a public auction.
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Shingle Theory
- A suitability doctrine first introduced by the Securities and Exchange Commission in the 1930s. The idea is that a broker who hangs out a shingle will represent his or her customers fairly and responsibly when making suggestions regarding securities.
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Shipping Certificate
- An instrument used by futures exchanges as a negotiable commitment by an approved delivery facility to transfer the underlying commodity to the holder of the certificate under the prescribed terms.
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Shirkah
- An Islamic finance term that describes a partnership between two or more individuals. The parties involved combine a portion of their capital or labor in order to share in the profits and losses of the business.
Shirkah, in the Islamic theory and philosophy of law, is divided into two categories:
1. Shirkah-ul-milk: Joint ownership between the parties involved, where each party has provided capital in order to purchase a particular property.
2. Shirkah-ul-'aqd: A partnership created through a contract. This can also be translated to mean a type of joint commercial enterprise.
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Shock Absorber
- A temporary restriction placed on the trading of index futures because of substantial intraday decreases in the underlying indexes.
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Shoestring
- A slang term used to describe a small amount of money that is considered to be inadequate for its intended purpose. A shoestring can be used in a number of idioms, such as: "The company financed that last project on a shoestring," or "Jim is living off of a shoestring budget."
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Shogun Bond
- A type of foreign-currency denominated bond that is issued in Japan by foreign entities. Organizations such as the World Bank have issued such debt instruments in the past .
Also known as a "geisha bond".
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Shooting Star
- A type of candlestick formation that results when a security's price, at some point during the day, advances well above the opening price but closes lower than the opening price.
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Short (or Short Position)
- 1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
2. In the context of options, it is the sale (also known as "writing") of an options contract.
Opposite of "long (or long position)".
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Short And Distort
- An illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and other kinds of unverified bad news in an attempt to drive down the equity's price and realized a profit.
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Short Covering
- Purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price.
Also referred to as "buy to cover" or "buyback".
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Short Exempt
- A short sale order in which the uptick rule doesn't apply to the trade. The trade can go through on a down tick, or a downward move in price, where a traditional short order trade has to be done on an uptick, or upward move in price.
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Short Form Prospectus Distribution System - SFPDS
- A system that allows firms making an issue to produce a short form prospectus. The short form prospectus must contain any material changes not previously reported.
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Short Hedge
- An investment strategy that is focused on mitigating a risk that has already been taken. The "short" portion of the term refers to the act of shorting a security, usually a derivatives contract, that hedges against potential losses in an investment that is held long (i.e., the risk that was already taken).
If a short hedge is executed well, gains from the long position will be offset by losses in the derivatives position, and vise versa.
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Short Interest
- The total number of shares of a security that have been sold short by customers and securities firms.
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Short Interest Ratio
- A sentiment indicator that is derived by dividing the short interest by the average daily volume for a stock. This indicator is used by both fundamental and technical traders to identify the prevailing sentiment the market has for a specific stock.
Also known as the "short ratio".
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Short Interest Theory
- The theory that a large short interest is the predecessor of a rise in the price of a stock.
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Short Market Value
- The total value of all short sales in place in a customer's account at the end of the trading day.
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Short Refinance
- The refinancing of a mortgage by a lender for a borrower currently in default on his or her payments. This is done to avoid foreclosure. Typically, the new loan amount is less than the existing outstanding loan amount and the difference is typically forgiven by the lender. A lender might do this because it is more cost effective than foreclosure proceedings.
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Short Run
- A period of time in which the quantity of some inputs cannot be increased beyond the fixed amount that is available.
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Short Sale
- A market transaction in which an investor sells borrowed securities in anticipation of a price decline and is required to return an equal number of shares at some point in the future.
The payoff to selling short is the opposite of a long position. A short seller will make money if the stock goes down in price, while a long position makes money when the stock goes up. The profit that the investor receives is equal to the value of the sold borrowed shares less the cost of repurchasing the borrowed shares.
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Short Sell Against the Box
- The act of short selling securities that you already own. This results in a neutral position where your gains in a stock are equal to the losses. For example, if you own 100 shares of ABC and you tell your broker to sell short 100 shares of ABC, you have shorted against the box. An alternative to short selling against the box is to buy a put on your stock. This may or may not be less expensive than doing the short sale.
Also known as "shorting against the box".
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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.
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Short Squeeze
- A situation in which a lack of supply and an excess demand for a traded stock forces the price upward.
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Short Straddle
- An options strategy carried out by holding a short position in both a call and a put that have the same strike price and expiration date. The maximum profit is the amount of premium collected by writing the options.
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Short Tax Year
- A tax year, whether fiscal or calendar, that is less than one year in length. Short tax years occur either when a business is started or the method of accounting is changed. Short tax years occur only for businesses, never for individual taxpayers, because individuals must file on a calendar-year basis and do not have the option of choosing a fiscal year.
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Short Tender
- An investing practice that involves using borrowed stock to respond to an offer made during an attempted acquisition of some or all of a shareholders' shares. The purchase price is usually at a premium to the market price. This practice is restricted by the Securities and Exchange Commission under rule 14e-4 of the Securities Exchange Act.
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Short Term
- 1. In general, holding an asset for short period of time.
2. In accounting, an asset expected to be converted into cash in the next year, or a liability coming due in the next year. Also known as current assets and liabilities.
3. For investing, a security that matures in one year or less.
4. For taxes, a holding period of less that one year.
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Short The Basis
- A futures strategy involving the purchase of a futures position to hedge against a future commitment to deliver the underlying commodity.
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Short-Sale Rule
- A Securities and Exchange Commission (SEC) trading regulation that restricted short sales of stock from being placed on a downtick in the market price of the shares. Short sales could only be permitted on upticks (last trade higher than the one before) or zero-plus ticks (last trade is the same as previous, which was an uptick). The regulation was passed in 1938 to prevent selling shares short into a declining market; at the time market mechanisms and liquidity couldn't be guaranteed to prevent panic share declines or outright manipulation.
This regulation was rescinded in July 2007 by decree of the SEC; as a result short sales can occur (where eligible) on any price tick in the market, whether up or down.
The short sale rule was also known as the "plus-tick rule", "tick-test rule", or "uptick rule".
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Short-Swing Profit Rule
- A Securities & Exchange Commission regulation that requires company insiders to return any profits made from the purchase and sale of company stock if both transactions occur within a six-month period. A company insider, as determined by the rule, is any officer, director or holder of more than 10% of the company’s shares.
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Short-Term Debt
- An account shown in the current liabilities portion of a company's balance sheet. This account is comprised of any debt incurred by a company that is due within one year. The debt in this account is usually made up of short-term bank loans taken out by a company.
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Short-Term Gain
- A capital gain realized by the sale or exchange of a capital asset that has been held for exactly one year or less. Short-term gains are taxed at the taxpayer's top marginal tax rate.
A short-term gain can only be reduced by a short-term loss. A taxable capital loss is limited to $3,000 for single taxpayers and $1,500 for married taxpayers filing separately.
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Short-Term Investment Fund - STIF
- A type of fund that invests in short-term investments of high quality and low risk. The goal of this type of fund is to protect capital with low-risk investments while achieving a return that beats a relevant benchmark such as a Treasury bill index.
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Short-Term Investments
- An account in the current assets section of a company's balance sheet. This account contains any investments that a company has made that will expire within one year. For the most part, these accounts contain stocks and bonds that can be liquidated fairly quickly.
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Shortfall
- The amount by which the capital required to fulfill a financial obligation exceeds available capital.
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Shotgun Clause
- A buy-sell provision used by related parties in a business venture which gives an investor within the partnership the right to offer his/her portion to a partner at a specified price. If the partner does not buy the offered interest at this price, the partner must then sell his/her own interest to the offering party at the same specified price.
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Shout Option
- An exotic option that allows the holder to lock in a defined profit while maintaining the right to continue participating in gains without a loss of locked-in monies.
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SHP
- In currencies, this is the abbreviation for the St. Helana Pound.
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SHP (Saint Helena Pound)
- The currency abbreviation for the Saint Helena pound (SHP), the currency for Saint Helena and Ascension Island. The Saint Helena pound is made up of 100 pence and is often presented with the symbol £. Saint Helena and Ascension Island are British overseas territories.
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Shrinkage
- The amount by which inventory on hand is shorter than the amount of inventory recorded.
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Shutdown Point
- A point of operations where a firm is indifferent between continuing operations and shutting down temporarily. The shutdown point is the combination of output and price where a firm earns just enough revenue to cover its total variable costs.
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Side Pocket
- A type of account used in hedge funds to separate illiquid assets from other more liquid investments. Once an investment enters a side pocket account, only the present participants in the hedge fund will be entitled to a share of it. Future investors will not receive a share of the proceeds in the event the asset's returns get realized.
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Sidecar Investment
- An investment strategy in which one investor allows a second investor to control where and how to invest the capital. The sidecar investment will usually be used when one of the parties lacks the ability or confidence to invest for themselves. The strategy will place trust in someone else's ability to gain profits.
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Sideways Market
- A situation where stock prices change little over a specific period of time.
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Sideways Trend
- Describes the horizontal price movement that occurs when the forces of supply and demand are nearly equal. A sideways trend is often regarded as a period of consolidation before the price continues in the direction of the previous move.
A sideways price trend is also commonly known as a "horizontal trend".
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Sight Letter of Credit
- A letter of credit that is payable once it is presented along with the necessary documents.
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Signal Line
- A moving average plotted alongside a technical indicator and is used to create transaction signals. Buy signals are generally created when the indicator crosses above the signal line, while sell signals are generated when the indicator crosses below it.
A signal line is also commonly known as a "trigger line."
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Signaling Approach
- The idea that insiders have information not available to the market. Moves made by insiders can signal information to outsiders and change the stock price.
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Signature Guarantee
- A form of authentication issued by a bank or other financial institution that verifies the legitimacy of a signature and the signatory's overall request. This type of guarantee is often used in situations where financial instruments are being transferred. In most cases, the guarantor accepts all consequences in the event that the signature is fraudulent.
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Signature Loan
- A type of personal loan offered by banks and other finance companies that uses only the borrower's signature and promise to pay as collateral.
A signature loan can typically be used for any purpose the borrower chooses, although the interest rates will be higher than most forms of credit due to the lack of any real collateral.
Also known as a "good faith loan" or "character loan".
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Significant Order
- An order to buy or sell a security that, due to its abnormally large size, has the potential to have a significant effect on a security's price.
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Silent Partner
- An investor who does not have any management responsibilities but provides capital and shares liability for any losses experienced by the entity.
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Silent Second Mortgage
- A secondary mortgage placed on an asset that is not disclosed to the lender of the original loan. Silent second mortgages are used when a purchaser can't afford the down payment required by the initial mortgage. The mortgage is silent because the original lender is unaware of its presence. In many circumstances, a silent second mortgage is a type of fraud.
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Silicon Valley
- Nickname for the region in North California (around San Jose) that contains a huge concentration of computer and internet companies.
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Siliconaires
- Slang referring to young dotcom entrepreneurs in their 20s and 30s who found themselves suddenly rich due to stock options from their Silicon Valley Internet companies.
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Silo Mentality
- An attitude found in some organizations that occurs when several departments or groups do not want to share information or knowledge with other individuals in the same company. A silo mentality reduces efficiency and can be a contributing factor to a failing corporate culture.
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Silver
- An element commonly used in jewelry, coins, electronics, and photography. Silver has the highest electrical conductivity of any metal.
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Silver ETF
- An exchange-traded fund that invests primarily in raw silver assets, which are held in trust by the fund manager and/or custodian. Typically, silver ETFs are established as grantor trusts, where each share of the ETF represents the specific right to a precise amount of silver, measured in ounces.
Silver ETFs aim to track as closely as possible the spot price of silver on the open market.
The first to market was the iShares Silver Trust, managed by Barclays Global Investors and introduced in 2006.
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Silver Parachute
- A form of severance that is paid to employees of a company should the company be taken over by another.
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Silver Thursday
- A steep fall in the price of silver that occurred on Thursday March 27, 1980. The sharp drop, on Silver Thursday, was triggered by a failed attempt to corner the silver market and it led to massive panic in other commodities.
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Simple Interest
- A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate by the principal by the number of periods.
Where:
P is the loan amount
I is the interest rate
N is the duration of the loan, using number of periods
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Simple Interest Bi-Weekly Mortgage
- A bi-weekly mortgage payment plan in which the payments made by the borrower are applied immediately toward the remaining principal balance of the mortgage as they are received. This differs from a traditional bi-weekly plan, where the first payment received during a month is held by the servicer of the mortgage until the second payment for that month is received; only then is the sum of the two payments is applied toward the remaining principal balance of the mortgage.
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Simple Moving Average - SMA
- A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react.
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Simple-Interest Mortgage
- A mortgage where interest is calculated on a daily basis, as opposed to a traditional mortgage where interest is calculated on a monthly basis. On a simple-interest mortgage, the daily interest charge is calculated by dividing the interest rate by 365 days, and then multiplying that number by the outstanding mortgage balance. If you multiply the daily interest charge by the number of days in the month, you will get the monthly interest charge.
Because the total number of days counted in a simple-interest mortgage calculation is greater than a traditional mortgage calculation, the total interest paid on a simple interest mortgage will be slightly larger than a traditional mortgage.
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Simplified Employee Pension - SEP (Simplified Employee Pension IRA)
- A retirement plan that an employer or self-employed individuals can establish. The employer is allowed a tax deduction for contributions made to the SEP plan and makes contributions to each eligible employee's SEP IRA on a discretionary basis.
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Sin Tax
- A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. These type of taxes are levied by governments to discourage individuals from partaking in such activities without making the use of the products illegal. These taxes also provide a source of government revenue.
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Sine Wave
- An geometric waveform that oscillates (moves up, down or side-to-side) periodically, and is defined by the function y = sin x. In other words, it is an s-shaped, smooth wave that oscillates above and below zero.
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Sinful Stock
- Stock from companies that are associated with (or are directly involved in) activities that are widely considered to be unethical or immoral.
Also known as "sin stock".
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Singapore Exchange - SGX
- Asia-Pacific's first publicly traded exchange that was inaugurated on December 1, 1999. The SGX is the marketplace for many of Singapore's leading companies and is one of the primary markets for equities and various derivatives in south-east Asia.
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Singapore Interbank Offered Rate - SIBOR
- The interest rate at which banks located in Asian time zones can borrow funds from other banks located in the region. In Asia, the SIBOR is used more commonly than the LIBOR. It is set daily by the Association of Banks in Singapore (ABS). More than anything else, the SIBOR serves as a benchmark, or reference rate for borrowers and lenders that are directly or indirectly involved in an Asian financial market.
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Single
- The filing status used by a taxpayer who is unmarried and does not qualify for any other filing status.
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Single Euro Payment Area - SEPA
- A system that is designed to create financial efficiency for countries using the euro by providing a unified system in which to perform financial transactions. The SEPA seeks to create a better system for credit transfers, an improved debit system and a cheaper way for individuals and firms to make transactions within member countries or regions.
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Single Payment Options Trading - SPOT
- A type of option product that allows an investor to set not only the conditions that need to be met in order to receive a desired payout, but also the size of the payout he or she wishes to receive if the conditions are met. The broker that provides this product will determine the likelihood that the conditions will be met and, in turn, will charge what it feels is an appropriate commission. This type of arrangement is often referred to as a "binary option" because only two types of payouts are possible for the investor:
1. The conditions set out by both parties occur, and the investor collects the agreed-upon payout amount.
2. The event does not occur and the investor loses the full premium paid to the broker.
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Single Stock Future - SSF
- A futures contract with an underlying of one particular stock, usually in batches of 100. No transmission of share rights or dividends occur.
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Single-Country Fund
- A mutual fund that restricts its investment to the assets of one country and is able to allocate its funds only within the range of investment instruments available in the specified country. This restriction is based on the mutual fund prospectus. If the fund's prospectus states that it is only investing in one country, the fund is bound by this statement.
Also known as a "country fund".
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Single-Digit Midget
- A stock with a price that is below $10 per share. Although there are many large companies that trade below $10 per share, "single-digit midget" is a buzz word usually used to describe stocks of companies which have seen a price drop from much higher levels. This term was widely used after many dot-coms' prices dropped severely in the early 21st century.
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Single-Life Payout
- One of two payout option methods an employer uses to distribute retirement benefits. At retirement, a retiree has the choice of either a single-life payout or a joint-life payout. A single-life payout means only the employee will be receiving the payments for the rest of his/her life, but the payments stop upon his/her death.
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Sinkable Bond
- A bond issue that is backed by a fund, called a sinking fund, that sets aside money on a regular basis to ensure investors that principal and interest payments will be made as promised. Sinkable bonds reduce the risk for investors and therefore enable the issuer to pay a lower interest rate on the sinkable bond being issued. Companies are required to disclose to investors their sinkable bond obligations through their corporate financial statements and prospectus.
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Sinker
- A bond whose payments are provided by the issuer's sinking fund.
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Sinking Fund
- A means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market.
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Sinking Fund Call
- A provision allowing a bond issuer the opportunity to buy outstanding bonds from bondholders for a set rate, using money (a sinking fund) from the issuer's earnings saved specifically for security buybacks. Because it adds doubt for investors over whether the bond will continue to pay until its maturity date, a sinking fund call is seen as an additional risk for investors.
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Sir Allen Stanford
- A former banker that is under investigation for securities fraud in excess of $8 billion. It was revealed that Allen Stanford grossly misinformed his 50,000 investors about the level of professional management that they were receiving. Allen and his associates are also suspected of possible dealings with Mexican drug cartels.
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Sir John Templeton
- An investor considered by many to be one of the greatest investors and mutual fund managers of all time. Sir John Templeton (1912-2008) founded the Templeton Growth Fund in 1954, which was one of the first U.S. mutual funds to embrace global investing. He is best known for his focus on the fundamental analysis of stocks and contrarian investing style, as well as his amazing sense of philanthropy.
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SIT
- In currencies, this is the abbreviation for the Slovenian Tolar.
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SIT (Slovenian Tolar)
- The currency abbreviation for the Slovenian tolar (SIT), the currency for Slovenia from October 1991 until December of 2006. The Slovenian tolar was made up of 100 stotinov. The correct pronunciation of the currency depended on the amount of currency to which the speaker was referring. 2 SIT were called 2 "tolarja"; 3 or 4 SIT were called 3 or 4 "tolarji"; "tolarjev" referred to 5 SIT or more.
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Sixteenth Amendment
- The amendment within the Constitution that gives Congress the power to collect taxes on income without apportioning it among the states. The Sixteenth Amendment was passed in 1909 and ratified in 1913. Before the ratification of the amendment, Congress had passed The Income Tax Act of 1894 that tried to establish a 2% income tax on anyone earning over $4,000 in income. The Tax Act was challenged and taken to the U.S. Supreme Court where it was deemed unconstitutional, which is why the government had to pass the amendment.
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Skewness
- Describe asymmetry from the normal distribution in a set of statistical data. Skewness can come in the form of "negative skewness" or "positive skewness", depending on whether data points are skewed to the left (negative skew) or to the right (positive skew) of the data average.
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Skimming
- An electronic method of capturing a victim's personal information used by identity thieves. The skimmer is a small device that scans a credit card and stores the information contained in the magnetic strip. Skimming can take place during a legitimate transaction at a business.
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Skin In The Game
- A term coined by renowned investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.
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Skip-Payment Mortgage
- A mortgage program that allows the borrower to skip (not pay) a mortgage payment. Depending upon the specific lender, there is generally no charge associated with skipping a payment. However, the interest accrued over the skipped-payment period is added to the principal balance of the mortgage, and the remaining amortization schedule is recalculated in a process called "deferred interest" or "negative amortization".
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Skirt Length Theory
- The idea that skirt lengths are a predictor of the stock market direction. According to the theory, if skirts are short, it means the markets are going up. And if skirt are long, it means the markets are heading down.
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SKK (Slovak Koruna)
- The currency abbreviation for the Slovak koruna (SKK), the currency for Slovakia from February 8, 1993, to January 1, 2009. The koruna is made up of 100 halierov and is often presented with the symbol Sk.
Also known as the "crown".
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Sleeping Beauty
- A company that is prime for takeover but has not been approached by an acquiring company.
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Slippage
- The difference between the expected price of a trade, and the price the trade actually executes at. Slippage often occurs during periods of higher volatility, when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.
Slippage is a term often used in both forex and stock trading, and although the definition is the same for both, slippage occurs in different situations for each of these types of trading.
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SLL (Sierra Leone Leone)
- The currency abbreviation for the Sierra Leone leone (SLL), the currency for the Republic of Sierra Leone, a country in West Africa. The Sierra Leone leone is made up of 100 cents and is often presented with the symbol Le, in the form Le100 for 100 leones.
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Slow Market
- 1. A market that currently exhibits low trading volumes and/or low volatility levels. The term slow market can be used to describe a market with few issues coming up for sale to investors through initial public offerings and secondary offerings in the equity markets, or through new issuance in the corporate bond market.
2. A market in which trades are not executed at the fastest possible speed. Generally, a delay of more than a few seconds during the execution of a trade is considered slow, especially on the electronic trading exchanges.
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SLR
- In currencies, this is the abbreviation for the Sri Lankan rupee.
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Sluggish Economy
- A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts.
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Slump
- A slang term denoting a period of poor performance or inactivity in an economy, market or industry. In economic terms, a slump specifically refers to a recession, signaling a slow down of business activity.
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Slush Fund
- A fund (or something similar) that does not have a designated purpose. These types of funds are often illegal.
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Small And Midsize Enterprises - SME
- A business that maintains revenues or a number of employees below a certain standard. Every country has its own definition of what is considered a small and medium-sized enterprise. In the United States, there is no distinct way to identify SME; it typically it depends on the industry in which the company competes.
In the European Union, a small-sized enterprise is a company with fewer than 50 employees, while a medium-sized enterprise is one with fewer than 250 employees.
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Small Business Investment Company (SBIC)
- A privately-owned investment company that is licensed by the Small Business Administration (SBA). Small Business Investment Companies (SBICs) supply small businesses with financing in both the equity and debt arenas. They provide a viable alternative to venture capital firms for many small enterprises seeking startup capital.
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Small Cap
- Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.
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Small Firm Effect
- A theory that holds that smaller firms, or those companies with a small market capitalization, outperform larger companies. This market anomaly is a factor used to explain superior returns in the Three Factor Model, created by Gene Fama and Kenneth French - the three factors being the market return, companies with high book-to-market values, and small stock capitalization.
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Small Minus Big - SMB
- One of three factors in the Fama and French stock pricing model. SMB accounts for the spread in returns between small- and large-sized firms, which is based on the company's market capitalization.
This factor is referred to as the "small firm effect", as smaller firms tend to outperform large ones.
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Small Order Execution System - SOES
- A computer network that automatically executes trades in Nasdaq market securities and some Nasdaq small cap securities. This allows individual investors to execute trades in fast moving markets.
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Small Trader
- An options or futures investor holding or controlling a single position below the required reporting levels.
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Small-Value Stock
- A description of stock where the underlying company has a small market capitalization, and whose stock price is currently trading at or lower than its book value. Finding a stock that fits both of these criteria is difficult, but it could be a worthwhile venture, because small-value stocks generally yield high returns.
The name can be somewhat misleading as these stocks are not of lesser value; "small" in this case simply refers to the size of the company.
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Smithsonian Agreement
- An agreement reached by a group of 10 countries (G10) in 1971 that effectively ended the fixed exchange rate system established under the Bretton Woods Agreement. The Smithsonian Agreement reestablished an international system of fixed exchange rates without the backing of silver or gold, and allowed for the devaluation of the U.S. dollar. This agreement was the first time in which currency exchange rates were negotiated.
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Smoking Gun
- Something that serves as indisputable evidence or proof, especially of a crime.
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Smurf
- Slang for somebody who frequently launders money.
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Snowball
- A method of efficient debt repayment in which the debtholder initially devotes only enough funds to cover the minimum payments on each debt, after which any remaining available funds from the debt repayment budget are spent on an additional payment to the debt bearing the highest interest rate. Once the debt with the highest interest rate is completely paid for, subsequent extra debt payments go toward the next highest interest-bearing debt. This process continues until all the debts are paid off.
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Soccer Mom Indicator
- An indicator based on the theory that listening to what people are talking about at their children's soccer games (or similar event) is one of the best ways to find out how the economy or investing environment was doing.
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Société d'Investissement À Capital Variable - SICAV
- A type of open-ended investment fund in which the amount of capital in the fund varies according to the number of investors. Shares in the fund are bought and sold based on the fund's current net asset value. SICAV funds are some of the most common investment vehicles in Europe.
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Social Capital
- An economic idea that refers to the connections between individuals and entities that can be economically valuable. Social networks that include people who trust and assist each other can be a powerful asset. These relationships between individuals and firms can lead to a state in which each will think of the other when something needs to be done. Along with economic capital, social capital is a valuable mechanism in economic growth.
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Social Good
- A good or service that benefits the largest number of people in the largest possible way. Some classic examples of social goods are clean air, clean water and literacy; in addition, many economic proponents include access to services such as healthcare in their definition of the social or "common good".
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Social Responsibility
- The principle that companies should contribute to the welfare of society and not be solely devoted to maximizing profits.
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Social Security
- A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits include retirement income, disability income, Medicare and Medicaid, and death and survivorship benefits. Social Security is one of the largest government programs in the world, paying out hundreds of billions of dollars per year.
Based on the year someone was born, retirement benefits may begin as early as age 62 and as late as age 67. The amount of income received is based on the average wages earned over the worker's lifetime, with a maximum calculable amount of $102,000 as of 2008. Spouses are also eligible to receive Social Security benefits, even if they have limited or non-existent work histories.
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Social Security Administration - SSA
- A U.S. government agency created in 1935 by President Franklin D. Roosevelt, the SSA administers the social insurance programs in the United States. The agency covers a wide range of social security services, such as disability, retirement and survivors' benefits. Previously operating under the Department of Health and Human Services, the SSA has operated as a wholly independent agency since 1994.
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Social Security Number - SSN
- A federal taxpayer identification number for Americans. An SSN number is required to get a job and claim taxes or other tax benefits.
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Socially Responsible Investment - SRI
- An investment that is considered socially responsible because of the nature of the business the company conducts. Common themes for socially responsible investments include avoiding investment in companies that produce or sell addictive substances (like alcohol, gambling and tobacco) and seeking out companies engaged in environmental sustainability and alternative energy/clean technology efforts. Socially responsible investments can be made in individual companies or through a socially conscious mutual fund or exchange-traded fund (ETF).
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Society for Worldwide Interbank Financial Telecommunications - SWIFT
- An industry owned co-operative supplying secure messaging services and interface software to financial institutions.
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Socionomics
- The study of social mood and its effects of social behavior. Socionomic theory suggests that trends in social actions such as the economy, financial markets and political preferences are influenced by trends in social moods.
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SOES Bandits
- A slang term for traders who make rapid buy and sell orders, using the SOES system, in order to make a profit from small price changes.
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Soft Call Provision
- A feature added to convertible fixed-income and debt securities. The provision dictates that a premium will be paid by the issuer if early redemption occurs.
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Soft Commodity
- A commodity such as coffee, cocoa, sugar and fruit. This term generally refers to commodities that are grown, rather than mined.
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Soft Currency
- Another name for "weak currency". The values of soft currencies fluctuate often, and other countries do not want to hold these currencies due to political or economic uncertainty within the country with the soft currency.
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Soft Dollars
- A means of paying brokerage firms for their services through commission revenue, as opposed to through normal direct payments (hard dollar fees).
The investing public tends to have a negative perception of soft dollar arrangements because they believe that buy-side firms should pay expenses out of their profits, rather than from investors' pockets. As such, the use of hard dollar compensation is becoming more common.
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Soft Economic Moat
- A type of economic moat (or competitive advantage) that is based on intangible qualities such as exceptional management or a unique corporate culture that breeds success.
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Soft Landing
- A term used to describe a rate of economic growth high enough to avoid recession, but slow enough to avoid high inflation.
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Soft Loan
- 1. A loan with a below-market rate of interest.
2. Loans made by multinational development banks and the World Bank to developing countries. Typically, soft loans have extended grace periods in which only interest or service charges are due. They also offer longer amortization schedules and lower interest rates than conventional bank loans.
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Soft Market
- A market that has more potential sellers than buyers. A soft market can describe an entire industry, such as the retail market, or a specific asset, such as lumber. This is often referred to as a buyer's market, as the purchasers hold much of the power in negotiations.
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Soft Metrics
- A slang term for intangible indicators used to value a startup company.
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Soft Money
- 1. The "one-time" funding from governments and organizations for a project or special purpose.
2. Paper currency, as opposed to gold, silver, or some other coined metal.
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Soft Paper Report
- A reference to a lack of confidence in a report's facts or general disrespect for a report's author. A soft paper report should have only one use – as toilet paper – which is how its name was derived.
Also known as a toilet paper report.
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Soft Patch
- A period of economic slowdown amid a larger trend of economic growth. This buzzword is most often used in the financial media and by the U.S. Federal Reserve to describe a period of economic weakness.
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Soft Stop Order
- A mental price or percentage set by traders where they will place a buy or sell order. A soft stop order is a position set by traders where they should buy or sell a security, however it is "soft" because it can be manipulated or changed depending on market conditions and special circumstances.
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Sold-Out Market
- A market for a specific futures contract that, due to a substantial liquidation of holdings by investors, has limited offerings.
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Sole Proprietorship
- The sole proprietor is an unincorporated business with one owner who pays personal income tax on profits from the business. With little government regulation, they are the simplest business to set up or take apart, making them popular among individual self contractors or business owners.
Many sole proprietors do business under their own names because creating a separate business or trade name isn't necessary.
Sole proprietorship is also known as "proprietorship".
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Solvency
- The ability of a corporation to meet its long-term fixed expenses and to accomplish long-term expansion and growth.
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Solvency Ratio
- One of many ratios used to measure a company's ability to meet long-term obligations. The solvency ratio measures the size of a company's after-tax income, excluding non-cash depreciation expenses, as compared to the firm's total debt obligations. It provides a measurement of how likely a company will be to continue meeting its debt obligations.
The measure is usually calculated as follows:
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Sophisticated Investor
- A type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity.
For certain purposes, net worth and income restrictions must be met before a person can be classified a sophisticated investor. The distinction makes an investor eligible to buy into certain investment opportunities, such as pre-IPO securities, that are considered "non-disclosure" or "non-prospectus" issues. Typically, a sophisticated investor must have either a net worth of $2.5 million or have earned more than $250,000 in the past two years to qualify.
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Sortino Ratio
- A ratio developed by Frank A. Sortino to differentiate between good and bad volatility in the Sharpe ratio. This differentiation of upwards and downwards volatility allows the calculation to provide a risk-adjusted measure of a security or fund's performance without penalizing it for upward price changes. It it is calculated as follows:
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SOS (Somaliland Shilling)
- The currency abbreviation for the Somaliland shilling (SOS), the currency for the Republic of Somaliland, a de facto independent republic located in northeast Africa. The Somaliland shilling is technically made up of 100 cents, but coins denominated in cents have never been issued. The Somaliland shilling is often presented with the symbol Sl. Sh., to differentiate itself from the prior currency, the Somali shilling (So. Sh.) which is no longer legal tender.
It is important to note that the ISO 4217 currency code SOS still refers to the Somalia shilling, even though it is no longer in circulation, because Somaliland remains unrecognized other countries and international organizations.
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Sotheby's
- One of the world's most venerable auction houses. The company is largely known for holding auctions of very valuable and rare collectors' items such as jewelry, antiques and fine art.
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Sour Crude
- The name given to barrels of crude oil that do not meet certain content requirements, such as low levels of sulfur and hydrogen.
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South African Reserve Bank
- The South African Reserve Bank is the reserve bank of the Republic of South Africa. Its functions include the formulating and implementing of South Africa's monetary policy, ensuring the efficiency of South Africa's financial system and educating South Africa's citizens about the monetary and economic situation of the country. Unlike the reserve banks of most commonwealth nations, the South African Reserve Bank has always been privately owned.
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South Sea Bubble
- One of the largest stock scams of all time. The U.K.-based South Sea Company's shares saw a huge appreciation based on rumor, speculation and false claims before plummeting and eventually becoming worthless. Thousands of people lost their life savings.
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Sovereign Bond
- A debt security issued by a national government within a given country and denominated in a foreign currency. The foreign currency used will most likely be a hard currency, and may represent significantly more risk to the bondholder.
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Sovereign Credit Rating
- The credit rating of a country or sovereign entity. Sovereign credit ratings give investors insight into the level of risk associated with investing in a particular country and also include political risks. At the request of the country, a credit rating agency will evaluate the country's economic and political environment to determine a representative credit rating. Obtaining a good sovereign credit rating is usually essential for developing countries in order to access funding in international bond markets.
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Sovereign Risk
- The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign-exchange contracts.
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Sovereign Wealth Fund - SWF
- Pools of money derived from a country's reserves, which are set aside for investment purposes that will benefit the country's economy and citizens. The funding for a sovereign wealth fund (SWF) comes from from central bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources. The types of acceptable investments included in each SWF vary from country to country; countries with liquidity concerns limit investments to only very liquid public debt instruments.
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SPAN Margin
- Short for standardized portfolio analysis of risk (SPAN). This is a leading margin system, which has been adopted by most options and futures exchanges around the world. SPAN is based on a sophisticated set of algorithms that determine margin according to a global (total portfolio) assessment of the one-day risk for a trader's account.
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Spark Spread
- The difference between the market price of electricity and its cost of production.
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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.
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Special Assessment Tax
- The levy assessed against the portion of a property that has been condemned by a public authority. The special assessment tax will reduce the amount of compensation awarded to the property owner because the owner is considered to have also benefited from the improvement.
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Special Dividend
- A non-recurring distribution of company assets, usually in the form of cash, to shareholders. A special dividend is larger compared to normal dividends paid out by the company. Also referred to as an "extra dividend".
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Special Drawing Rights - SDR
- An international type of monetary reserve currency, created by the International Monetary Fund (IMF) in 1969, which operates as a supplement to the existing reserves of member countries. Created in response to concerns about the limitations of gold and dollars as the sole means of settling international accounts, SDRs are designed to augment international liquidity by supplementing the standard reserve currencies.
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Special Economic Zone - SEZ
- Designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.
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Special Finance
- A sector of the auto lending industry for borrowers with a limited or tainted credit history. Special financing in the auto finance industry is risk based, which means that the terms of the loan are set so that the expected returns to the lender/investor are great enough to cover the risk of default by the borrower. Special finance loans typically carry a higher interest rate than is available to borrowers with a clean credit history.
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Special Memorandum Account - SMA
- A special account where excess margin generated from a client's margin account is deposited. Also known as "special miscellaneous account".
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Special Needs Child
- Children who have been determined to require special attention and specific necessities that other children do not. The state decides upon this status and offers benefits that follow a special needs child because it is believed the child will not be adopted if assistance is not provided.
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Special Purchase and Resale Agreement - SPRA
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Special Purpose Acquisition Company - SPAC
- A publicly-traded buyout company that raises money in order to pursue the acquisition of an existing company. SPACs raise blind pool money (most of which goes into a trust) from the public for an unspecified merger, sometimes in a targeted industry. Each SPAC is typically sold at $6 per unit for one share of common stock (to be publicly-traded in the future) and two warrants that can purchase additional shares. If an acquisition is not made in two years, the money is returned to the original investors.
Also known as a "targeted acquisition company (TAC)".
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Special Purpose Vehicle/Entity - SPV/SPE
- 1. Also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets. The SPV is usually a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.
2. A subsidiary corporation designed to serve as a counterparty for swaps and other credit sensitive derivative instruments. Also called a "derivatives product company."
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Special Situation
- Particular circumstances involving a security that would compel investors to trade the security based on the special situation, rather than the underlying fundamentals of the security or some other investment rationale. An investment made due to a special situation is typically an attempt to profit from a change in valuation as a result of the special situation, and is generally not a long-term investment.
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Special Tax Bond
- A type of bond that is repaid by revenues derived from taxation of a particular activity or asset. These bonds are repaid with either excise taxes, special assessment taxes or ad valorem taxes.
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Specialist
- A member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid and ask prices, manages limit orders and executes trades. Specialists are also responsible for managing large movements by trading out of their own inventory. If there is a large shift in demand on the buy or sell side, the specialist will step in and sell out of their inventory to meet the demand until the gap has been narrowed.
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Specialist Firm
- The firms that hire the specialists to represent companies listed on certain exchanges. Companies listed on certain exchanges will interview employees of the specialist firms, seeking out suitable people to represent them by holding inventories of the companies' stocks.
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Specialist Short Sale Ratio
- A ratio comparing the number of short sales made by specialists versus the total number of short sales transacted on the market.
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Specialization
- A method of production where a business or area focuses on the production of a limited scope of products or services in order to gain greater degrees of productive efficiency within the entire system of businesses or areas. Many countries specialize in producing the goods and services that are native to their part of the world. This specialization is the basis of global trade as few countries produce enough goods to be completely self-sufficient.
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Specific Risk
- Risk that affects a very small number of assets. This is sometimes referred to as "unsystematic risk."
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Specific-Shares Method
- A personal financial accounting method that, when used properly, can help reduce capital gains realized for an investor who purchased multiple sets of a stock or mutual fund. In turn, the investor's total tax paid in a given tax year is also reduced. In order to use the specific-shares method, the investor needs to keep careful records - particularly the cost basis - of each stock or mutual fund purchase. Then he/she must provide detailed information on which particular shares are to be sold to the broker managing the investor's account.
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Speculation
- The process of selecting investments with higher risk in order to profit from an anticipated price movement.
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Speculation Index
- A ratio comparing the volume of trades upon the American Stock Exchange and the NYSE.
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Speculative Bubble
- A spike in asset values within a particular industry, commodity, or asset class. A speculative bubble is usually caused by exaggerated expectations of future growth, price appreciation, or other events that could cause an increase in asset values. This drives trading volumes higher, and as more investors rally around the heightened expectation, buyers outnumber sellers, pushing prices beyond what an objective analysis of intrinsic value would suggest.
The bubble is not completed until prices fall back down to normalized levels; this usually involves a period of steep decline in price during which most investors panic and sell out of their investments.
May also be referred to as a "price bubble" or "market bubble".
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Speculative Capital
- The funds earmarked by an investor for the sole purpose of speculation. This capital is often associated with extreme volatility and a high probability of loss. Most speculators have short-term investment horizons and often use high degrees of leverage in their efforts to obtain profits.
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Speculative Company
- A company with a large number of assets tied up in projects with uncertain returns.
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Speculative Flow
- The movement of speculative capital between different assets or areas of the economy. Speculative flow can increase the value of an asset due to increased investor demand.
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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.
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Speculative Stock
- A general term describing a stock with high risk relative to any potential positive returns. Speculative stocks are often purchased by those who believe the stock will appreciate in value without performing a detailed analysis.
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Speculator
- A person who trades derivatives, commodities, bonds, equities or currencies with a higher-than-average risk in return for a higher-than-average profit potential. Speculators take large risks, especially with respect to anticipating future price movements, in the hope of making quick, large gains.
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Speed Resistance Lines
- A tool in technical analysis that is used for determining potential areas of support and resistance. This tool, consisting of three trendlines, is created by drawing the first trendline from the most recent low to the most recent high when the asset is in an uptrend, and from the most recent high to the most recent low when the asset is in a downtrend. The other two trendlines are drawn with smaller angles in an attempt to predict areas that will act as possible barriers in the event of a retracement.
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Spending Phase
- The period in a person's life following retirement in which earning income has come to a stop and the person is living off government subsidy, retirement plans, investments and/or money saved for retirement.
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Spice Trader
- A slang term used to describe an investor who tends to trade in high-risk investment vehicles or markets. Spice traders prefer to invest in riskier endeavors and seek higher risk premiums for the risk that they take on.
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Spiders - SPDR
- A short form of Standard & Poor's depositary receipt, an exchange-traded fund (ETF) managed by State Street Global Advisors that tracks the Standard & Poor's 500 Index (S&P 500). Each share of spider contains one-tenth of the S&P index and trades at roughly one-tenth of the dollar-value level of the S&P 500. Spiders can also refer to the general group of ETFs to which the Standard & Poor's depositary receipt belongs.
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Spike
- 1) The comparatively large upward or downward movement of a price or value level in a short period.
2) The trade order execution confirmation slip which shows all the pertinent data, such as the stock symbol, price, type and trading account information.
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Spillover Dividend
- A special type of dividend where the payment year and the taxable year for it are at different times. Most often this occurs in a situation when the dividend has been declared near the end of the calender year (during the fourth quarter), but the actual distribution date of the dividend payment does not occur until the first quarter of the following year.
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Spinning
- The practice of brokerage houses exchanging IPO shares with top executives for reciprocating business from their companies.
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Spinning Top
- A type of candlestick formation where the real body is small despite a wide range of price movement throughout the trading day. This candle is often regarded as neutral and used to signal indecision about the future direction of the underlying asset.
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Spinoff
- The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A spinoff is a type of divestiture.
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Split Adjusted
- A modification made to a security's price that takes into consideration the effect of a split on the total number of shares or units outstanding, in order to compare the security's current price to its historical price in a consistent form of valuation. In order to adjust a security's price, the post split price would be multiplied by the split ratio (or ratios if multiple splits had occurred) in order to get a split-adjusted price.
While stock prices most often are referred to as split-adjusted, options on underlying split stocks are also split-adjusted by increasing the number of shares covered by the terms of the option. This conversion is done by the same split ratio as the underlying shares, and the strike price is divided by the split ratio.
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Split Block Pricing
- The act of dividing a large order of financial securities into several smaller lots in order to allow each portion to be traded at different prices. The ultimate effect of using a split block pricing method is that the trader will receive the order at a price equaling the weighted average price of each block traded.
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Split Close
- A market closing with price discrepancies within a series of final daily futures-contract transactions.
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Split-Funded Annuity
- A type of annuity that uses a portion of the principal to fund immediate monthly payments and then saves the remaining portion to fund a deferred annuity. The two funding methods let the annuity holder receive dependable income and simultaneously save for future needs.
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Split-Off
- A type of corporate reorganization whereby the stock of a subsidiary is exchanged for shares in a parent company.
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Split-Up
- A corporate action in which a single company splits into two or more separately run companies. Shares of the original company are exchanged for shares in the new companies, with the exact distribution of shares depending on each situation. This is an effective way to break up a company into several independent companies. After a split-up, the original company ceases to exist.
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Spontaneous Assets
- The assets of a company that are accumulated automatically as a result of the firm's day-to-day business. These assets typically grow in proportion with sales. Examples may include increased inventory of goods for sale or accounts receivable.
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Spontaneous Liabilities
- Liabilities of a company that are accumulated automatically as a result of the firm's day-to-day business. Spontaneous liabilities can be tied to changes in sales - such as the cost of goods sold and accounts payable. These liabilities can also be "fixed", as seen with regular payments on long-term debt.
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Spoo
- A slang term for an S&P 500 contract that trades on the Chicago Mercantile Exchange (CME). The S&P 500 contracts trade on the CME independent of the S&P 500 index itself, and expire quarterly in the months of March, June, September and December.
The word originated in the XMI pit on the America Stock Exchange (AMEX) in New York. It comes from the symbol for the September contract: "SPU". Even though the name is based on the September contract symbol, the term is used to describe contracts of all expiries. When somebody speaks of the spoo, they are referring to the current, most active month trading.
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Spoofing
- A type of deception where an intruder attempts to gain unauthorized access to a user’s system or information via pretending to be the user. In email spoofing (or phishing), the user receives an email that appears to be from a legitimate source but actually it is sent by someone else. The main purpose is to trick the user into releasing sensitive information such as passwords, so that the malicious spoofer can continue to pretend to be the user and use his or her accounts.
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Sports Illustrated Swimsuit Issue Indicator
- An indicator based on the nationality of the model on the cover of the Sports Illustrated swimsuit addition that attempts to provide insight on the stock market return for that year. The indicator suggests that when the cover model is from the U.S. the S&P 500 will generate a return above its historical rate while a non-American cover model leads to under performance by the S&P 500 for the year.
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Spot Commodity
- A commodity traded on the spot market. That is, with the expectation of actual delivery, as opposed to a commodity future that is usually not delivered.
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Spot Delivery Month
- Used in commodity trading, this is the nearest of the months currently being traded in which a commodity could be delivered.
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Spot Exchange Rate
- The rate of a foreign-exchange contract for immediate delivery. Also known as "benchmark rates", "straightforward rates" or "outright rates", spot rates represent the price that a buyer expects to pay for a foreign currency in another currency.
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Spot Market
- 1. A commodities or securities market in which goods are sold for cash and delivered immediately. Contracts bought and sold on these markets are immediately effective.
2. A futures transaction for which commodities can be reasonably expected to be delivered in one month or less. Though these goods may be bought and sold at spot prices, the goods in question are traded on a forward physical market.
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Spot Price
- The current price at which a particular commodity can be bought or sold at a specified time and place.
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Spot Rate
- The price that is quoted for immediate settlement on a commodity, a security or a currency . Spot settlement is normally one or two business days from trade date.
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Spot Rate Treasury Curve
- A yield curve constructed using Treasury spot rates, rather then yields. The spot rate Treasury curve can be used as a benchmark for pricing bonds. This type of rate curve can be built from on-the-run treasuries, off-the-run treasuries or a combination of both. Alternatively, the Treasury curve can be calculated by using Treasury coupon strips.
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Spot Secondary
- A secondary distribution made by a company without any additional filings to the SEC.
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Spot Trade
- The purchase or sale of a foreign currency or commodity for immediate delivery. Spot trades are settled "on the spot", as opposed to at a set date in the future. Futures transactions that expire in the current month are also considered spot trades.
Also known as "cash trades".
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Spotting Clues In Qs
- A method of selecting short-selling candidates based on identifying companies that may eventually be recognized for their use of deceptive accounting techniques. The phrase was made popular by Ron Gutfleish and Lee Atzil in the 2004 book "Short Selling: Strategies, Risks and Reward".
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Spousal Beneficiary Rollover
- A transfer of retirement fund assets to the spouse of the deceased. The transfer is generally done in one of two ways. The first way is for the retirement account to remain intact and simply be renamed to reflect the new owner. The second way is to transfer the funds to the spouse's account.
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Spousal IRA
- A Traditional or Roth IRA established and funded by an individual for his or her spouse.
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Spousal Stripping
- An equity-stripping technique used to reduce the equity in a property in order to avoid foreclosure by creditors. Spousal stripping is simply the process of quit-claiming the title of a property to a spouse in order to transfer ownership and protect the asset.
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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.
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Spread Betting
- A type of speculation that involves taking a bet on the price movement of a security. A spread betting company quotes two prices, the bid and offer price (also called the spread), and investors bet whether the price of the underlying stock will be lower than the bid or higher than the offer. The investor does not own the underlying stock in spread betting, they simply speculate on the price movement of the stock.
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Spread Option
- A type of option that derives its value from the difference between the prices of two or more assets. Spread options can be written on all types of financial products including equities, bonds and currencies. This type of position can be purchased on large exchanges, but is primarily traded in the over-the-counter market.
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Spread To Worst
- The difference in overall returns between two different classes of securities, or returns from the same class, but different representative securities. The spread to worst measures the difference from the worst performing security to the best, and can be seen as a measure of dispersion of returns within a given market or between markets. The spread to worst can vary significantly depending on different market and economic variables.
Calculated as:
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Spread-Load Contractual Plan
- A fee-payment structure applicable to mutual funds in which the sales charge or commission (load) is not entirely paid at the time the investor first contributes funds to the mutual fund (or in the first several contributions either). Instead, the mutual fund load is dispersed across an extended time period, so that the load is more accurately applied to each contribution.
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Spreadlock
- An agreement that fixes the spread between the forward price of an interest rate swap and its underlying government bond yield.
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Spring Loading
- An option-granting practice in which options are granted at a time that precedes a positive news event. Spring loading relies on the fact that positive news typically causes the underlying company's stock to surge in value. Timing an option grant to precede the public news release provides the option holder with an almost instant profit.
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Sprinkling Provision
- A provision within a life insurance agreement that allows the trustee of the policy to spread the death benefit around to the beneficiaries at his or her discretion. The sprinkling provision gives the beneficiaries who are in greater need of the funds the opportunity to receive a greater portion of the payout than if the funds were divided equally.
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Spurious Correlation
- A false presumption that two variables are correlated when in reality they are not. Spurious correlation is often a result of a third factor that is not apparent at the time of examination. Spurious comes from the Latin word spurious, which means illegitimate or false.
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Squawk Box
- An intercom speaker often used on brokers' trading desks in investment banks and stock brokerages. A squawk box allows a firm's analysts and traders to communicate with the firm's brokers.
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Squeeze
- 1. In financial terms, a period of time when borrowing is difficult.
2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "squeeze" on profit margins.
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SRD (Suriname Dollar)
- The currency abbreviation for the Suriname dollar (SRD), the currency for Suriname. The Suriname dollar is made up of 100 cents and is presented with the symbol $. The coins of this currency are denominated in cents based on the previous currency, the guilder, which was also made up of 100 cents.
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SSE Composite
- A market composite made up of all the A-shares and B-shares that trade on the Shanghai Stock Exchange. The index is calculated by using a base period of 100; the first day of reporting was July 15, 1991.
The composite figure can be calculated by using the formula:
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Stabilization Policy
- A macroeconomic strategy enacted by governments and central banks to keep economic growth stable, along with price levels and unemployment. Ongoing stabilization policy includes monitoring the business cycle and adjusting benchmark interest rates to control aggregate demand in the economy. The goal is to avoid erratic changes in total output, as measured by Gross Domestic Product (GDP) and large changes in inflation; stabilization of these factors generally leads to moderate changes in the employment rate as well.
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Stabilizing Bid
- A practice used by underwriters to stabilize the secondary market price of a security after an initial public offering (IPO). The bid is made on behalf of the IPO's underwriters to repurchase shares at the offer price.
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Stable Value Fund
- An investment vehicle found in both company retirement plans and, quite recently, IRA accounts. Stable value funds are comprised of mostly 'synthetic GICs' (known also as wrapped bonds) because of their inherent stability. These bonds can be short or intermediate term with longer maturities than other choices such as money market funds. They are paired (or wrapped) with insurance contracts to guarantee a specific minimum return.
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Stag
- A slang term for short-term speculator.
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Stagflation
- A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.
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Stagger System
- A method of electing a company's board of directors that puts up only part of the board for re-election in any one year. This method contrasts the system in which all board members go up for re-election annually.
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Stagnation
- A period of little or no growth in the economy. Economic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities.
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Stakeholder
- One who has a share or an interest in an enterprise.
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Stalking-Horse Bid
- An initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid.
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Stalwart
- A description of companies that have large capitalizations and provide investors with slow but steady and dependable growth prospects.
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Stamp Duty
- An ad valorem or flat rate charged on certain documents.
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Standalone Profit
- The profit associated with the operation of a single project or division of a firm. When measuring standalone profit, values are only included if they are directly generated from the activities of the project or firm.
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Standalone Risk
- The risk associated with a single operating unit of a company or asset. Standalone involves the risks created by a specific division or project, which would not exist if operations in that area were to cease.
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Standard & Poor's - S&P
- A financial services company that rates stocks and corporate and municipal bonds according to risk profiles.
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Standard & Poor's 500 Index - S&P 500
- An index 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 is proportionate to its market value.
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Standard And Poor's CNX Nifty
- A stock index endorsed by Standard & Poor's and composed of 50 of the largest and most liquid stocks found on the National Stock Exchange (NSE) of India. It is commonly used to represent the market for benchmarking Indian investments. Similar to other major stock indexes like the S&P 500, companies must meet certain requirements in terms of market capitalization and liquidity before they can be considered for inclusion in the index.
Also known as "Nifty 50".
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Standard Deduction
- A base amount of income that is not subject to tax and that can be used to reduce a taxpayer's adjusted gross income (AGI). A standard deduction can only be used if the taxpayer does not choose the itemized deduction method of calculating taxable income. The amount of the standard deduction is based on a taxpayer's filing status, age and whether he or she is disabled or claimed as a dependent on someone else's tax return.
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Standard Deviation
- 1. A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of variance.
2. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility.
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Standard Industrial Classification - SIC Code
- A standard series of four-digit codes created by the U.S. government in 1937 for categorizing business activities. In 1997, the use of SIC codes was replaced in most (but not all) capacities by a six-digit code called the North American Industry Classification System (NAICS).
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Standard Mileage Rate
- A set rate the IRS allows for each mile driven by the taxpayer for business, charitable, medical or moving purposes. The standard mileage rate can be taken in lieu of actual expenses incurred when calculating deductible automobile expenses related to any of the four activities above.
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Standard Of Living
- The level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area. The standard of living includes factors such as income, quality and availability of employment, class disparity, poverty rate, quality and affordability of housing, hours of work required to purchase necessities, gross domestic product, inflation rate, number of vacation days per year, affordable (or free) access to quality healthcare, quality and availability of education, life expectancy, incidence of disease, cost of goods and services, infrastructure, national economic growth, economic and political stability, political and religious freedom, environmental quality, climate and safety. The standard of living is closely related to quality of life.
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Standard Of Living Bubble
- The concept of consumers living beyond their means for an extended period of time. The notion of a standard of living bubble is characterized by flat inflation-adjusted earnings for members of the workforce over several years, during which the use of consumer credit and spending increases in order to provide the illusion of increases in standard of living.
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Standard Poor's Underlying Rating - SPURs
- A measurement tool prepared by Standard and Poor's for a more in depth rating of Municipal Bonds.
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Standardization
- A framework of agreements to which all relevant parties in an industry or organization must adhere to ensure that all processes associated with the creation of a good or performance of a service are performed within set guidelines. This is done to ensure the end product has consistent quality, and that any conclusions made are comparable with all other equivalent items in the same class.
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Standby Letter of Credit - SLOC
- A guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort" should the client fail to fulfill a contractual commitment with a third party. Standby letters of credit are created as a sign of good faith in business transactions, and are proof of a buyer's credit quality and repayment abilities. The bank issuing the SLOC will perform brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then send notification to the bank of the party requesting the letter of credit (typically a seller or creditor).
Also known as a "non-performing letter of credit".
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Standby Underwriting (Standby)
- A type of underwriting in which an investment bank (the underwriter) agrees to purchase the portion of the new securities issue that remains after a public offering.
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Standstill Agreement
- 1. A contract that stalls or stops the process of a hostile takeover. The target firm either offers to repurchase the shares held by the hostile bidder, usually at a large premium, or asks the bidder to limit its holdings. This act will stop the current attack and give the company time to take preventative measures against future takeovers.
2. An agreement between a lender and borrower in which the lender stops demanding the repayment of the loan. A new deal is negotiated, usually altering the loan's original repayment schedule. This is used as an alternative to bankruptcy or foreclosure when the borrower can't repay the loan.
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Stanford Graduate School of Business
- One of the leading business schools in America, located at Stanford University in Stanford, California. The Stanford Graduate School of Business was founded in 1925 and has one of the highest ratio of applicants to available seats of any business school in the U.S. The school regularly accepts less than 10% of applicants in any given application period.
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Staple Financing
- A pre-arranged financing package offered to potential bidders in an acquisition. Staple financing is arranged by the investment bank advising the selling company and includes all details of the lending package, including the principal, fees and loan covenants. The name is derived from the fact that the financing details are stapled to the back of the acquisition term sheet.
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Star
- 1. A type of candlestick formation that is identified when a small bodied-candle is positioned above the price range of the previous candle as a result of a gap in the underlying assets price.
2. One of the four categories (quadrants) of the BCG growth-share matrix that represents the division within a company that has a large market share in a rapidly expanding industry.
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Starbucks Index
- A representation of purchasing power parity published by The Economist that determines what a country's exchange rate would need to be in order for a Starbucks tall latte to cost the same as it does in the United States. Using this index, the purchasing power of each individual national currency can be reflected in the U.S.-dollar cost of a latte in that country.
This can also be referred to as the "tall latte index."
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STARC Bands
- A type of technical indicator that is created by plotting two bands around a short-term simple moving average (SMA) of an underlying asset's price. The upper band is created by adding a value of the average true range (ATR) - a popular indicator used by technical traders - to the moving average. The lower band is created by subtracting a value of the ATR from the SMA.
Upper STARC band = SMA + ATR*
Lower STARC band = SMA - ATR*
* The average true range (ATR) is generally multiplied by a user-specific multiplier factor before being added/subtracted from the SMA.
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Startup
- A company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists.
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State Administrator
- An entity governing the rules and regulations set forth in the state-level Uniform Securities Act.
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State Guaranty Fund
- A fund administered by a U.S. state to protect policy holders in the event that an insurance company defaults on benefit payments or becomes insolvent. The fund only protects beneficiaries of insurance companies that are licensed to sell insurance products in that state.
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State Income Tax
- Tax levied on income at the state level. State income taxes have their own set of deductions and credits that may be awarded for certain activities, such as contributing to a state-sponsored 529 plan. Taxpayers who itemized deductions on their federal returns may deduct state taxes paid on Schedule A.
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State Street Investor Confidence Index
- An index that measures investor confidence by looking at actual levels of risk taken by investors in their portfolios. The State Street Investor Confidence Index reports on the second-last Tuesday of each month, using data it collected at the close of trading on the previous Wednesday. It was codeveloped by Harvard professor Ken Froot and State Street associate director Paul O'Connell.
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State-Owned Enterprise - SOE
- A legal entity that is created by the government in order to partake in commercial activities on the government's behalf. A state-owned enterprise (SOE) can be either wholly or partially owned by a government and is typically earmarked to participate in commercial activities.
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Stated Annual Interest Rate
- The annual rate of interest that does not account for compounding occurring within the year.
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Stated Income / Stated Asset Mortgage - SISA
- A type of reduced documentation mortgage program which allows the borrower to state on the loan application what their income and assets are without verification by the lender; however, the source of the income is still verified.
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Stated Value
- A value that, instead of being par value, is assigned to a corporation's stock for accounting purposes. Stated value has no relation to market price.
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Statement of Additional Information - SAI
- A supplementary document to a mutual fund's prospectus that contains additional information about the fund and includes further disclosure regarding its operations. Also, known as "Part B" of the fund's registration statement.
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Statement of Financial Accounting Concepts - SFAC
- A document issued by the Financial Accounting Standards Board (FASB) covering broad financial reporting concepts. The purpose of the SFAC document is to provide a general overview of accounting concepts, definitions and ideas. It is seen as a prelude to the statement of financial accounting standards.
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Statement of Financial Accounting Standards - SFAS
- A formal document issued by the Financial Accounting Standards Board (FASB), which details accounting standards and guidance on selected accounting policies set out by the FASB. These statements of financial accounting standards are issued, with the expectation that all reporting companies listed on American stock exchanges will adhere to them. The standards are created to ensure a higher level of corporate transparency.
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Statement Of Retained Earnings
- A financial statement outlining the changes in retained earnings for a specified period. The statement of retained earnings is prepared in accordance with generally accepted accounting principles (GAAP). The statement of retained earnings reconciles the beginning and ending retained earnings for the period, using information such as net income from the other financial statements.
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Statement Shock
- The shock associated with opening an investment statement and seeing that the value of your portfolio has dropped more than expected. Statement shock most commonly occurs as a result of an unexpected drop in value, but it can also be caused by lower-than-expected returns.
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Static Budget
- A type of budget that incorporates anticipated values about inputs and outputs that are conceived before the period in question begins. When compared to the actual results that are received after the fact, the numbers from static budgets are often quite different from the actual results.
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Static Gap
- A measure of exposure or sensitivity to interest rates. Static gap is calculated as the difference between assets and liabilities of comparable repricing periods. Static gap can be calculated for short-term and long-term periods. Minus signs in the calculated gap indicate that you have a greater number of liabilities than assets maturing at that particular maturity, and therefore have an exposure to rising rates.
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Static Spread
- The constant yield spread which when added to the point on the spot rate Treasury curve where a cash flow from a bond is received will make the price of the bond equal to the present value of its cash flows. In other words, each cash flow is discounted at the appropriate Treasury spot rate plus the static spread. The static spread is also known as a zero-volatility or Z-spread.
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Statistical Arbitrage
- A profit situation arising from pricing inefficiencies between securities. Investors identify the arbitrage situation through mathematical modeling techniques.
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Statistically Significant
- The likelihood that a result or relationship is caused by something other than mere random chance. Statistical hypothesis testing is traditionally employed to determine if a result is statistically significant or not. This provides a "p-value" representing the probability that random chance could explain the result. In general, a 5% or lower p-value is considered to be statistically significant.
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Statistics
- A type of mathematical analysis involving the use of quantified representations, models and summaries for a given set of empirical data or real world observations. Statistical analysis involves the process of collecting and analyzing data and then summarizing the data into a numerical form.
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Statutory Accounting Principles - SAP
- A set of accounting regulations prescribed by the National Association of Insurance Commissioners for the preparation of an insuring firm's financial statements.
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Statutory Employee
- A class of employee that is permitted to deduct work-related expenses on Schedule C instead of Schedule A. Statutory employees are usually salespeople or other employees who work on commission.
Statutory employees are independent contractors under the IRS's common-law rules.
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Statutory Voting
- The procedure of voting for a company's directors in which each shareholder is entitled to one vote per share. This is sometimes known as straight voting.
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Staycation
- A vacation spent at or near your own home, rather than traveling to another location. People take staycations for many reasons, including but not limited to, saving money, avoiding travel, and taking advantage of and enjoying what is available in their own city.
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STD (Sao Tome & Principe Dobra)
- The currency abbreviation for the São Tomé & Príncipe dobra (STD), the currency for São Tomé & Príncipe. The São Tomé & Príncipe dobra is often presented with the symbol Db, and is made up of 100 cêntimos, although inflation has made cêntimos virtually worthless.
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Stem The Tide
- An attempt to stop a prevailing trend. Sometimes referred to as "stop the bleeding."
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Step-out Trading
- When a brokerage firm executes an order, but gives other firms credit and some of the commission for the trade.
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Step-Up Bond
- A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.
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Step-Up In Basis
- The readjustment of the value of an appreciated asset for tax purposes upon inheritance. With a step-up in basis, the value of the asset is determined to be the higher market value of the asset at the time of inheritance, not the value at which the original party purchased the asset.
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Sterile Investment
- An investment that does not provide dividends or interest to the investor. In a sterile investment, the return is generated completely by capital gains.
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Sterilization
- A form of monetary action in which a central bank or federal reserve attempts to insulate itself from the foreign exchange market to counteract the effects of a changing monetary base. The sterilization process is used to manipulate the value of one domestic currency relative to another, and is initiated in the forex market.
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Sterilized Intervention
- A method used by monetary authorities to equalize the effects of foreign exchange transactions on the domestic monetary base by offsetting the purchase or sale of domestic assets within the domestic markets. The process limits the amount of domestic currency available for foreign exchange.
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Sterling Overnight Interbank Average Rate - SONIA
- An index that the tracks Sterling overnight funding rates for trades that occur in off hours. The Sterling overnight funding rate is a reflection of the depth of the overnight business in the market.
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Sterling Ratio
- A ratio used mainly in the context of hedge funds. This risk-reward measure determines which hedge funds have the highest returns while enduring the least amount of volatility. The formula is as follows:
This formula uses the average for risk (drawdown) and return over the past three years. Drawdown is calculated at the maximum potential loss in the given year.
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Stewardship Grade
- An evaluative data point in Morningstar's fund and stock reports that assesses the quality of a company's governance practices. Stewardship grades for both funds and stocks range from 'A' (excellent) to 'F' (very poor) based on criteria that measures the effectiveness of fund and corporate managers to consistently act with their shareholders' best interests in mind.
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Sticky Deal
- An issue of new securities that may present a selling challenge to an underwriter, usually because there's been some bad news about the issuing company or overall economy.
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Sticky-Down
- A figure that can move higher relatively easily, but only will go down with pronounced effort. The existence of sticky-down prices has been proved by numerous modern-day economic studies, and usually it involves the economic input costs that go into producing a particular good or service.
Sticky-down is an extension of "price stickiness".
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STIR Futures & Options
- An acronym standing for "short-term interest rate" options or futures contract.
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STIX
- A short-term trading oscillator that compares the amount of volume flowing into advancing and declining stocks.
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Stochastic Modeling
- A method of financial modeling in which one or more variables within the model are random. Stochastic modeling is for the purpose of estimating the probability of outcomes within a forecast to predict what conditions might be like under different situations. The random variables are usually constrained by historical data, such as past market returns.
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Stochastic Oscillator
- A technical momentum indicator that compares a security's closing price to its price range over a given time period. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. This indicator is calculated with the following formula:
%K = 100[(C - L14)/(H14 - L14)]
C = the most recent closing price
L14 = the low of the 14 previous trading sessions
H14 = the highest price traded during the same 14-day period.
%D = 3-period moving average of %K
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StochRSI
- An indicator used in technical analysis that ranges between zero and one and is created by applying the Stochastic Oscillator formula to a set of Relative Strength Index (RSI) values rather than standard price data. Using RSI values within the Stochastic formula gives traders an idea of whether the current RSI value is overbought or oversold - a measure that becomes specifically useful when the RSI value is confined between its signal levels of 20 and 80.
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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".
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Stock Ahead
- A situation in which an order is placed, but not executed, because of a previously sent order involving the same price. Depending on the exchange's priority rules, this can also happen when two bids are made at the same time with identical prices; only the larger order will be executed.
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Stock And Warrant Off-Balance Sheet R&D - SWORD
- A financing option developed to help biotechnology companies access capital that could be used to finance new or ongoing research and development projects by establishing a separate entity. The financing received through outside investors gives the biotechnology company the needed capital in exchange for giving the investors partial rights to the outcomes of the R&D projects they are funding.
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Stock Appreciation Right - SAR
- A right, usually granted to an employee, to receive a bonus equal to the appreciation in the company's stock over a specified period. Like employee stock options, SARs benefit the holder with an increase in stock price; the difference is that the employee is not required to pay the exercise price (as with an employee stock option), but rather just receives the amount of the increase in cash or stock.
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Stock Basher
- An individual, either acting alone or on behalf of someone else, who attempts to devalue a stock by spreading false or exaggerated claims against a public company. After the stock's price has dropped, the basher, or the basher's employer, will then purchase the stock at a lower price than what he or she believes it is intrinsically worth.
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Stock Certificate
- The physical piece of paper representing ownership in a company.
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Stock Compensation
- The payment of stock in lieu of cash for services provided.
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Stock Cycle
- The evolution of a stock's price from an early uptrend to a price high and eventually to a downtrend. The stock cycle is a buy-and-sell cycle that occurs over several years and has four stages:
1. Accumulation
2. Markup
3. Distribution
4. Markdown
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Stock Dividend
- A dividend payment made in the form of additional shares, rather than a cash payout.
Also known as a "scrip dividend."
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Stock Exchange Daily Official List - SEDOL
- An identification code, consisting of seven alphanumeric characters, that is assigned to all securities trading on the London Stock Exchange and on other smaller exchanges in the U.K.
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Stock Exchange of Thailand (SET) .BK
- The securities trading center in Thailand. Along with its regulator, Thailand's own Securities and Exchange Commission, the SET is designed to encourage public investment in local industries through information dissemination, investor education, securities listing and trading, and oversight of listed companies. Opened in 1975 as the Securities Exchange of Thailand under legislation passed in 1974, its name changed to the Stock Exchange of Thailand in 1991.
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Stock Idea
- A note of suggestion or thinking that initiates the further analysis of a potential investment. Stock ideas can be thought of when news comes across the wire, or when the suggestion is heard from another analyst or investor.
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Stock Jobbing
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Stock Keeping Unit - SKU
- A store's or catalog's product and service identification code, often portrayed as a machine-readable bar code that helps the item to be tracked for inventory. A stock keeping unit (SKU) does not need to be assigned to physical products in inventory. Often, SKUs are applied to intangible, but billable products, such as units of repair time or warranties. For this reason, a SKU can be thought of as a code assigned to a supplier's billable entities.
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Stock Market
- The market in which shares are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance.
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Stock Market Capitalization To GDP Ratio
- A ratio used to determine whether an overall market is undervalued or overvalued. The ratio can be used to focus on specific markets, such as the U.S. market, or it can be applied to the world market depending on what values are used in the calculation.
Calculated as:
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Stock Market Crash Of 1929
- A severe downturn in equity prices that occurred in October of 1929 in the United States, and which marked the end of the "Roaring Twenties." The crash of 1929 did not occur in one day, but was spread out over a two-week period beginning in mid-October.
The first portion of the crash occurred on October 24, a day known as Black Thursday. The following week brought Black Monday (Oct. 28) and Black Tuesday (Oct. 29) – the Dow Jones Industrial Average fell more than 20% over those two days. Pre-existing selling pressures and fear in the stock market were exasperated by a flood of sell orders that shut down the ticker-tape service that provided stock prices to traders. With key information missing from the markets, selling intensified even further.
Despite a few attempts at recovery, the stock market continued to languish, eventually falling almost 90% from its peak in 1929.
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Stock Market Crash Of 1987
- A rapid and severe downturn in stock prices that occurred in late October of 1987. After five days of intensifying stock market declines, selling pressure hit a peak on October 19, known as Black Monday. The Dow Jones Industrial Average (DJIA) fell a record 22% on that day alone, with many stocks halted during the day as order imbalances prevented true price discovery.
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Stock Option
- A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period or on a specific date.
In the U.K., it is known as a "share option".
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Stock Participation Accreting Redemption Quarterly-Pay Securities - SPARQS
- A callable note that pays interest to the holder, and upon maturity is exchanged for shares in the underlying company. These investment products are issued and underwritten by Morgan Stanley and provide investors with both interest payments and exposure to the stock market.
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Stock Pick
- A situation in which an analyst or investor uses a systematic form of analysis to conclude that a particular stock will make a good investment and, therefore, should be added to his or her portfolio. The position can be either long or short and will depend on the analyst or investor's outlook for the particular stock's price.
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Stock Power
- A power of attorney that allows the current owner of a registered security to transfer ownership to another party.
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Stock Quote
- A list of prices (generally bid, ask and last) for a stock at a particular point during the trading day. Stocks used to be quoted in fractions, but now most exchanges use decimals.
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Stock Record
- A system that helps brokerage firms keep track of the position and physical location of the securities they are holding.
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Stock Replacement Strategy
- An investment strategy that attempts to mimic the returns of a certain asset or group of assets by using a combination of different derivatives rather than buying the individual shares in the market. Traders will attempt to profit from the leverage found in options and futures because they can provide the same type of exposure to the underlying asset for a lower cost than if the trader were to buy the underlying assets outright.
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Stock Savings Plan
- In Canada, a plan wherein some provinces will provide a tax credit for provincial income taxes to residents who spend their income on certain investments.
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Stock Screener
- A tool investors can use to filter stocks given certain criteria of their choice.
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Stock Split
- A corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.
In the U.K., a stock split is referred to as a "scrip issue", "bonus issue", "capitalization issue" or "free issue".
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Stock Symbol
- A unique series of letters assigned to a security for trading purposes. NYSE and AMEX listed stocks have three characters or less. Nasdaq-listed securities have four or five characters. If a fifth letter appears, it identifies the security as other than a single issue of common stock. They are also known as "ticker symbols".
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Stock Watcher
- A computer program used by the NYSE that continuously monitors all trading activity in order to detect any illegal trades.
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Stock-For-Stock
- 1. In the context of mergers and acquisitions, the exchange of an acquiring company's stock for the stock of the acquired company at a predetermined rate. Usually, only a portion of a merger is completed with a stock-for-stock transaction, with the rest of the expenses being covered with cash or other payment methods.
2. A method of satisfying the option price in an employee stock option compensation scheme. Under these compensation programs, employees are granted stock options but must pay the company the option price before they are given the grant. By exchanging mature stock (stock that has been held for a required holding period), the grantee can receive his/her options without having to pay for them. After a given time period, grantees are given back the stock they used to pay for their options.
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Stockbroker
- 1. An agent that charges a fee or commission for executing buy and sell orders submitted by an investor.
2. The firm that acts as an agent for a customer, charging the customer a commission for its services.
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Stockholders' Equity
- The portion of the balance sheet that represents the capital received from investors in exchange for stock (paid-in capital), donated capital and retained earnings. Stockholders' equity represents the equity stake currently held on the books by a firm's equity investors.
It is calculated either as a firm's total assets minus its total liabilities, or as share capital plus retained earnings minus treasury shares:
Also known as "shareholders' equity".
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Stockholm Interbank Offered Rate - STIBOR
- The official interbank offer rate for short term loans in Sweden. The Stockholm Interbank Offer Rate is determined by the Riksbank, Sweden's central bank, and is often used for one or three month terms. STIBOR is the interest rate banks are charged when borrowing from other banks for maturities longer than overnight.
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Stockholm Stock Exchange (STO) .ST
- The main securities market in Sweden, the Stockholm Stock Exchange was founded in 1863. In 1997, it joined the NOREX alliance, a group that also includes the stock exchanges of Oslo, Copenhagen and Iceland, as part of an effort for the Nordic exchanges to attract greater international investment through a common trading platform and streamlined regulations.
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Stop Hunting
- A strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set their stop-loss orders. The triggering of many stop losses generally leads to high volatility and can present a unique opportunity for investors who seek to trade in this environment.
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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".
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Stop Payment
- When a bank account holder instructs his or her financial institution not to honor payment.
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Stop-Limit Order
- An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
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Stop-Loss Order
- An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position.
Also known as a "stop order" or "stop-market order".
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Stopped Order
- A market order on the NYSE that is stopped from being executed by the specialist because of a request from a member firm to obtain a better price than that available. According to NYSE rules, once the order is stopped, it must be identified and the specialist must guarantee the market price at the time of the stop should they be unsuccessful in obtaining a better price.
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Stopped Out
- A situation where a stock price decreases and, consequently, an investor's stop order is executed.
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Store Of Value
- Any form of commodity, asset, or money that has value and can be stored and retrieved over time. Possessing a store of value is an underlying basis for any economic system, as some medium is necessary for a store of value in order for individuals to engage in the exchange of goods and services. As long as a currency is relatively stable in its value, money (such as a dollar bill) is the most common and efficient store of value found in an economy.
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Story Stock
- A stock whose value is a reflection of expected future potential (or favorable press coverage) rather than its assets and income.
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STOXX
- A series of market indexes that are representative of the European and global markets. These indexes cover a wide range of market segments including the broad market, blue chips, individual sectors and global indexes. While there are global STOXX indexes, the majority of the focus is placed on the European market.
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Straddle
- An options strategy with which the investor holds a position in both a call and put with the same strike price and expiration date.
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Straight Bond
- A bond that pays interest at regular intervals, and at maturity pays back the principal that was originally invested. Straight bonds are debt instruments because they are essentially loaning money (creating debt) to an entity. The entity (government, municipality, or organization) promises to pay the interest on the "debt" and at maturity pay back the original loan.
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Straight Life Annuity
- An insurance product that makes periodic payments to the annuitant until his or her death, at which point the payments stop completely. These products do not allow annuitants to designate a beneficiary. Straight life annuities may be bought over the course of the annuitant's working life by making periodic payments into the annuity, or they may be purchased with a single lump sum payment. Usually, lump sum purchases are made at, or shortly after, the annuitant's retirement.
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Straight Line Basis
- A method of computing amortization (depreciation) by dividing the difference between an asset's cost and its expected salvage value by the number of years it is expected to be used.
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Straight Through Processing - STP
- An initiative used by companies in the financial world to optimize the speed at which transactions are processed. This is performed by allowing information that has been electronically entered to be transfered from one party to another in the settlement process without manually re-entering the same pieces of information repeatedly over the entire sequence of events.
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Strangle
- An options strategy where the investor holds a position in both a call and put with different strike prices but with the same maturity and underlying asset. This option strategy is profitable only if there are large movements in the price of the underlying asset.
This is a good strategy if you think there will be a large price movement in the near future but are unsure of which way that price movement will be.
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Strap
- An options strategy created by being long in one put and two call options, all with the exact same strike price, maturity and underlying asset. Also referred to as a "triple option".
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Strategic Alliance
- An arrangement between two companies who have decided to share resources in a specific project.
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Strategic Asset Allocation
- A portfolio strategy that involves periodically rebalancing the portfolio in order to maintain a long-term goal for asset allocation.
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Strategic Buyer
- A type of buyer in an acquisition that has a specific reason for wanting to purchase the company. Strategic buyers look for companies that will create a synergy with their existing businesses.
Because strategic buyers may actually get more value out of an acquisition than the intrinsic value of the company being acquired, strategic buyers will usually be willing to pay a premium price in order to have the deal go through.
Also known as synergistic buyers.
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Stratified Random Sampling
- A method of sampling, which involves the division of a population into smaller groups, known as strata. In stratified random sampling, the strata are formed based on their members sharing a specific attribute or characteristic. A random sample from each stratum is taken, in a number proportional to the stratum's size when compared to the population. These subsets of the strata are then pooled to form a random sample.
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Street Book
- A record of futures-contract transactions that is maintained daily by futures commission merchants and clearing houses.
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Street Expectation
- The average earnings estimates made by brokers and securities analysts.
Also known as the "market consensus" or "earnings expectations".
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Street Name
- When securities are held in the name of a broker or other nominee, as opposed to holding them in the customer's name.
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Streetable
- A company that has a management team with enough strength and experience to run a public company. It's imperative for Wall Street to have confidence in a company's management - otherwise it will be difficult, if not impossible, for that company to go public.
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Stress Testing
- A simulation technique used on asset and liability portfolios to determine their reactions to different financial situations. Stress tests are also used to gauge how certain stressors will affect a company or industry. They are usually computer-generated simulation models that test hypothetical scenarios.
This is also known as a "stress test".
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Stretch Annuity
- An annuity option where tax-deferred allowances are passed on to the beneficiaries, offering the beneficiaries more flexibility and control over maintaining the investment. Therefore, the beneficiary has less restraints on wealth transfer, and he or she is able to receive a larger sum of benefits stretched over a longer period of time.
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Stretch Loan
- A loan that is extended to another party, either an individual or subsidiary company, that requires a large proportion of the party's cash flows to service the loan on a monthly basis. Usually, this benchmark is 50% of the party's gross income or more.
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Strike Price
- The price at which a specific derivative contract can be exercised. Strike prices is mostly used to describe stock and index options, in which strike prices are fixed in the contract. For call options, the strike price is where the security can be bought (up to the expiration date), while for put options the strike price is the price at which shares can be sold.
The difference between the underlying security's current market price and the option's strike price represents the amount of profit per share gained upon the exercise or the sale of the option. This is true for options that are in the money; the maximum amount that can be lost is the premium paid.
Also known as the "exercise price".
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Strip
- 1. For bonds, the process of removing coupons from a bond and then selling the separate parts as a zero coupon bond and interest paying coupons. Also known as a stripped bond or zero coupon bond.
2. In options, a strategy created by being long in one call and two put options, all with the exact same strike price.
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Strip Bond
- A bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond."
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Stripped Yield
- The implied sovereign yield of a bond, or the theoretical yield of the non-collateralized portion of a bond.
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Stripper
- Slang for an individual homeowner who strips the equity out of his or her home through mortgage refinancing. The proceeds are generally not re-invested, but spent on consumer goods.
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Strong Buy
- A type of stock purchasing recommendation given by analysts for a stock that is expected to dramatically outperform the average market return and/or the return of comparable stocks in the same sector or industry. It is an analyst's emphatic endorsement of a stock.
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Strong Form Efficiency
- The strongest version of market efficiency. It states all information in a market, whether public or private, is accounted for in a stock price. Not even insider information could give an investor the advantage.
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Strong Hands
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Strong Sell
- A type of stock trading recommendation given by analysts for a stock that is expected to dramatically underperform compared to the average market return and/or return of comparable stocks in the same sector or industry. It is an emphatic negative comment on a stock's prospects.
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Structural Change
- An economic condition that occurs when an industry or market changes how it functions or operates. A structural change will shift the parameters of an entity, which can be represented by significant changes in time series data.
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Structural Pivot
- A price-bar formation that gives real-time price signals of support and resistance. When a series of price bars reverses direction, it is considered a structural pivot (not a calculated pivot).
The price bar has an open, high, low and close. The pivot is composed of a minimum of three bars and occurs in every time frame. The pivot lows and highs are used to draw trendlines to show support, resistance and trend direction.
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Structural Unemployment
- Unemployment resulting from changes in the basic composition of the economy. These changes simultaneously open new positions for trained workers.
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Structured Finance
- A service offered by many large financial institutions for companies with very unique financing needs. These financing needs usually don't match conventional financial products such as a loan. Structured finance generally involves highly complex financial transactions.
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Structured Funds
- A fund that combines both equity and fixed-income products to provide investors with a degree of both capital protection and capital appreciation. These funds use fixed-income securities to give the fund capital protection through principal repayment along with the added gain of interest payments. The fund uses options, futures and other derivatives, which are often based on market indexes, to provide exposure to capital appreciation.
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Structured Investment Products - SIPS
- A type of investment specifically designed to meet an investor's financial needs by customizing the product mix to adhere to the investor's risk tolerance. SIPs are generally created by varying the amount of exposure to risky investments and often include the use of various derivatives.
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Structured Investment Vehicle - SIV
- A pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset-backed securities (ABS). Funding for SIVs comes from the issuance of commercial paper that is continuously renewed or rolled over; the proceeds are then invested in longer maturity assets that have less liquidity but pay higher yields. The SIV earns profits on the spread between incoming cash flows (principal and interest payments on ABS) and the high-rated commercial paper that it issues. SIVs often employ great amounts of leverage to generate returns.
Also known as "conduits".
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Structured Note
- A debt obligation that also contains an embedded derivative component with characteristics that adjust the security's risk/return profile. The return performance of a structured note will track that of the underlying debt obligation and the derivative embedded within it.
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Structured Yield Product Exchangeable For Stock - STRYPES
- A type of convertible bond issued by companies that pays a quarterly cash coupon and can also be exchanged for a certain number of shares or receive the cash equivalent at maturity. STRYPES were created and trademarked by Merrill Lynch, and are traded on major exchanges.
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Stub
- Stock in a company that is over-leveraged as a result of recapitalization.
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Stuckholder
- The owner of a stock that can't be sold. The term stuckholder has a negative connotation, usually because the value of the stock is dropping and circumstances prevent the owner from liquidating the position.
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Student Loan Interest Deduction
- An adjustment to an individual's income for any interest paid on higher education loans during the tax year.
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Stuttgart Stock Exchange (STU) .SG
- Germany's second-largest securities market (after the Frankfurt Stock Exchange), the Stuttgart Stock Exchange (in German, Böerse Stuttgart) handles around 40% of all securities trades in the country. Established in 1860, the Exchange trades in equities, bonds, investment funds and participation certificates.
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Stutzer Index
- A performance measure that rewards portfolios with a lower probability of underperforming a benchmark. Technically, the Stutzer index penalizes negative skewness and high kurtosis - such a distribution will have a lower Stutzer index than a normal distribution with the same mean and variance.
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Style
- The investment approach or objective that a fund manager uses to make choices in the selection of securities for the fund's portfolio. While there are a variety of styles, there are nine basic investing styles for both equity and fixed-income funds. For stock funds, company size and value/growth characteristics determine the style. For bonds, style is defined by maturities and credit quality.
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Style Analysis
- The process of determining what type of investment behavior an investor or money manager employs when making investment decisions. Virtually all investors subscribe to a form of investment philosophy, and a prudent analysis of a money manager's style needs to be performed before an investor can determine whether the manager will be good fit for his or her personal investment goals and preferences.
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Style Box
- Created by Morningstar, a style box is designed to visually represent the investment characteristics of fixed-income (bond), domestic equity (stock) and international equity (stock) securities and their respective mutual funds. A style box is a valuable tool for investors to use to determine the asset allocation and risk-return structures of their portfolios and/or how a security fits into their investing criteria. There are slightly different style boxes used for equity and fixed-income funds.
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Style Drift
- The divergence of a mutual fund from its stated investment style or objective. Style drift occurs as a result of intentional portfolio investing decisions by management, a change of the fund's management or, in the case of stocks, a company's growth.
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Sub-Advised Fund
- An atypical fund structure in which a fund, such as a hedge fund or mutual fund, is managed by another management team or firm than where the assets are held. Sub-advised funds are often found in wrap programs or variable annuities.
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Sub-Asset Class
- More specific holdings of a general category of assets. A sub-asset class is a collection of assets that have common characteristics within both the asset class and the sub-asset class. The sub-asset class also has attributes that make it different than the parent group of assets.
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Sub-Sovereign Obligation - SSO
- A form of debt obligation issued by hierarchical tiers below the ultimate governing body of a nation, country, or territory. This form of debt comes from bond issues and is issued by states, provinces, cities or towns in order to fund municipal and local projects.
Also referred to as a "municipal (muni) debt obligation".
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Subchapter S (S Corporation)
- A form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. This gives a corporation with 100 shareholders or less the benefit of incorporation while being taxed as a partnership. This means that any profits earned by the corporation are not taxed at the corporate level, but rather at the level of the shareholders. Also known as "S corporation".
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Subindex
- A group of securities that is part of an index but is also tracked separately as a smaller, separate index.
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Subjective Probability
- A probability derived from an individual's personal judgment about whether a specific outcome is likely to occur. Subjective probabilities contain no formal calculations and only reflect the subject's opinions and past experience.
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Subordinated Debt
- A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings.
Also known as a "junior security" or "subordinated loan".
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Subordination Clause
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Subprime
- A classification of borrowers with a tarnished or limited credit history. Lenders will use a credit scoring system to determine which loans a borrower may qualify for. Subprime loans carry more credit risk, and as such, will carry higher interest rates as well. Approximately 25% of mortgage originations are classified as subprime.
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Subprime Auto Loan
- A type of auto loan approved for people with substandard credit scores or limited credit histories. There is no official cutoff score for prime versus subprime, but it should be noted that these loans carry higher interest rates than equivalent prime loans, and may also come with prepayment penalties if the borrower chooses to pay off the loan early.
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Subprime Credit
- General term for borrowings of subprime debt, or loans made to people with less-than-perfect credit or short credit histories. Subprime credit includes the original borrowing itself, as well as any derivative products such as securitizations that are based on subprime loans and then sold to investors in the secondary markets.
A big portion of the total market for subprime credit is based on subprime mortgages, or home loans to borrowers of questionable creditworthiness.
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Subprime Credit Card
- A type of credit card issued to people with substandard credit scores or limited credit histories. These cards will typically carry much higher interest rates than credit cards granted to prime borrowers; they also come with extra fees and lower credit limits.
Subprime credit cards are issued by both major issuers and smaller financial institutions that focus only on subprime lending.
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Subprime Lender
- A type of lender that specializes in lending to borrowers with a tainted or limited credit history. Subprime lending is more concentrated in a smaller number of large lenders than prime lending. The subprime loan market is more tiered compared to the prime loan market, where terms and rates vary little between borrowers.
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Subprime Loan
- A type of loan that is offered at a rate above prime to individuals who do not qualify for prime rate loans. Quite often, subprime borrowers are often turned away from traditional lenders because of their low credit ratings or other factors that suggest that they have a reasonable chance of defaulting on the debt repayment.
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Subprime Market
- The market for lenders and borrowers of subprime credit, a credit that is lent to people of questionable or limited credit histories. Includes the business of subprime mortgages, subprime auto loans and subprime credit cards, as well as various securitization products that use subprime debt as collateral.
Subprime borrowing comes with a higher interest rate than for borrowers with good credit ratings, as the risk of default is much higher.
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Subprime Meltdown
- A financial crisis that arose in the mortgage market after a sharp increase in mortgage foreclosures, mainly subprime, collapsed numerous mortgage lenders and hedge funds.
The meltdown spilled over into the global credit market as risk premiums increased rapidly and capital liquidity was reduced. The sharp increase in foreclosures and the problems in the subprime mortgage market were largely blamed on loose lending practices, low interest rates, a housing bubble and excessive risk taking by lenders and investors.
It is also known as the "subprime collapse" or "subprime crisis".
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Subprime Mortgage
- A type of mortgage that is normally made out to borrowers with lower credit ratings. As a result of the borrower's lowered credit rating, a conventional mortgage is not offered because the lender views the borrower as having a larger-than-average risk of defaulting on the loan. Lending institutions often charge interest on subprime mortgages at a rate that is higher than a conventional mortgage in order to compensate themselves for carrying more risk.
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Subprime Rates
- Interest rates charged to subprime borrowers, such as on loans to people with poor credit scores from one or more credit bureau. Subprime rates will be higher than prime rates for the same type of loan, although there is no exact amount or spread that constitutes subprime.
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Subscribed
- Newly issued securities that an investor has agreed or stated his or her intent to buy prior to the issue date. When investors use rights, they expect to own the designated number of shares to which they have subscribed once the offering is complete.
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Subscription Agreement
- An application by an investor to join a limited partnership. In most cases, the investor will have to fill out a form created by the general partner evaluating the investor's suitability for the investment in the partnership.
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Subscription Price
- 1. A static price at which existing shareholders can participate in a rights offering conducted by a public company so they may retain their proportional ownership of the business. The subscription price will be the same for all shareholders and typically less than the current market price of the underlying stock.
2. Subscription price may also refer to the exercise price for warrant holders in a particular stock. Warrants may be issued at different times by the company along with debt offerings, so subscription prices may vary slightly from one owner to another.
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Subscription Right
- The right of existing shareholders in a company to retain an equal percentage ownership over time by subscribing to new stock issuances at or below market prices. The subscription right is usually enforced by the use of rights offerings, which allow shareholders to exchange rights for shares of common stock at a price generally below what the stock is currently trading for.
Also known as the "subscription privilege" or "preemptive right" of the shareholder.
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Subsequent Offering
- An offering of additional shares after the issuing company has already had an initial public offering (IPO).
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Subsidiary
- A company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company.
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Subsidiary Bank
- A type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. The subsidiary bank only needs to operate under the host country's regulations.
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Subsidy
- A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.
Politics play an important part in subsidization. In general, the left is more in favor of having subsidized industries, while the right feels that industry should stand on its own without public funds.