Glossary of Stock Investing Terms: S
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This article is from the Glossary of Stock Investing Terms.
Glossary of Stock Investing Terms: S
- Secondary market:
All stock exchanges are part of the Secondary Market, where investors buy securities from other investors (as opposed to an issuing company).
- Securities and exchange commission:
Abbreviated SEC. The federal agency responsible for the regulation of the securities industry.
- Securities investor protection corporation.:
Abbreviated SIPC. A nonprofit corporation created by Congress to provide protection for the clients of brokerage firms that are forced into bankruptcy. SIPC provides customers with up to $500,000 coverage for cash and securities.
- Security:
According to the Securities Exchange Act of 1934, this is the definition of a security: "The term 'security' means any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a 'security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited." Got that?! A simpler definition is that a security is a piece of paper that can be assigned a value and sold, or any investment made with the expectation of a profit.
- Sell:
To transfer ownership of a security for money.
- Series 7:
The license issued by NASD to individuals to allow them to sell securities. Holders of a Series 7 license are known as Registered Representatives.
- Selling short:
A bet by an investor that a stock will go down in price. The investor borrows the stock from a broker, sells it, and eventually buys it back on the market and returns the new shares to the broker. If the stock declines in price between the time the investor sells the shares and buys them back, a profit is realized.
- Settlement date:
For stocks, payment must be made by the third business day after the purchase. This is the Settlment Date.
- Shares:
Certificates representing ownership in a corporation.
- Share repurchase:
A company's own plan to buy back its own shares from the marketplace, reducing the number of outstanding shares, and typically an indication that the company's management thinks the shares are undervalued.
- SIC code:
Standard Industrial Classification. A series of 4-digit codes that are used to categorize business activities.
- Spread:
The difference between the ask and bid prices of a stock.
- Stock dividend:
A dividend paid in additional shares of a company's stock instead of in cash.
- Stock split:
A proportional increase in a company's outstanding shares. After the split, the market value of the shares remains the same, though the number of shares held by each shareholder is proportionately increased.
- Stock symbol:
A unique symbol assigned to a security.
- Stockbroker:
A licensed representative who places orders to buy and sell securities for customers.
- Stockholders' equity:
Known as Book Value.
An order placed with a broker to buy or sell at a specified price or better after a given stop price has been reached or passed. - Stop order:
Stop-Loss or Stop-Limit Order. An order to sell a stock when its price falls to a particular point to limit an investor's losses.
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