See: Split; Stock Dividend

S&P (Standard & Poor's Corporation)
Acronym for Standard & Poor's, a provider of a wide variety of investment-related services including ratings for bonds, stocks, and commercial paper; publishing statistical information and reports; and compiling indexes, including the Standard & Poor's Index of 500 Stocks.

See: Moody's Investors Service; Rating; Standard & Poor's 500 Index

Sales Charge
A fee paid to a broker in connection with the purchase of a load mutual fund or a limited partnership. The sales charge, or load, generally decreases as the size of the investment increases.

See: Limited Partnership; Load; Load Mutual Fund; Mutual Fund

Same Day Substitution
The purchase and sale of securities on the same day in a margin account, both having equal dollar value. When a same-day substitution is made, a margin call is not generated, and there is no credit release to the special miscellaneous account (SMA). A long sale and a short sale are also considered a same-day substitution.

See: Margin; Margin Account; Margin Call; Special Miscellaneous Account

Same Side Of The Market
In options, it relates to the investor's expectations for the underlying security--that is either bullish or bearish. Short calls and long puts are bearish. Long calls and short puts are bullish.

See: Bear; Bull; Call Option; Options; Put Option

Saucer
A technical chart pattern that indicates a security's price has begun to increase after declining and bottoming out. An inverse saucer has a reverse pattern characterized by a decline after increasing and then reaching a plateau.

See: Chartist; Technical Analysis

Script Certificate
A fractional share of a stock issued by a corporation.

See: Share

Seasonal Stock
A stock whose value fluctuates due to holidays, vacations, and changes in the climate. For instance, a toy company may experience an increase in sales and earnings during the Christmas season.

See: Cyclical Stock; Defensive Securities

Seat
Membership on an exchange.

See: Member Firm; Regional Stock Exchanges; Stock Exchange

SEC (Securities And Exchange Commission)
A federal agency created in 1934 by an act of Congress to regulate various aspects of the securities industry. The SEC is made up of five commissioners, each appointed by the President, with the advice and consent of the Senate, for a five-year term. In order to ensure the political independence of the commissioners, no more than three may be from the same political party at any one time.

See: NASD; NYSE; MSRB; Securities Act Of 1933; Securities Exchange Act Of 1934

SEC Fee
A nominal fee charged by the SEC on the sale of listed equity securities.

See: Listed Security; SEC

Secondary Distribution
The sale of previously issued shares of a security to the public. Usually these are shares owned by large institutions or corporations, rather than by the issuer as is the case with an initial public offering.

The sale is usually not handled on an exchange, but instead is handled by an investment banker or group of investment bankers. Also known as a "secondary offering".

See: Initial Public Offering; Investment Banker; Secondary Market

Secondary Market
The trading in existing or outstanding shares of securities as opposed to new issues, or initial public offerings. Transactions in the secondary market occur either on an exchange or in the over the counter market.

See: Initial Public Offering; Over The Counter; Secondary Distribution; Stock Exchange

Sector Fund
A mutual fund that invests in the stocks of a particular industry, such as the airline industry.

See: Mutual Fund

Secured Bond
A bond that is secured by a specific asset pledged by the issuer. (ie. property)

Securities And Exchange Commission (SEC)
A federal agency created in 1934 by an act of Congress to regulate various aspects of the securities industry. The SEC is made up of five commissioners, each appointed by the President, with the advice and consent of the Senate, for a five-year term. In order to ensure the political independence of the commissioners, no more than three may be from the same political party at any one time.

See: NASD; NYSE; MSRB; Securities Act Of 1933; Securities Exchange Act Of 1934

Securities Act Of 1933
An act of Congress which governs the issuance of new issues of securities. It requires the registration of securities, disclosure of pertinent information relating to new issues so that investors may make informed decisions.

See: New Issue; Registered Security; Securities And Exchange Commission; Securities Exchange Act Of 1934

Securities Exchange Act Of 1934
An act of Congress which created the Securities and Exchange Commission and governs the securities markets.

See: Securities And Exchange Commission; Securities Act Of 1933

Securities Industry Association (SIA)
A trade association for broker-dealers.

See: Broker; Dealer

Securities Investor Protection Corporation (SIPC)
A nonprofit corporation established by an act of Congress in 1970 in order to protect the customers of brokerage firms from the insolvency of those firms. All broker-dealers registered with the Securities and Exchange Commission and with a national exchange are required to join. SIPC provides up to $500,000 in protection, of which no more than $100,000 may be in cash.

See: Insolvency; Securities And Exchange Commission

Security
Any instrument that represents ownership, or the right to ownership, of a corporation, or that represents the debt of a corporation.

See: Debt; Instrument; Shareholder

Seek a Market
To look for a buyer or a seller.

Self Directed IRA
Individual retirement account that is managed by an account holder who appoints a custodian to carry out instructions. This kind of IRA is subject to the same types of restrictions and limitations as a regular IRA.

See: Custodian; Individual Retirement Account; Spousal IRA; Tax Deferred

Sellers Market
A situation where demand for a security or product exceeds supply, thereby causing an increase in the price of the security or product and allowing sellers to set the terms of sale.

Seller's Option Contract
A transaction in which normal settlement cycles are not followed, and instead the seller has the right to make delivery within a specified period of time, ranging from not less than six business days to not more than 60 calendar days. The seller is required to provide written notification to the buyer one full business day prior to making delivery.

See: Delivery; Settlement

Selling Climax
A sudden drop in the market due to panic on the part of investors.

See: Bear Market; Black Friday; Black Monday; Buying Climax; Crash

Selling Dividends
An practice whereby a broker encourages a customer to buy mutual fund shares in order to receive an anticipated dividend. Since the dividend is part of the net asset value of the fund and already reflected in the price, the customer earns no benefit by purchasing the fund prior to the scheduled dividend.

See: Mutual Fund; Net Asset Value

Selling Group
A group of dealers hired by the underwriters to act as their agent in order to sell a new issue. The selling group members must abide by the selected dealer agreement which outlines the terms of the relationship with the underwriting group.

Selling Off
The act of selling securities in a panic situation in order to avoid a greater loss than already sustained.

See: Bear Market; Selling Climax

Selling On The Good News
The act of selling a security shortly after a positive news article is disseminated to the public. Very often, investors are eager to buy a stock if there is good news, thereby pushing the price up. Sellers who think the stock has peaked will sell on the good news rather than risk a subsequent decline.

See: Buy On The Bad News

Selling Short
The sale of a security that the investor does not own in order to take advantage of an anticipated decline in the price of the security. In order to sell short, the investor must borrow the security from his broker in order to make delivery to the buyer. The short seller will eventually have to buy the security back, or buy to cover, in order to return it to the broker. Short selling Is regulated by Regulation T of the Federal Reserve Board.

See: Close A Position; Covering Short; Delivery; Margin; Regulation T; Selling Short Against The Box; Short Covering; Short Interest; Short Interest Theory; Short Market Value; Short Position; Short Squeeze; Uptick Rule

Selling Short Against The Box
A short sale where the investor owns the security, but does not want to use the shares for delivery, so he borrows them from the brokerage firm. This is usually done to lock in a profit, while delaying the tax consequences to a subsequent year.

See: Selling Short; Thirty Day Wash Rule

Sell Out Procedures
Liquidation of a margin account that has failed to meet the equity requirements established by margin regulations, or liquidation of a security that has not been paid for by the customer in accordance with industry regulations.

See: Equity; Liquidation; Margin Account; Margin Requirement

Sell Stop Order
An order to sell a security at the market price once the security trades through a specified price, called the stop price.

See: Orders; Stop Order

Senior Securities
Debt securities and preferred stocks. These securities are senior to common stock because they have prior claim to a corporation's assets in the event of bankruptcy.

See: Common Stock; Debt Security; Junior Issue; Junior Securities; Liquidation; Preferred Stock

Sensitive Market
A market highly susceptible to new announcements, either good or bad.

See: Bear Market; Bull Market; Soft Market

SEP (Simplified Employee Pension)
Acronym for simplified employee pension plan, a type of pension plan whereby both the employee and employer contribute to the employee's individual retirement account.

See: Individual Retirement Account; Pension Fund; Qualified Pension Plan Or Trust

Series Of Options
All call or put options on a security having the same exercise price and expiration date. For example, all XYZ October 30 calls would comprise a series of options.

See: Call Option; Exercise Price; Expiration Date; Options; Put Option

Settlement
The conclusion of a securities transaction, as evidenced by the seller delivering the security and the buyer paying for it. Most securities, but not all, settle in three business days.

See: Settlement Date; Transaction

Settlement Date
The date upon which the buyer and seller of a security are expected to settle a transaction, as evidenced by the seller delivering the security and the buyer paying for it. Most securities, but not all, settle in three business days.

See: Delivery; Regular Way Delivery (Settlement); Settlement