| S&P
500 |
An
unmanaged group of stocks often considered representative
of the stock market in general. This index is
composed of 400 industrial, 20 transportation,
40 utility, and 40 financial companies. |
| S&P
500 Index (Monthly Reinvestment) |
A
broad-based measurement of changes in stock
market conditions based on the average performance
of 500 widely held common stocks. Performance
figures assume that all dividends are reinvested. |
| S&P
500 Index Fund |
A
fund that invests primarily in the stocks included
in the S&P 500 Index. Sometimes referred
to as "blue-chip" stocks, they tend to be of
large, well-established companies. |
| Statement
of Additional Information (SAI) |
An
attachment to the fund's prospectus that contains
more detailed, supplementary information. Also
referred to as "Part B," the SAI is available
at no charge upon request from a fund. |
| Sales
Charge |
An
amount charged to purchase shares in many mutual
funds sold by brokers or other sales agents.
The maximum allowable charge is 8.5% of the
initial investment. |
| Same-Day
Substitution |
The
buying of one security and the selling of another
security, usually of equal value, on the same
day. |
| Science
& Technology Fund |
A
fund that invests primarily in the stocks of
companies engaged in science and technology
industries. |
| Sec
Yield |
A
standardized calculation that the Securities
and Exchange Commission requires mutual funds
to use when advertising rates of income return.
This standardized rate ensures that investors
are comparing "apples to apples" when comparing
ads from different mutual fund companies. |
| Secondary
Market |
The
market in which securities are traded after
the initial (or primary) offering. Gauged by
the number of issues traded. The over-the-counter
market is the largest secondary market. |
| Sector
Fund |
A
fund that invests primarily in securities of
companies engaged in a specific investment segment.
Sector funds entail more risk, but may offer
greater potential returns than funds that diversify
their portfolios. For example, a sector fund
may limit its holdings to securities from a
particular country or geographic region, or
it may specialize in the securities of energy-related
firms, or in companies that produce precious
metals. |
| Securities |
General
name for all stocks and shares of all types.
In common usage, stocks are fixed interest securities
and shares are the rest, though strictly speaking,
the distinction is that stocks are denominated
in money terms. |
| Securities
and Exchange Commission (SEC) |
The
US federal agency responsible for the enforcement
of laws governing the securities industry. |
| Securities
Industry Automated Corporation (SIAC) |
The
computer facility and trade processing company
for NYSE, AMEX, NSCC, and PCC. |
| Securities
Investor Protection Corporation (SIPC) |
Non-profit
organization consisting of members of the securities
industry who support it on an assessment basis.
If a member should fail, that member's customers
are protected up to a maximum of $500,000, including
up to $100,000 in cash. |
| Segregation |
The
isolation of securities that the firm may not
use for hypothecation or loan. The securities,
which must be "locked up" by the firm, represent
fully paid-for securities or the portion of
a margin account in excess of loanable securities. |
| Sell-Out |
Occurs
when a contract brokerage firm's client incurs
a margin or maintenance call and does not settle
the balance by settlement date. The firm then
sells the securities at the best price available
and the buyer is held liable for the price and
costs. |
| Sell/Write |
An
advanced option order that combines the short
selling of an equity and the selling of a put
option on the same underlying stock. |
| Seller's
Option |
A
settlement that calls for delivery and payment
according to the number of days specified by
the seller. |
| Serial
Bonds |
An
issue of bonds that matures over a period of
years. |
| Serial
Maturity |
Type
of bond maturity in which part of the issue
matures at different times until the whole issue
has matured. |
| Series |
Refers
to options with the same underlying security,
same expiration date, same exercise price and
the same type. |
| Series
Funds |
Funds
that are organized with separate portfolios
of securities, each with its own investment
objective. |
| Settled
Inventory |
The
portion of a trader's position that the firm
has paid for and maintains. This is the portion
that must be financed. |
| Settlement
Date |
The
day when a transaction is to be completed. On
this day, the buyer is to pay and the seller
is to deliver. Settlement is normally 3 business
days on listed equities and 1 business day on
listed options. |
| Settlement
Date Inventory |
The
total of all positions in a security on settlement
date, including fault, transfer, fails and elsewhere. |
| Securities
and Futures Authority (SFA) |
(previously
known as The Securities Association)The Self-Regulating
Organization responsible for regulating the
conduct of brokers and dealers in securities,
options and futures, including most member firms
of the Exchange. |
| Shareholder |
An
investor. The shareholder is the owner of shares
of a mutual fund. |
| Short
Account |
Account
in which the customer has sold short securities.
Before a customer may sell short, a margin account
must be opened. |
| Short
Exempt |
A
phrase used to describe a short sale that is
exempt from the short sale rules. For example,
buying a convertible preferred, submitting conversion
instructions, and selling the common stock before
the stock is received. |
| Short
Position |
(1)
A position in a customer's account in which
the customer either owes the firm securities
or has some other obligation to meet. (2) Any
position on the firm's security records having
a credit balance. |
| Short
Sale |
The
sale of securities that are not owned or that
are not intended for delivery. The short seller
"borrows" the stock to make delivery with the
intent to buy it back at a later date at a lower
price. |
| Short-Term
Bonds |
Those
maturing within five years. |
| Short-Term
Fund |
A
fund that invests primarily in securities with
maturities of less than one year. Short-term
funds include taxable money market funds and
tax-exempt money market funds (also known as
short-term municipal bond funds). |
| Signature
Guarantee |
A
stamp or seal given by a bank or member of a
domestic stock exchange that authenticates a
signature. A signature guarantee is typically
required by a mutual fund sponsor to conduct
certain transactions, such as the change in
ownership of an account. |
| Size |
The
number of shares available in a quote. For example,
if the quote and size on a stock is 9-3/8 to
9-1/2 3x5, it means that the bid is 9-3/8, the
offer is 9-1/2, 300 shares are bid, and 500
shares are offered. |
| Small
Company Growth Fund |
A
fund that seeks aggressive growth of capital
by investing primarily in stocks of relatively
small companies with the potential for rapid
growth. |
| Small-Caps |
Shorthand
for small capitalization stocks, small-caps
usually have a market capitalization of $500
million or less. In general, small caps tend
to be less established companies that offer
more growth potential than larger capitalized
companies, but which also entail greater risk. |
| Specialist |
A
member of certain SEC-regulated exchanges who
must make a market in assigned securities. Specialists
also act as two-dollar brokers in executing
orders entrusted to them. |
| Specific
Risk |
The
risk created by management, labor or business
problems that affect just one company. For example,
the value of a particular common stock may fall
if the products produced by the company fall
out of favor with consumers. See Investment
risk. |
| Spin
Off |
Giving
stock dividend in another CUSIP, usually a subsidiary. |
| Split
Fund |
A
mutual fund or unit trust that contains Treasury
securities and other types of investments. |
| Spread |
The
difference between the bid and offer sides of
a quote. |
| Spread
Order |
An
advanced option order that combines the purchase
and sale of two puts or two calls on the same
underlying security. |
| Spread-Load
Contractual Plan |
A
contractual plan for purchasing shares of a
mutual fund in which sales charges are not concentrated
in the first payment or in the first few payments
made by the investor. |
| Self-Regulating
Organization (SRO) |
An
organization recognized by the SIB and responsible
for monitoring the conduct of business by, and
capital adequacy of, investment firms. |
| Standard
Deviation |
A
measure of the degree to which a fund's return
varies from the average of all similar funds. |
| State
Death Taxes |
States
impose either estate or inheritance taxes upon
the death of a resident or a person who owns
real estate in the state. Estate taxes are based
on the size of the decedent's taxable estate,
whereas inheritance taxes are based on the amount
each person receives as an inheritance. Inheritance
tax rates generally vary depending on the type
and amount of property and the relationship
to the deceased person. For example, inheritance
tax rates are often lower for a spouse and higher
for more distant relations. Many states simply
use an estate tax equal to the credit for state
death taxes as calculated under the federal
estate tax rules. This does not increase the
overall death tax (federal and state); it just
diverts some of the tax from the federal government
to the state. Some states also impose a generation-skipping
transfer tax similar to the federal generation-skipping
transfer tax. |
| State
Municipal Bond Funds |
These
funds invest in bonds issued by municipalities
located all in one particular state. Residents
of that state earn income that is exempt from
federal, state, and sometimes city income taxes. |
| Statement
Of Additional Information (SAI) |
An
attachment to the fund's prospectus that contains
more detailed, supplementary information. Also
referred to as "Part B," the SAI is available
at no charge upon request from a fund. |
| Stock |
A
security that represents ownership in a corporation
and that is issued in "shares". |
| Stock
Ahead |
Refers
to a limit order that has not been executed
because of other orders at the same limit that
were entered earlier. |
| Stock
Dividends |
A
dividend paid by corporations from retained
earnings in the form of stock. The corporation
declares the dividend as a percentage of shares
outstanding. |
| Stock
Fund |
A
fund that invests primarily in stocks. |
| Stock
Power |
A
form that may be endorsed in lieu of endorsing
the back of the stock certificate. |
| Stock
Record |
A
ledger on which all security movements and positions
are recorded. The record is usually in two formats:
One shows movements of the security the previous
day and the other shows the current security
positions. |
| Stock
Splits |
The
exchange of existing shares of stock for more
newly issued shares from the same corporation.
Since the number of shares outstanding increase,
the price per share goes down. Splits do not
increase or decrease the capitalization of the
company, just redistributes it over more shares.
The effect is the adjustment to the trading
price. |
| Stockholder's
Equity |
Company's
net worth. Total liabilities are subtracted
from the total assets to arrive at this figure. |
| Stop
Limit Order |
This
order is similar to a stop order, but it becomes
a limit order instead of a market order when
the price is reached or passed. Buy stop limit
orders are entered above the current market;
sell stops are extended below it. |
| Stop
Order |
A
memorandum order that becomes a market order
when the price is reached or passed. Buy stops
are entered above the current market price;
sell stops are entered below it. |
| Straddle |
Simultaneous
long or short positions of puts and calls having
the same underlying security and same series
designation. |
| Strangle |
An
option strategy that refers to writing a call
and a put with different strike prices on the
same underlying security. |
| Street
Name |
A
form of registration in which securities are
registered in the name of a brokerage firm,
bank, or depository; it is acceptable as good
delivery. |
| StrikePrice |
(also
Exercise Price)The price at which an option
can be exercised. For example, the owner of
a call ABC April 40 can call in (buy) 100 shares
of ABC at 40; the strike price is 40. |
| Strip |
A
brokerage house practice of separating a bond
into two separate securities: a principal portion
(PO) and an interest portion (IO). A variation
known by the acronym "STRIPS" (Separate Trading
of Registered Interest and Principal of Securities)
is a stripped zero-coupon bond that is a direct
obligation of the U.S. Treasury. Other strips
include Treasuries stripped by brokers, such
as TIGERS, and Salomon Brothers' tax-exempt
M-CATS. |
| Subject
Quote |
A
quote given to indicate the current market status
but is not to be taken as a firm ask or bid. |
| Subordinated
Debenture |
A
debenture whose claim to interest and principal
of the corporation comes after those of regular
debentures and other debt securities. |
| Subscription
Right |
A
stockholder's right to maintain his proportionate
ownership in the company by being given the
opportunity to buy newly issued stock before
the general public. |
| Supplemental
Agreement |
An
agreement that modifies a previous agreement,
usually by adding additional conditions |
| Supplemental
Contract |
A
contract issued by the clearing corporation
that includes the total of the regular way contract,
adjustments made through advisories, and adds
by seller processing. |
| Switching |
The
movement of assets from one fund to another.
Also know as "exchanging." An investor will
switch mutual funds when their investment objectives
change or because of market conditions. This
is usually done within a family of funds, but
can be done between different fund families.
There usually is no charge for a certain number
of transactions per year, after which a transaction
fee may apply. |
| Symbol |
The
identifier code assigned to each publically
traded investment by the exchange it is traded
on.This code is used to identify the correct
fund in all transactions. This symbol may only
loosely resemble the newspaper listing - these
tend to be phonetic abbreviations of fund names. |
| Systematic
Withdrawal System |
An
optional service often available to shareholders
that would arrange for a fixed amount to be
redeemed from an account and sent to the shareholder
on a regular basis (usually monthly, quarterly,
or semi-annually). |
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