| 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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