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Sallie Mae

Student Loan Marketing Association," it is one of several government agencies (such as Fannie Mae, Freddie Mac, and Ginnie Mae) that is permitted to issue debt for sale to the investing public. See Fannie Mae.

Sector Fund

A mutual fund that focuses on a particular sector of the market, such as health care, energy, or financial services.


A financial instrument that evidences direct ownership (via stock) or creditorship (via a bond) in a corporation, a federal or state government, a government agency, or a legal trust, as well as indirect ownership such as with rights, warrants, options, and partnership participations.

Securities and Exchange Commission

A government agency (also called the SEC) that administers the federal securities laws and helps ensure that the securities markets are fair and honest. The SEC requires that all publicly-traded firms file annual and other periodic reports with it.

Sell Side

The side of the financial services industry that "sells" investments to investors, such as a brokerage firm. See Buy Side.

Selling, General, & Administrative Expense

Often just called SG&A, this catchall expense category includes items such as salespersons' commissions, advertising, officers' salaries, and other general nature expenses.

Settlement Date

The date payment is due for a security trade.

Shareholders' Equity

The difference that remains after subtracting all of a company's liabilities from its assets. Shareholders' equity is also known as owners' equity or net worth. It generally consists of retained earnings, capital in excess of par value, and common stock. It might also include such items as preferred stock and treasury stock. For most analysis purposes, the distinctions between these accounts are unimportant. The combined shareholders' equity figure is the most relevant.

Short, Short Sale, or Short Seller

Selling a security that is not owned by the seller at the time of the sale. The shares that are sold are initially borrowed from a brokerage firm and later must be replaced by the seller by purchasing them in the open market. A short seller believes that a particular security is overpriced and will fall in price.

Sinking Fund

Money that a company sets aside periodically to fund the redemption of its bonds or preferred stock.


"Securities Investors Protection Corporation," which is a corporation created by the Securities Investors Protection Act of 1970 that provides protection to customers of insured members in case of the member's bankruptcy.

Soft Market

A term describing a market for stocks or bonds with weak demand.


Short for "Standard & Poor's Corp." A well-known company that publishes credit ratings for certain bonds, a variety of financial reports covering other firms, and several stock indexes among other activities.


A member of an organized stock exchange who endeavors to maintain an orderly market in the securities registered to the specialist and executes limit orders.

Spin Off

Used as a verb, it describes the process of separating a subsidiary or division of a corporation from the parent company by issuing shares in the new corporate entity. For example, "AT&T intends to spin off its regional Bell operating companies to invest." Used as a noun, it describes the firm created by this process. For example, "Southwestern Bell is a spin-off of AT&T.

Statement of Cash Flows

A statement which reveals where cash was provided and used by the corporation. It is divided into three general sections: cash provided/used by operations, cash provided/used by investing activities, and cash provided/used by financing activities. It also lists the depreciation and amortization charges taken by the firm against earnings.

Stocks, type of

Blue-Chip — those stocks of quality firms with a long history of good earnings performance.

Growth — those stocks expected to grow in price at a relatively fast pace.

Income — those stocks that offer a higher than average dividend yield, such as many utility stocks.

Investment — those stocks that have a long history of good earnings performance.

Large-Cap — those stocks with a capitalization in excess of five billion dollars.

Low Priced — those stocks that are generally priced below $30 per share.

Penny — highly speculative stocks selling below $1 a share.

Small-Cap — those stocks with a capitalization of less than $500 million.

Speculative — those stocks that carry an above-average risk but potentially offer an above-average rate of return.

Value — those stocks that are relatively under priced.

Stock Dividend

A dividend that is paid by a firm in stock rather than in cash. For all practical purposes, it has the same impact on a stock as a stock split.

Stock Split

A corporate action that typically increases the number of shares of stock that a firm has outstanding (a far less common corporate action called a reverse stock split decreases the number of shares of stock outstanding). Although a stock split results in each shareholder owning more shares, the price of each share decreases proportionally so the value of the shareholder's investment remains the same.

Stock Index Futures

A particular type of futures contract that is based on a stock index, such as the S&P 500.

Stop Loss Order

A sell order given to a broker by an investor that is only executed if the price of a stock falls below a stipulated price. An investor would use this type of order if he/she wanted to limit the potential price decline or loss by a particular stock.

Street Name

Describes securities that are held by a broker on behalf of an investor but registered in the broker's name with the underlying issuing company.

Strike Price

The price at which a transaction involving an option will occur. Also called the "exercise price."


The sale of one security and the immediate purchase of another very similar security. This term can also refer to interest rate and/or currency swaps, which are sophisticated financial transactions engaged in by large corporations, brokerage firms, and institutional investors.

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