Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: S

SHORT END

Maturity dates of less than three years on a yield curve. Refer to belly of the curve and long end.

SMALL CAP STOCK

Capital stock with less than 1 billion market capitalization. Refer to ankle biter large cap stock micro stock and mid cap stock.

SPREAD OPTION

When the difference between two assets and a strike price are used to pay off debt or loss. AKA difference, outperformance, and underperformance options. Refer to multi index option and yield curve

STATUTORY PROFIT

A calculation of premiums less expenses and losses to determine profitability of a company.

STRONG HANDS

A firm expecting underlying assets when an exchangetrade derivative contract expires. Refer to weak hands.

SYNDICATION

When a syndicate arrange the obligations of a loan between its members. There are primary and secondary offerings.

SECONDARY DISTRIBUTION

The resale by a bank or securities firm of securities on behalf of an investor where the seller is responsible for commission fees but keeps the proceeds from the sale.

SETOFF

When all transactions are cancelled due to default. Both debtor and investor agree to this. Refer to novation and payment netting.

SHORT HEDGE

When a short position is used to protect the long position. Refer to long hedge.

SNOWBALLING

When stop orders cause upward or downward market movement setting off additional stop orders, continuing until several cycles occur. Refer to gather in the stops.

SPREAD RISK

Risk due to changes between two assets with a common link. This is a category of market risk.

STERILIZATION

The offset of foreign exchange market effects by increasing or decreasing the national money supply by a monetary authority such as a central bank. It is a manipulation of the value of

STUB

A contract with the closest maturity date on eurodollars or a loan or bond with a short maturity.

SECONDARY MARKET

The market where securities are purchased and sold between investors, not the issuing companies. The New York Stock Exchange and NASDAQ are examples of secondary markets. This scenario creates an unpredictable environment

SETTLEMENT RISK

Default more commonly seen in international transactions resulting in a loss when one party fails to deliver after the other party has fulfilled their part of a contract. AKA clean risk and

SHORT INTEREST

The percentage of shares sold short that a firm holds indicating an expected increase or decline in the market.

SOFT CALL PROTECTION

The prevention of the issuer of a bond by an indenture preventing the recovery of the bond until the attainment of a certain price or a distinct percent of the conversion price

SPREADLOCK

A contract granting the issuer of a bond a fixed spread for a short time before the trade is complete. This guarantees the price will be a reference not a spread. Refer

STOCHASTIC PROCESS

An attempt to generate value by the way an assets dynamic movement in the market is described without considering the assets history. Refer to markov process.

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