Safe Harbor 401(k) - A safe harbor 401(k) is similar to a traditional 401(k) plan, but the employer is required to make contributions for each employee. The employer contributions in Safe Harbor 401(k) plans are immediately 100 percent vested. The Safe Harbor 401(k) eases administrative burdens on employers by eliminating some of the complex tax rules ordinarily applied to traditional 401(k) plans.

Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) - A plan in which a small business with 100 or fewer employees can offer retirement benefits through employee salary reductions and matching contributions (similar to those found in a 401(k) plan). It can be either a SIMPLE IRA or a SIMPLE 401(k). SIMPLE IRA plans impose few administrative burdens on employers because IRAs are owned by the employees and the bank or financial institution receiving the funds does most of the paperwork. While each has some different features, including contribution limits and the availability of loans, required employer contributions are immediately 100 percent vested in both.

Scale order - An order to buy (or sell) a security, that specifies the total amount to be bought (or sold) at specified price variations.

Scripophily - A term coined in the mid-1970s to describe the hobby of collecting antique bonds, stocks and other financial instruments. Values are affected by beauty of the certificate and the issuer's role in world finance and economic development.

Seat - A traditional figure of speech for a membership on an exchange.

SEC - The Securities and Exchange Commission, established by Congress to help protect investors. The SEC administers the Securities Act of 1933, the Securities Exchange Act of 1934, the Securities Act Amendments of 1975, the Trust Indenture Act, the Investment Company Act, the Investment Advisers Act and the Public Utility Holding Company Act.

Secondary distribution - Also known as secondary offering. The redistribution of a block of stock some time after it has been sold by the issuing company. The sale is handled off the NYSE by a securities firm or group of firms and the shares are usually offered at a fixed price related to the current market price of the stock. Usually the block is a large one, such as might be involved in the settlement of an estate. The security may be listed or unlisted. 

Second-to-Die Life Insurance - An insurance policy that, upon the death of the spouse dying last, pays a death benefit to the heirs. The usual purpose of this type of policy is to cover estate taxes.

Securities Industry Automation Corporation (SIAC) - An independent organization established by the New York and American Stock Exchanges as a jointly owned subsidiary to provide automation, data processing, clearing and communications services.

Securities Investor Protection Corporation (SIPC) - Provides funds for use, if necessary, to protect customers' cash and securities that may be on deposit with a SIPC member firm in the event the firm fails and is liquidated under the provisions of the SIPC Act. SIPC is not a government agency. It is a non-profit membership corporation created, however, by an act of Congress.

Seller's option - A special transaction on the NYSE that gives the seller the right to deliver the stock or bond at any time within a specified period, ranging from not less than two business days to not more than 60 days.

Sell side - The portion of the securities business in which orders are transacted. The sell side includes retail brokers, institutional brokers and traders, and research departments. If an institutional portfolio manager changes jobs and becomes a registered representative, he or she has moved from the buy side to the sell side.

SEP - see Simplified Employee Pension Plan

Serial bond - An issue that matures in part at periodic stated intervals.

Settlement - Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or delivers securities sold and receives from the broker the proceeds of a sale.

Settlement Date - The date by which an executed stock, bond or mutual fund trade must be settled. For a buyer, he or she must pay for the securities they purchased by the settlement date. For a seller, that is the date he or she should receive (or have full access to) the funds resulting from the sale of their stock, bond or mutual fund.

For stocks, mutual funds, municipal bonds and corporate bonds, the settlement date is usually three business days after the trade was executed. For Treasury and zero coupon bonds, the settlement date is usually the next business day following execution.

Note: The settlement date runs from the date the trade was executed. In some cases, the execution date may be the first business day after a buyer (or seller) places the order to buy (or sell). This occurs if the buyer (or seller) places the buy (or sell) order after the closing time for those securities transactions. For more information, check with your stock

Short covering - Buying stock to return stock previously borrowed to make delivery on a short sale.

Short Refinance - The refinancing of a mortgage by a lender for a borrower currently in default on his or her payments. This is done to avoid foreclosure. Typically, the new loan amount is less than the existing outstanding loan amount and the difference is typically forgiven by the lender. A lender might do this because it is more cost effective than foreclosure proceedings.

Short sale - In finance, short selling or "shorting" is the practice of selling a financial instrument the seller does not own, in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor "goes long," purchasing a security in the hope the price will rise. Often the seller will "borrow" or "rent" the items to be sold, and later repurchase identical items for return to the lender. However, the practice is risky in that prices may rise indefinitely, even beyond the net worth of the short seller. The act of repurchasing is known as "covering" a position.

The term "short selling" or "being short" is often also used as a blanket term for strategies that allow an investor to gain from the decline in price of a security. Those strategies include buying options known as puts. A put option consists of the right to sell an asset at a given price; thus the owner of the option benefits when the market price of the asset falls. Similarly, a short position in a futures contract, or to be short on a futures contract, means the holder of the position has an obligation to sell the underlying asset at a later date, to close out the position.

    Short selling terms

Days to Cover (DTC) is a numerical term that describes the relationship between the amount of shares in a given equity that have been short sold and the number of days of typical trading that it would require to 'cover' all short positions outstanding. For example, if there are ten million shares of XYZ Inc. that are currently short sold and the average daily volume of XYZ shares traded each day is one million, it would require ten days of trading for all short positions to be covered (10 million / 1 million).

Short Interest is a numerical term that relates the number of shares in a given equity that have been shorted divided by the total shares outstanding for the company, usually expressed as a percent. For example, if there are ten millions shares of XYZ Inc. that are currently short sold and the total number of shares issued by the company is one hundred million, the Short Interest is 10% (10 million / 100 million).

SIMPLE - see Savings Incentive Match Plan for Employees of Small Employers

Simplified Employee Pension Plan (SEP) - A plan in which the employer makes contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. If certain conditions are met, the employer is not subject to the reporting and disclosure requirements of most retirement plans. Under a SEP, an IRA is set up by or for an employee to accept the employer’s contributions.

Sinking fund - Money regularly set aside by a company to redeem its bonds, debentures or preferred stock from time to time as specified in the indenture or charter.

Small-Cap - A stock with a small level of capitalization, usually less than $500 million in market value (market value = price per share multiplied by number of shares outstanding).  

Specialist - A member of the New York Stock Exchange who has two primary functions: first, to maintain an orderly market in the securities registered to the specialist. In order to maintain an orderly market, the exchange expects specialists to buy or sell for their own account, to a reasonable degree, when there is a temporary disparity between supply and demand. Second, the specialist acts as a broker's broker. When commission brokers on the exchange floor receive a limit order, say, to buy at $50 a stock then selling at $60 - they cannot wait at the post where the stock is traded to see if the price reaches the specified level. They leave the order with a specialist, who will try to execute it in the market if and when the stock declines to the specified price. At all times the specialists must put their customers' interests above their own.

Speculation - The employment of funds by a speculator. Safety of principal is a secondary factor.  

Speculator - One who is willing to assume a relatively large risk in the hope of gain.

Spend Down - A requirement that an individual use up most of his or her income and assets to meet Medicaid eligibility requirements.

Spin off - The separation of a subsidiary or division of a corporation from its parent company by issuing shares in a new corporate entity. Shareowners in the parent company receive shares in the new company in proportion to their original holding and the total value remains approximately the same.

Split - The division of the outstanding shares of a corporation into a larger number of shares. A 3-for-1 split by a company with 1 million shares outstanding results in 3 million shares outstanding. Each holder of 100 shares before the 3-for-1 split would have 300 shares, although the proportionate equity in the company would remain the same; 100 parts of 1 million are the equivalent of 300 parts of 3 million. Ordinarily, splits must be voted by directors and approved by shareholders.

Spring Loading - An option-granting practice in which options are granted at a time that precedes a positive news event. Spring loading relies on the fact that positive news typically causes the underlying company's stock to surge in value. Timing an option grant to precede the public news release provides the option holder with an almost instant profit.

State Health Insurance Assistance Program (SHIP) - Federally funded program to provide counseling to seniors regarding their insurance needs.

Stock -  A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated. 

Also known as "shares" or "equity".    A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings. In other words, a shareholder is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets.

Stocks are the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the long run.

Stock exchange - An organized marketplace for securities featured by the centralization of supply and demand for the transaction of orders by member brokers for institutional and individual investors.

Stock dividend - A dividend paid in securities rather than in cash. The dividend may be additional shares of the issuing company, or in shares of another company (usually a subsidiary) held by the company.

Stockholder of record - A stockholder whose name is registered on the books of the issuing corporation.

Stock index futures - Futures contracts based on market indexes, e.g. NYSE Composite Index Futures Contracts.

Stock ticker symbols - Every corporation whose transactions are reported on the NYSE or AMEX ticker or on Nasdaq has been given a unique identification symbol of up to four letters. These symbols abbreviate the complete corporate name and facilitate trading and ticker reporting. Some of the most famous symbols are: T (American Telephone & Telegraph), XON (Exxon), GM (General Motors), IBM (International Business Machines), S (Sears Roebuck) and XRX (Xerox).

Stop limit order - A stop order that becomes a limit order after the specified stop price has been reached.

Stop order - An order to buy at a price above or sell at a price below the current market. Stop buy orders are generally used to limit loss or protect unrealized profits on a short sale. Stop sell orders are generally used to protect unrealized profits or limit loss on a holding. A stop order becomes a market order when the stock sells at or beyond the specified price and, thus, may not necessarily be executed at that price.

Street name - Securities held in the name of a broker instead of a customer's name are said to be carried in "street name." This occurs when the securities have been bought on margin or when the customer wishes the security to be held by the broker.

Summary Plan Description - A document provided by the plan administrator that includes a plain language description of important features of the plan, e.g., when employees begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when payment is received and in what form, and how to file a claim for benefits. Participants must be informed of material changes either through a revised Summary Plan Description or in a separate document called a Summary of Material Modifications.

Surety - When a guarantor or a sum of money is held as a guarantee for a loan in good faith.  Says It is similar to a deposit on a loan or contract.

Surrender charges - Costs for withdrawing money from a variable annuity within a specified time period, typically seven years. Often you can withdraw at least 10 percent of your account value each year without triggering surrender charges.

Swapping - Selling one security and buying a similar one almost at the same time to take a loss, usually for tax purposes.

Syndicate - A group of investment bankers who together underwrite and distribute a new issue of securities or a large block of an outstanding issue.