Business / Finance Glossary

Scalp: To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day.

Scattered: Used for listed equity securities. Unconcentrated buy or sell interest.

Scenario Analysis: The use of horizon analysis to project total returns under different reinvestment rates and future market yields.

Schedule 13d: Disclosure form required when more than 5% of any class of equity securities in a publicly held corporation is purchased.

Schedule C: Describes membership requirements and procedures of NASD, in its bylaws.

Scheduled Cash Flows: The mortgage principal and interest payments due to be paid under the terms of the mortgage, not including possible prepayments.

Scorched-Earth Policy: Often used in risk arbitrage. Any technique a company that has become the target of a takeover attempt uses to make itself unattractive to the acquirer. For example, it may agree to sell off . . . View Full Definition

SCORE: Stands for Special Claim on Residual Equity, a certificate that entitles the owner to the capital appreciation of an underlying security, but not to the dividend income from the security.

Screen Stocks: To analyze various stocks in search of stocks that meet predetermined criteria. For example, a simple value screen would sort all stocks by their price-to-book ratio and pick the stocks with . . . View Full Definition

Scrip: A temporary document that represents a portion of a share of stock, often issued after a stock split or spin-off.

Scripophily: Collecting stock and bond certificates for their scarcity, rather than for their value as securities.

Search Costs: Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time). Related: Information costs.

Seasonally Adjusted: Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year.

Seasoned: In the case of equity, having gained a reputation for quality with the investing public and enjoying liquidity in the secondary market; in the case of convertibles, having traded for at leas . . . View Full Definition

Seasoned Datings: Extended credit for customers who order goods in periods other than peak seasons.

Seasoned Issue: Issue of a security for which there is an existing market. Related: Unseasoned issue.

Seasoned New Issue: A new issue of stock after the company's securities have previously been issued. A seasoned new issue of common stock can be made using a cash offer or a rights offer.

Seat: Position of membership on a securities or commodity exchange, bought and sold at market prices.

SEC Fee: Small fee the SEC charges to sellers of equity securities on an exchange.

Second Mortgage Lending: Loans secured by real estate previously pledged in a first mortgage.

Second Pass Regression: A cross-sectional regression of portfolio returns on betas. The estimated slope is the measurement of the reward for bearing systematic risk during the period analyzed.

Second Round: Stage of venture capital financing following the start-up and first round stages and before the mezzanine level stage.

Second-Preferred Stock: Preferred stock issue that has less priority in claiming dividends and assets in liquidation than another issue of preferred stock.

Second-To-Die Insurance: Insurance policy that, on the death of the spouse dying last, pays a death benefit to the heirs that is designed to cover estate taxes.

Secondary Distribution-Offering: Public sale of previously issued securities held by large investors, usually corporations or institutions, as distinguished from a primary distribution, where the seller is the issuing corpo . . . View Full Definition

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