Investment Terms: S
This article is from the Investment
Investment Terms: S
A trader who trades for small, short-term
profits during the course of a trading session, rarely carrying a
- Secondary Market:
Market where previously issued
securities are bought and sold.
Common or preferred stock; a bond of a
corporation, government, or quasi-government body.
- Selling Hedge (or Short Hedge):
Selling futures contracts
to protect against possible declining prices of commodities that will
be sold in the future. At the time the cash commodities are sold, the
open futures position is closed by purchasing an equal number and type
of futures contracts as those that were initially sold. See Hedging.
See Settlement Price.
- Settlement Price:
The last price paid for a commodity
on any trading day. The exchange clearinghouse determines a firm's net
gains or losses, margin requirements, and the next day's price limits,
based on each futures and options contract settlement price. If there
is a closing range of prices, the settlement price is determined by
averaging those prices. Also referred to as settle or closing price.
(noun) One who has sold futures contracts or
plans to purchase a cash commodity. (verb) Selling futures contracts
or initiating a cash forward contract sale without offsetting a
particular market position.
- Short Hedge:
See Selling Hedge.
- Simulation Analysis of Financial Exposure (SAFE):
sophisticated computer risk-analysis program that monitors the risk of
clearing members and large-volume traders at the Chicago Board of
Trade. It calculates the risk of change in market prices or volatility
to a firm carrying open positions.
A market participant who tries to profit
from buying and selling futures and options contracts by anticipating
future price movements. Speculators assume market price risk and add
liquidity and capital to the futures markets.
Usually refers to a cash market price for a
physical commodity that is available for immediate delivery.
- Spot Month:
See Nearby (Delivery) Month.
The price difference between two related
markets or commodities.
The simultaneous buying and selling of two
related markets in the expectation that a profit will be made when the
position is offset. Examples include: buying one futures contract and
selling another futures contract of the same commodity but different
delivery month; buying and selling the same delivery month of the same
commodity on different futures exchanges; buying a given delivery
month of one futures market and selling the same delivery month of a
different, but related, futures market.
- Steer/Corn Ratio:
The relationship of cattle prices to
feeding costs. It is measured by dividing the price of cattle
($/hundredweight) by the price of corn ($/bushel). When corn prices
are high relative to cattle prices, fewer units of corn equal the
dollar value of 100 pounds of cattle. Conversely, when corn prices are
low in relation to cattle prices, more units of corn are required to
equal the value of 100 pounds of beef. See Feed Ratio.
- Stock Index:
An indicator used to measure and report
value changes in a selected group of stocks. How a particular stock
index tracks the market depends on its composition the sampling of
stocks, the weighting of individual stocks, and the method of
averaging used to establish an index.
- Stock Market:
A market in which shares of stock are
bought and sold.
- Stop-Limit Order:
A variation of a stop order in which
a trade must be executed at the exact price or better. If the order
cannot be executed, it is held until the stated price or better is
- Stop Order:
An order to buy or sell when the market
reaches a specified point. A stop order to buy becomes a market order
when the futures contract trades (or is bid) at or above the stop
price. A stop order to sell becomes a market order when the futures
contract trades (or is offered) at or below the stop price.
- Strike Price:
The price at which the futures contract
underlying a call or put option can be purchased (if a call) or sold
(if a put). Also referred to as exercise price.
- Supply, Law of:
The relationship between product
supply and its price.
The place on a chart where the buying of
futures contracts is sufficient to halt a price decline.
The end of the evening session for
specific futures and options markets traded at the Chicago Board of