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Investment Terms: S




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This article is from the Investment Terms.

Investment Terms: S

  • Scalper:
    A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.

  • Secondary Market:
    Market where previously issued securities are bought and sold.

  • Security:
    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.

  • Settle:
    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.

  • Short:
    (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):
    A 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.

  • Speculator:
    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.

  • Spot:
    Usually refers to a cash market price for a physical commodity that is available for immediate delivery.

  • Spot Month:
    See Nearby (Delivery) Month.

  • Spread:
    The price difference between two related markets or commodities.

  • Spreading:
    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 reached again.

  • 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.

  • Support:
    The place on a chart where the buying of futures contracts is sufficient to halt a price decline.

  • Suspension:
    The end of the evening session for specific futures and options markets traded at the Chicago Board of Trade.

 

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