Moneyterms S-Z

S,G & A: Overheads or administrative overheads; usually the most important element of operating costs; largely fixed costs with some variable elements....more on S,G & A
SAC: Subscriber acquisition cost. The total cost of signing up a new customer; often used by mobile phone networks....more on SAC
Sales mix: The proportion of sales coming form different products or services....more on Sales Mix
Sale and leaseback: The sale of assets followed by their lease back to the seller....more on sale and leaseback
Sarbanes-Oxley: US legislation that imposed heavy regulation which lead to very high compliance costs...more on Sarbanes-Oxley
Sales, general and administrative costs: Overheads or administrative overheads; usually the most important element of operating costs; largely fixed costs with some variable elements....more on Sales, general and administrative costs
Same store sales: A near synonym for like-for-like sales....more on Same store sales
Scenario planning: A process used for long term strategic planning....more on Scenario planning
Scheme of arrangement: A re-organisation of a company's financial structure, agreed between the company and either creditors or holders of securities, and approved by a court....more on Scheme of arrangement
Scrip dividend: A scrip issue made in lieu of a cash dividend with shareholders given the choice of cash or scrip....more on Scrip dividend
Scrip issue: The issue of new shares to existing shareholders at no charge in proportion to their existing shareholdings. It is basically a bookkeeping exercise....more on Scrip issue
Secondary listing: A security that has a primary listing in one marker may have secondary listings elsewhere....more on Secondary listing
Secondary market: Trading in securities between investors, as opposed to the sale of securities from issuers to investors....more on Secondary market
Sector: A grouping of companies in the same industry or otherwise similar. Sectors and sector indices are used as benchmarks for comparison....more on Sector
Sector PE: Total market capitalisation of the sector ÷ total net profits....more on Sector PE
Secular trend: A sustainable underlying trend, as opposed to a seasonal variation...more on Secular trend
Securities market line: The relationship between risk and return....more on Securities market line
Securitisation: The creation of debt securities backed by cash flows, with no recourse to the borrower....more on Securitisation
Security: A financial instrument that entitles the owner to some stream of future cash flows, or an asset that has been used to secure a loan....more on Security
SEDOL code: Stock Exchange Daily List Code. A numbers that uniquely identifies a UK listed securities, and a component of their ISIN codes....more on SEDOL code
Seigniorage: The profit a government makes from creating money as physical currency or balances with the central bank....more on seigniorage
Self-selection bias: The distortion of statistics that occurs when the people or organisations being sampled can decide on their own inclusion in the sample....more on self selection bias
Sell side analyst: An analyst (usually employed by a stockbroker) who writes detailed investment research that is circulated to clients....more on sell side analysts
Semi-variable costs: Semi-variable costs are those that have both fixed and variable elements....more on Semi-variable costs
Semiconductor: Electronic components, such as integrated circuits ("chips") made out of semiconducting materials....more on Semiconductor
Senior debt: Debt that is paid before junior debt in the event of the issuer's liquidation....more on Senior debt
Sequential growth: Growth over the previous period, rather than over the same period in the previous year....more on Sequential growth
Share buy-back: The purchase by a company of its own shares in the market...more on Share buy-back
Share capital: An number shown on the balance sheet; the total of the par values of all shares in issue....more on share capital
Share premium account: A reserve containing the difference between the amount of share capital at par value, and the actual amount raised from shareholders....more on the share premium account
Shareholder activism / investor activism: Action by shareholders to intervene in the running of a company....more on shareholder activism / investor activism
Shareholders' funds: The book value of the shareholders' interest in a company....more on shareholders' funds.
Share split: The division of shares into a grater number of shares of lower par value...more on Share split
Sharpe ratio: The ratio of the relative return a portfolio to the standard deviation of expected returns....more on Sharpe ratio
Shell company: A listed shell is a company that has no assets or operations but is listed: a likely target for a reverse takeover....more on Shell company
Short position: An investor who has sold a security without owning it has a short position in it....more on Short position
Short selling: Selling a security one does not own....more on Short selling
Shrinkage: The rate of loss of products (through theft, error and fraud) from stock as a percentage of profit or sales....more on Shrinkage
Single premium vs regular premium: The payment of a one-off premium for an insurance policy....more on Single premium vs regular premium
Single price: A price for investment in a collective investment vehicle that applies to both buying and selling it....more on Single price
SIPP (Self Invested Personal Pension): A UK pension scheme that is a wrapper around a portfolio of investments that may be invested in a wide range of securities....more on SIPP
SIV: A special purpose vehicle that funds purchases of long term fixed interest assets with short term borrowing....more on SIV
Size effect: The long term out-performance by small caps...more on Size effect
Small cap: Companies with a low market cap; they make up only a small part of the market by market cap but a large part by number...more on Small cap
Smart money: Money managed by investors who are likely to outperform the market...more on Smart money
SME (small to medium enterprises): Small to Medium Enterprise...more on SME (small to medium enterprises)
Social grades: The classification of people by social and economic class. The commonest system runs from A (professional) to E (casual labourers) based on occupation....more on Social grades
Soft commission: Commission given in a non-cash form....more on Soft commission
Solvency margin: The minimum allowed excess of an insurance company’s capital over its liabilities....more on Solvency margin
Solvency ratio: A measure of the financial strength of an insurer; net assets ÷net premium written....more on Solvency ratio
Sovereign debt: A government's borrowings...more on Sovereign debt
Sovereign risk: The risk of a government defaulting in such a way as to prevent judicial enforcement of its debts....more on Sovereign risk
Sovereign wealth fund: An investment fund owned by a government....more on sovereign wealth funds
Spark spread: The difference between the wholesale price of electricity and the cost of the fuel used to generate it....more on Spark spread
Special dividend: A label attached to a dividend to make it clear that it is a one-off and does not signal a change in dividend policy....more on Special dividend
Special items: Unusual costs or revenues whose exclusion from profits better shows underlying performance...more on Special items
Special purpose vehicle/entity: A company that is created solely for a particular financial transaction or series of transactions....more on Special purpose vehicle/entity
Spin-off: The separation of one of a company's businesses...more on Spin-off
Split capital investment trusts: An investment trust that issues two classes of shares: income shares that pay high dividends and zeros for pure capital gains....more on Split capital investment trusts
Spot price: The price of a commodity, currency or security with payment and delivery made as soon as settlement systems permit....more on Spot price
SPV (SPE): A company that is created solely for a particular financial transaction or series of transactions...more on SPV (SPE)
Stag: Someone who buys shares through an IPO with the intention of selling as soon as dealing starts....more on Stag
Stagflation: Simultaneous inflation and recession....more on stagflation
Stamp duty: A tax charged on the transfer of an asset....more on stamp duty
Standard deviation: The root of the sum of the squares of the differences between a series of numbers and their average; a statistical measure of how much the series varies....more on standard deviation
Static hedge: A hedge that does not require constant monitoring and re-balancing....more on static hedging
Statistical arbitrage: A market neutral trading strategy based on expected reversions to past relationships between securities prices....more on statistical arbitrage
Statement of total recognised gains and losses: A statement of the gains and losses made by a company during a period including those not shown in the profit and loss account....more on the statement of total recognised gains and losses
Stock: Either raw materials and assets held for future sale (British usage) or equity (American usage)...more on Stock
Stock (inventory): Current assets held for sale, or for processing and subsequent re-sale....more on Stock (inventory)
Stock turnover: Annual sales ÷ stocks; measures how well a company coverts stocks into sales....more on Stock turnover
Stop loss: A trade that is made in order to limit the loss caused by an adverse price movement. ...more on stop loss orders
Stop limit order: A type of stop loss order that essentially becomes a limit order once a price threshold is crossed....more on stop limit order
Straddle: An options trading strategy that makes a profit on large movements either way in price of the the underlying security...more on straddle
Straight through processing: The passing of orders through purely electronic systems with no human intervention...more on straight through processing
Strike price: The price at which a derivative gives the right (or obligation) to buy or sell the underlying security. Also called the exercise price....more on strike price
Strips: Securities created by separating the repayments of a bond to create standalone securities....more on strips
Structured investment vehicle: A special purpose vehicle that funds purchases of long term fixed interest assets with short term borrowing....more on Structured investment vehicles
Structured notes: Structured notes are bonds that contain embedded derivatives...more on structured notes
Style index: A style index is an index that provides a measure of how a particular investment style has performed, either in a particular market or globally...more on style indices
Style drift: An change in investment style that gradually moves away from the intended or mandated approach...more on style drift
Submarine patent: A patent that is deliberately kept quite, in the hope of extracting money later from those who use an idea believing it not to be patented...more on submarine patents
Subordinated debt: Debt that takes a lower priority than other debt if the event of the issuer's liquidation....more on subordinated debt
Subscriber acquisition cost: The average cost of signing up a new customer, often used by mobile phone networks....more on subscriber acquisition cost
Subscription revenues: Revenues paid by subscribers fixed periodic payments, stable compared with those that depend on the consumption of services....more on Subscription revenues
Subsidiary: A company owned or controlled by another. The controlling company is called the parent company....more on subsidiaries
Sum of parts valuation: The valuation of a company by separately valuing different parts of it so different valuation methods or ratios can be applied to disparate businesses....more on sum of parts valuation
Sunk costs: Costs which have already been made and can not be recovered....more on sunk costs
Super-contango: A greater premium on forward prices (against spot) of a commodity than can be readilly explained....more on super-contango
Survivorship bias: The exaggeration of returns because calculations fail to include securities or markets that have ceased to existed....more on survivorship bias
Swaps: An agreement to exchange one stream of cash flows for another, often used to switch currencies and interest rates (fixed vs floating)....more on swaps
Swaption: An option on a swap....more on swaptions
Switched telecoms: Tradition voice only telecoms systems....more on switched telecoms
Synchronisation fees: Royalties that are paid for the use of music as part of another work...more on synchronisation fees
Syndicate: A group of financial institutions that divide a loan, underwriting or similar undertaking between themselves in order to spread risk....more on Syndicate
Synergy: The gains made by combining parts, for example the cost savings that result from an acquisition....more on Synergy
Systemic risk: The risk of failure of the financial system or an economy, as opposed to just the risk of failure of one corporation....more on Systemic risk
Synthetic security: A packaged combination of securities that mimics the properties of another security...more on Synthetic security
T-bill: An abbreviation of treasury bill; a short term zero coupon government bond....more on T-bill
Take private: The purchase of and de-listing of a company so it returns to being a privately held company....more on Take private
Takeover: The purchase of one company by another...more on Takeover
Takeover bid: An offer to buy a listed company....more on Takeover bid
Takeover Panel: The UK's main regulator of issues connected to mergers and acquisitions....more on Takeover Panel
Tax shield: A tax shield is the adjustment made of the tax saving resulting from a method of financing, usually by using debt rather than equity....more on tax shield
Tangible assets: Assets that have a physical form and financial assets, as opposed to intangible assets....more on tangible assets
Tangible book value per share: net book per share excluding intangibles....more on tangible book value per share
Tangible common equity: Tangible common equity is the value of assets attributable to ordinary shareholders....more on tangible common equity
TCE ratio: Tangible common equity as a proportion of total assets....more on TCE ratio
TCO: Total cost of ownership: the cost of buying an asset or system and operating it over its lifetime....more on TCO
Techmark: A grouping of technology companies by the London Stock Exchange....more on the Techmark
Technical analysis: The attempt to predict financial markets purely by looking at past financial data (securities prices, indices and other trading data)....more on technical analysis
Technical insolvency: Having a negative net asset value, not necessarily bringing a high risk of actual insolvency....more on technical insolvency
Technical reserves: the amounts insurance companies set aside from profits to cover claims....more on technical reserves
Ten bagger: An investment that increases in value by ten times over a short holding period...more on ten baggers
Term structure: The pattern of variation of interest rates with time...more on term structure
Terminal value: The value used for the cash flow in the last year of an NPV; the value of the investment at the end of the last period of the NPV....more on terminal value
Termination rates: The payment made by a telecoms network originating a phone call, to that to which the call is made....more on Termination rates
Theta: The rate of change of the value of a derivative or portfolio with time...more on theta
Tick: The unit in which security prices move....more on Tick
TIDM: A memorable code used to identify UK listed securities, usually based on abbreviations of company names....more on TIDM
Thin capitalisation: Funding a company almost entirely through debt, with only a nominal amount of equity....more on thin capitalisation
Tier one capital: A measure of how much capital a bank has. Shareholders funds with some deductions....more on tier 1 capital
Tier two capital: A broader measure than tier one capital. Share and subordinated debt capital with some adjustments....more on tier 2 capital
Time value of money: The idea that money is worth more if received sooner rather than later....more on time value of money
Tip sheet: A newsletter or journal that offers investors advice on stocks....more on Tip sheet
Tobin's Q: Market value of a company's assets ÷ replacement value. Arguably more useful when applied at market level than to individual companies....more on Tobin's Q
Tobin tax: A tax on foreign exchange transaction....more on Tobin tax
Top down investment: A strategy of first deciding how much to investment in asset classes and regions before picking individual stocks....more on top down investment
Total billings: The amount paid to advertising agencies by clients for the purchase of advertising space. part of the agencies' turnover but not usually recognised as revenue....more on total billings
Total return: The combined gains on an investment from both capital gains and income....more on total return
Tracker fund: A collective investment vehicle that is designed to replicate the performance of a particular index....more on tracker funds
Tracking error: The standard deviation of the excess returns of a portfolio against its benchmark index....more on tracking error
Tracking stock: Securities which are designed to have a value that reflect the value of a division of a company rather than the company as a whole....more on tracking stocks
Trade buyer: In the context of a takeover, a bidder in the same industry as the target....more on Trade buyer
Traded option: An option that can be bought and sold though a securities market...more on Traded option
Trading profit: Operating profit adjusted by excluding certain items, in order to give a better view of the underlying results....more on Trading profit
Trading comps (comparables): Valuation ratios when used to value a company by comparison with listed peers...more on Trading comps (comparables)
Trailing twelve months: Financial numbers based on the sum of the last four quarters (or two half years) rather than the last full year....more on trailing twelve months
Transaction comps/deal comps: The use of comparisons of the valuations at which transactions, such as takeovers, have occurred, in valuing a company...more on Transaction comps/deal comps
Transfer pricing: The prices at which goods are sold between divisions of a company, or companies that are part of the same group....more on Transfer pricing
Treasury bill: A short term zero coupon government bond...more on Treasury bill
Treasury shares: Treasury shares are a company's holdings of its own shares....more on Treasury shares
Treatment and refining costs: The two main costs of extracting pure marketable metal from ore....more on Treatment and refining costs
Triple witching: A period of volatility caused by the expiry of three classes of derivatives on the same underlying....more on triple witching
TTM: Financial numbers based on the sum of the last four quarters (or two half years) rather than the last full year....more on TTM
Turnover: The broadest measure of a company's sales. Often the same as revenue, but sometimes very much greater....more on Turnover
Uberrimae fides: The duty of a person buying insurance to to disclose all relevant information....more on Uberrimae fides
UKLA (UK Listing Authority): The FSA acting in its role as the regulator of listings for trading on exchanges in the UK....more on UKLA (UK Listing Authority)
Unconditional offer: ...more on Unconditional offer
Uncovered interest arbitrage: A combination of trades that makes a profit from an inconsistency between exchange rate differentials and the forward premium (discount) on a currency....more on Uncovered interest arbitrage
Uncovered interest rate parity: The interest rate parity relationship that can be derived from assuming no uncovered interest arbitrage...more on Uncovered interest rate parity
Underlying asset: the asset on which the price of a derivative depends....more on Underlying asset
Underwriter: Someone who takes a financial risk (relieving another party of it) in return for a fee....more on Underwriter
Unearned premium reserve: the total amount of premiums written but not yet earned....more on Unearned premium reserve
Unexpired risk reserve: A reserve created if the unearned premium reserve is felt to be inadequate....more on Unexpired risk reserve
Unit cost averaging: Buying securities at intervals in order to smooth out the effect of price fluctuations....more on Unit cost averaging
Unit Trust: An investment vehicles that allows investors to pool money. The fund grows or shrinks as investors add or withdraw money from it....more on Unit Trust
Unpaid dividend: A dividend that has been declared but not yet paid. Shown as a liability on the balance sheet....more on Unpaid dividend
Unqualified audit opinion: A statement in an auditors' report that the accounts give a true and fair view....more on Unqualified audit opinion
Upstream: In the oil and gas industries, exploration and production as opposed to downstream refining and distribution....more on Upstream
Utility: The satisfaction that individuals gain from buying goods or services. A key economic concept....more on utility
Utility curve: A graph of the relationship between utility an individuals consumption of something....more on utility curve
Valuation ratios: A measure of how expensive a share is obtained by dividing a measure of cost against a measure of value or profits....more on Valuation ratios
Value added: The difference between the value of inputs and the value of outputs....more on value added
Value at risk: A measure of the risk of a portfolio; the loss that is unlikely to be exceeded in a given period of time with a given level of confidence....more on value at risk
Value effect: The tendency of value stocks to outperform...more on the value effect
Value investing: A style of investing based on picking shares that have low valuations relative to their current profits, cash flows and dividend yield....more on Value investing
Value trap: A investment that looks cheap against valuation ratios or historical prices, but deserves to be....more on value traps
VaR: A measure of the risk of a portfolio; the loss that is unlikely to be exceeded in a given period of time with a given level of confidence....more on VaR
Variable costs: On the other hand variable costs change with sales. Examples of variable costs are raw materials, shipping and depletion....more on Variable costs
Variance: A measure of how much a set of numbers, known or future possibilities, varies...more on variance
Vega: The rate of change of the price of a derivative or portfolio with the volatility of an underlying security...more on vega
Vendor due diligence: Due diligence carried out at the behest of the seller rather than the buyer....more on vendor due diligence
Venture capital: Investment in start-ups or in the expansion of the existing operations of private companies....more on Venture capital
Vertical integration: Integration of ownership along a supply chain...more on vertical integration
Vertical markets: Markets defined by type of customer rather than type of product....more on vertical markets
VOIP: The use of internet protocol networks to carry voice phone calls. Can be less reliable if the network used is not structured for this purpose....more on VOIP
Volatility: A statistical measure of the risk of holding a security; the standard deviation of expected returns on a security....more on volatility
Volatility smile: The variation of implied volatility with strike price....more on volatility smile
Vulture capitalist: Either a venture capitalist who deprives inventors and entrepreneurs of control of their businesses, or an investor who specialises in bottom fishing....more on vulture capitalist
VWAP: The average price at which a security sold in a period (usually the last hour) before the close of a day's trading....more on VWAP
WACC: The weighted average of the rates of return required by all of a company’s sources of capital....more on WACC
Walled garden: Access to a telecoms services restricted to the providers own content....more on Walled garden
Warrants: A security similar to a call option. If a holder exercises a warrant, new shares will be issued to the holder....more on Warrants
Warrant premium: The amount by which the cost of buying and exercising a warrant exceeds the cost of buying the underlying shares directly....more on Warrant premium
Weighted average: A weighted average is more heavily influenced by some of the numbers it is calculated from than others....more on Weighted average
Weighted average cost of capital: The weighted average of the rates of return required by all of a company’s sources of capital....more on Weighted average cost of capital
Weighted moving average: A moving average weighted towards more recent values....more on Weighted moving average
West Texas Intermediate: The US benchmark crude oil; of high quality and produces a lot of petrol....more on West Texas Intermediate
Wet lease: The lease of an aircraft together with crew, with the lessor usually retaining responsibility for maintenance....more on wet lease
White knight: A bidder who offers an alternative to a hostile takeover bid....more on White knight
Wi-Fi: A set of standards for technology allowing computers and other devices to communicate using radio connections instead of cables....more on Wi-Fi
Window dressing: Manipulation of financial numbers, possibly within the letter of accounting rules...more on Window dressing
Winner's curse: The tendency for winning bidders (in an auction) to over-pay....more on winner's curse
Winner-loser effect: A correlation between past and future performance....more on winner-loser effects
WIP: The part of stocks (inventory) that has had some work done on it, but which has not yet been made into goods ready for sale....more on WIP
WLAN: The replacement of cables in computer networks with more convenient radio links....more on WLAN
Work in progress: The part of stocks (inventory) that has had some work done on it, but which has not yet been made into goods ready for sale....more on Work in progress
Working capital: The amount of money that a company has tied up in funding its day to day operations....more on Working capital
Write down: The recognition, in the accounts, of the diminution of the value of an asset....more on Write down
Written down value: The book value of an asset; the value at which the asset is included in the accounts...more on Written down value
XBRL: An electronic format for transferring financial information between different IT systems...more on XBRL
Yankee bond: A eurobond issued in the US by a foreign issuer...more on Yankee bond
Yard: A billion. It can refer to anything, volume or value...more on Yard
Year-on-year: A comparison made between the results for a period with the same period in the previous year....more on Year-on-year
Yellow strip: The best bid and offer prices shown on certain LSE trading screens....more on Yellow strip
Yield: Yield most commonly means either dividend yield or yield to maturity....more on Yield
Yield curve: The pattern of variation of interest rates with time, particularly when depicted as a graph...more on Yield curve
Yield gap: Average dividend yield in a market minus yield on bonds....more on Yield gap
Yield spread: The difference between the yield on a bond and the yield on a similar risk free debt instrument....more on Yield spread
Yield to worst: The lowest of the different measurements of yield on a bond...more on Yield to worst
YoY: A comparison made between the results for a period with the same period in the previous year....more on YoY
Yield to call: The yield on a callable bond, between the present and the earliest date on which it is callable...more on Yield to call
Yield to maturity: The IRR a buyer would receive if they purchased a bond at the current market price....more on Yield to maturity
YTC (Yield to Call): The yield on a callable bond, assuming that it is called at the earliest possible date...more on YTC (Yield to Call)
YTM (Yield to maturity): The IRR a buyer would receive by purchasing a bond at the current market price....more on YTM (Yield to maturity)
Z-score: The Altman z-score is a measure of a company's financial strength that uses a weighted sum of several factors. ....more on the Altman z-score
Z-spread: The return a produces compared to the term structure of risk free returns over its life....more on z-spreads
Zero (zero dividend preference share): Preference shares that pay a lump sum at maturity instead but no annual dividends....more on zeros (zero dividend preference share)
Zero coupon bond: A bond which does not pay interest but it is instead issued at a discount to its face value....more on zero coupon bonds
Zero sum game: A game in which each player can gain only at the expense of others - the total pay-offs are fixed....more on Zero sum game