Moneyterms: S-Z

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