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 screen An set of criteria (he application of which is usually automated) that produces a short-list of investments for further consideration.…
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 screen An set of criteria (he application of which is usually automated) that produces a short-list of investments for further consideration.…
Stock turnover Annual sales ÷ stocks; measures how well a company coverts stocks into sales.…
Stop limit order A type of stop loss order that essentially becomes a limit order once a price threshold is crossed.…
Stop limit order A stop loss order with a limit on the price at which it will execute.…
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.…
Trading statement A disclosure of performance, typically sales numbers, not usually detailed, but announced well before the 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 (1,000,000,000). 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.…
