Dictionary


S-Z

Small cap

Stocks with a market value between $250 million to $1 billion.

Scalper

A trader who buys and sell futures, holding the position for only a brief moment.

Sell-side analyst

Analyst employed by brokerage.

Sharp ratio

Measure the risk adjusted performance to standard deviation of returns.

Short interest

Short interest is the total number of stock shares that have been sold short.

Short squeeze

A short squeeze is a rapid increase of stock price pushing short sellers to cover their positions.

Socially responsible investing

An investment approach that includes ethical values and societal concerns with investment decisions.

Soft dollars

The use of commission fess to buy services other than execution services (for example research).

Sole ownership

Owned by one person.

Stop order

Stop orders are similar to market orders, in that they are orders to buy or sell a contract/security at the best available price, but they are only processed if the market reaches a specific price.

Standard deviation

A statistical measure of volatility.

Stock

A stock is an ownership in a corporation and represents a claim on the assets of the company.

Stress testing

A risk management technique in which someone examines the comportment of a portfolio under extreme market conditions.

Swap

A contract calling for the exchange of payment over time in which one payment is fixed and the other is floating.

Tax alpha

Value created by managing effectively tax liabilities.

Time interest earned ratio

Operating income (EBIT) / Annual interest payment

The interest coverage ratio checks if the revenues before taxes and interests are enough to pay at least the interests charge.

Total asset turnover

Sales/Total assets

Indicates the effectiveness of the firm’s use of its total asset base. For example it range about 1 for large capital-intensive industries (like steel, auto).

Top down

Starting an analysis by the macro economy, to the economic sector level, to the industry level and finally to the company level.

Total debt to equity ratio

(Current liabilities + Long-term debt)/Shareholder equity

Turnover

A measure of the trading activity of a portfolio.

VAR

Value at risk, a probability measure of loss potential for a portfolio, a company, a transaction over a specified period of time.

Volatility

The standard deviation underlying asset price.

Yield

Interest rate divided by the current price of a security (ie bond).

Yield curve

A graph that depicts the bond yields of various maturities.

Yield spread

The difference between the yield on a bond and the yield on a default-free security of the same maturity.


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