sohomghosh/FinRAD_Financial_Readability_Assessment_Dataset

terms stringlengths 1 156	definitions stringlengths 3 4.2k	source stringclasses 15 values	flesch_reading_ease float64 -301.79 121	flesch_kincaid_grade float64 -3.5 55.6	smog_index float64 0 26.5	coleman_liau_index float64 -33.81 51.4	automated_readability_index float64 -6.9 65	dale_chall_readability_score float64 0.1 35.3	linsear_write_formula float64 -0.5 73	gunning_fog float64 0.4 56
SPECULATOR	An individual or firm engaged in SPECULATION in an attempt to generate PROFITS. Speculators are an essential driver of market LIQUIDITY, helping balance or support flows arising from parties that are engaged in HEDGING or ARBITRAGE.	palgrave	27.83	13.9	0	13.69	13.3	12.42	12.5	14.98
SPIDER	See STANDARD AND POOR’S DEPOSITORY RECEIPT.	palgrave	31.55	10.4	0	14.95	11.4	14.46	3	9.07
SPIN-OFF	See DEMERGER.	palgrave	35.61	8.8	0	1.3	7.8	11.63	1	20.8
SPINNING	An illegal practice where BANKS, INVESTMENT BANKS, or SECURITIES FIRMS UNDERWRITING a NEW ISSUE grant executives of favored corporate clients allocations in an attempt to win future CORPORATE FINANCE business.	palgrave	15.65	18.5	0	17.53	21.8	14.07	23	21.33
SPLIT-COUPON BOND	A BOND that functions as a ZERO COUPON BOND for a prespecified period of time and then converts into a standard COUPON- bearing instrument, paying INTEREST on a regular basis.	palgrave	41.03	15	0	10.98	16.5	12.49	20	18.67
SPLIT-OFF	See DEMERGER.	palgrave	35.61	8.8	0	1.3	7.8	11.63	1	20.8
SPONSOR	A BANK that advises a company on an INITIAL PUBLIC OFFERING and arranges all dimensions of the process, including the creation of PROSPECTUS and the nomination of an UNDERWRITING SYNDICATE.	palgrave	24.11	17.4	0	13.88	18.7	11.44	23	21.33
SPOO	The FUTURES CONTRACT on the STANDARD AND POOR’S 500 INDEX, traded via the CHICAGO MERCANTILE EXCHANGE, named after the ticker SPU allocated to one of the quarterly contracts.	palgrave	43.06	14.2	0	12.83	17.3	14.05	17	15.49
SPOT	A transaction in the current, or cash, market. See also MARKET, PRICE, RATE.	palgrave	56.42	7	0	5.63	5	6.39	2.75	5.68
SPOT MARKET	The current, or cash, market for an ASSET, which generally involves SETTLEMENT within 13 days (depending on the underlying asset). Also known as CASH MARKET. See also FORWARD MARKET.	palgrave	53.17	8.3	9.7	10.41	8.4	9.02	5.166667	8.02
SPOT NEXT	The purchase of FOREIGN EXCHANGE for delivery the day after SPOT delivery (which is generally two business days after TRADE date); the delivery price in a spot next deal is adjusted for the extra day. See also TOM NEXT.	palgrave	60.14	9.7	0	8.88	10.2	7.44	12.25	10.88
SPOT PRICE	The price of an ASSET in the current, or cash, market. Also known as CASH PRICE. See also FORWARD PRICE.	palgrave	90.05	2.4	3.1	2.96	1.9	5.55	2.333333	2.68
SPOT RATE	(1) A FOREIGN EXCHANGE RATE in the current, or cash, market.(2)The theoretical rate on a ZERO COUPON BOND, derived from STRIPPING THE YIELD CURVE. (2) Also known as CASH RATE. (2) See also FORWARD RATE.(1)See also BULL SPREAD, BEAR SPREAD. (2) See also EFFECTIVE SPREAD, QUOTED SPREAD, REALIZED SPREAD.	palgrave	38.66	20	0	10.81	27.5	10.58	27.5	22.05
SPREAD RISK	The RISK of loss due to adverse changes between two refer- ence ASSETS with a common link, such as a risk-free asset and a CREDIT-risky asset pegged to the risk-free asset. A subcategory of MARKET RISK.	palgrave	70.13	8	0	8.18	9.4	10.23	8.5	8.31
SPRING LOADING	A form of financial manipulation where the pre- ACQUISITION EARNINGS of a company to be purchased are understated in order to give the acquiring company an earnings boost and the appearance of financial strength following the acquisition.	palgrave	17	20.1	0	14.69	22.8	10.17	29.5	21.29
SPV	See SPECIAL-PURPOSE VEHICLE.	palgrave	9.21	12.7	0	20.83	20.9	19.58	2.5	14.53
SQUARE	(1) A RISK position that has been neutralized, i.e., an offset between a LONG POSITION and a SHORT POSITION, or an UNDERLYING ASSET or exposure and its associated HEDGE. (2) The process of neutralizing the risk of a position.	palgrave	31.89	18.5	0	9.47	20.6	11.24	28.5	21.75
SQUARE ROOT RULE	A statistical property used in financial mathematics indicating that the STANDARD DEVIATION of the changes in a market vari- able, such as a STOCK or BOND price, is proportional to the square root of time.	palgrave	35.95	16.9	0	10.98	19.1	10.34	24.5	22
SQUEEZE	A lack of sufficient acceptable ASSETS deliverable into an EXCHANGE-TRADED DERIVATIVE or as cover for a SHORT POSITION, which can lead to price distortions. See also SHORT .	palgrave	40.85	10.9	0	12.64	10.8	9.57	10.5	14.29
SREP	See SUPERVISORY REVIEW AND EVALUATION PROCESS.	palgrave	6.17	13.9	0	17.85	13.7	11.83	4	15.73
SrL	SOCIETA A RESPONSABILITA LIMITATA.	palgrave	-76.41	24.9	0	20.3	17.1	15.68	4	31.6
SRO	See SELF-REGULATORY ORGANIZATION.	palgrave	-160	36.3	0	30.52	28.7	14.31	2.5	27.87
SSE	See SHANGHAI STOCK EXCHANGE.	palgrave	75.88	3.7	0	11.6	10	7.78	1	1.6
STACK AND ROLL	See ROLLING HEDGE.	palgrave	119.19	-2.7	0	3.43	5.2	14.31	0.5	1.2
STAG	See FLIPPER.	palgrave	77.91	2.9	0	-1.61	5.5	11.63	0	0.8
STAGFLATION	A phenomenon where INFLATION is increasing while eco- nomic output is stagnant or declining; UNEMPLOYMENT may also be rising at the same time.	palgrave	39.67	13.4	0	12.54	14.7	10.96	16.5	17.9
STAGGERED BOARD	An ANTITAKEOVER DEFENSE tactic where an exter- nal TENDER OFFER for a company automatically triggers a change in the com- pany’s DIRECTOR reelection policy, from annual to staggered (e.g., only a third of directors reelected every year, so that the entire board can only be replaced over a 3-year period). This means a suitor will be unable to engage in a PROXY CONTEST to remove the board and undo POISON PILLS or other defenses within a 1-year time frame.	palgrave	31.38	18.7	0	10.17	20.9	11.99	25.25	20.86
STAGS	Acronym for Sterling Transfer Accruing Government Security, a STRIP SECURITY in the UK GILT sector.	palgrave	30.87	12.7	0	14.2	12.8	12.8	11.5	11.33
STAKEHOLDERS	From a GOVERNANCE perspective, the group of parties that have a legal, financial, and/or social interest in a company and its success, and are impacted directly or indirectly by the actions a company takes. See also DIRECT , INDIRECT .	palgrave	35.27	13.1	0	11.43	12.4	10.4	15	16.02
STALKING HORSE	An INVESTOR that makes an initial BID for a bankrupt company’s ASSETS. Once the stalking horse bid is submitted, other investors can join in the bidding process, but cannot bid below the initial bid.	palgrave	71.14	7.6	0	10.03	10.1	9.59	8.5	9.15
STAMP DUTY	A TAX levied by authorities on specific types of financial trans- actions. The duty may be applied to an ISSUER of SECURITIES in the PRIMARY MARKET, a buyer and/or seller of securities in the SECONDARY MARKET, or a BORROWER of funds through a LOAN or other CREDIT mechanism.	palgrave	47.12	12.7	0	9.7	12.8	10.75	16	15.43
STANDARD DEVIATION	A measure of RISK, variability, or dispersion that indicates the magnitude by which an outcome will differ from the EXPECTED VALUE, or the degree to which an observation deviates from the MEAN of a distribution. It is generally computed via:where xi is an observation, μ is the mean, and N is the number of observations. See also VARIANCE.	palgrave	43.43	12	14.6	10.04	11.1	10.04	13.666667	15.31
STANDARD RATE	The flat rate of VALUE-ADDED TAX (VAT) that is applied to any good or service in a VAT system unless it is specifically exempt, which varies by country.	palgrave	59.98	11.8	0	7.9	13.6	8.97	15	12.63
STANDARDIZED APPROACH	A method of computing CREDIT RISK expo- sures under PILLAR I of BASLE II, which follows the framework established under the original BASLE ACCORD, where various classes of RISKS are assigned RISK WEIGHTS to determine capital requirements.	palgrave	33.92	17.7	0	14.34	22.8	14.43	25.5	21.29
STANDBY AGREEMENT	(1) An agreement where the UNDERWRITERS of a RIGHTS ISSUE agree to purchase any unsold SHARES after SHAREHOLDERS exercise their PREEMPTIVE RIGHTS, thereby ensuring the company gains the full amount of anticipated proceeds. (2) Agreements between the INTERNATIONAL MONETARY FUND and its member countries that allow themembers to immediately access supplemental funds for emergency purposes.(1) Also known as STANDBY UNDERWRITING.	palgrave	-14.81	30.2	0	18.29	37.5	14.77	45	33.33
STANDBY CREDIT	See STANDBY LETTER OF CREDIT.	palgrave	66.4	5.2	0	6.12	4.6	10.2	1.5	2
STANDBY LETTER OF CREDIT	A contingent LETTER OF CREDIT obliga- tion of the issuing BANK that becomes effective only if the drawing customer fails to perform on a specific transaction. If performance does not occur as planned, the bank automatically pays the BENEFICIARY of the letter of credit and then attempts to recover CASH FLOWS from the customer. Also known as STANDBY CREDIT. See also CONFIRMED LETTER OF CREDIT, DIRECT PAY LETTER OF CREDIT, TRANSFERABLE LETTER OF CREDIT, IRREVOCABLE LETTER OF CREDIT.LIABILITY.	palgrave	34.76	13.3	13	13	13.5	9.66	12.75	13.95
STANDBY UNDERWRITING	See STANDBY AGREEMENT.	palgrave	59.97	5.6	0	11.15	11.5	14.31	0.5	1.2
STANDING ORDER	Authorization granted by an ACCOUNT holder to a BANK to allow for recurring direct DEBITS to be made in payment of a good or service.	palgrave	54.56	11.9	0	8.07	11.6	7.4	14.5	13.2
STAPLED STOCK	See PAIRED SHARES.	palgrave	119.19	-2.7	0	3.43	5.2	14.31	0.5	1.2
STATEMENT OF CASH FLOWS	A key FINANCIAL STATEMENT produced by a company that reflects its CASH FLOW position. This statement draws together items from the INCOME STATEMENT and BALANCE SHEET to reveal the nature of the firm’s cash sources and uses, and its net cash position at the end of a reporting period. The basic cash flow statement is generally divided into three segments: OPERATING CASH FLOW, INVESTING CASH FLOW, and FINANCING CASH FLOW, though this can vary somewhat by country,accounting regime, and/or industry sector. The summarized cash flow state- ment takes the following general form:Also known as CASH FLOW STATEMENT.	palgrave	46.81	12.8	15.2	12.94	15.7	9.89	16.625	14.67
STATISTICAL ARBITRAGE	A quantitative ARBITRAGE strategy where an INVESTOR or HEDGE FUND manager makes use of mathematical and statistical techniques to analyze certain indicators of individual STOCKS	palgrave	3.8	18.9	0	18.51	19.9	13.72	21.5	22.8
STATUTORY ACCOUNTS	ACCOUNTS or FINANCIAL STATEMENTS that must be prepared and submitted as indicated under relevant law statutes.	palgrave	38.32	11.9	0	16.53	14.5	12.33	12	16.4
STATUTORY AUDIT	An AUDIT that must be performed on a company or other organization as indicated under relevant law statutes.	palgrave	36.28	12.7	0	11.42	11.4	9.79	13	13.87
STATUTORY BOND	A SURETY BOND that a government authority or REGULATOR may require contractors, businesses, or FIDUCIARIES to post for work performance affecting the public interest. The intent of the statutory bond is to ensure adequate third party financial protection in the event the contract party fails to perform as intended.	palgrave	29.69	15.2	0	14.28	16.6	11.94	19.25	20.41
STATUTORY DAMAGES	DAMAGES awarded to a plaintiff that are limited by some relevant statute. See also LIQUIDATED DAMAGES, UNLIQUIDATED DAMAGES.	palgrave	36.96	10.3	0	14.47	11	11.1	5.5	12.49
STATUTORY PROFIT	In INSURANCE, a measure of an INSURER’s profitabil- ity, typically defined as earned PREMIUMS less total EXPENSES and losses paid.	palgrave	34.26	13.5	0	13.75	14.7	13.31	15	18
STATUTORY RESERVE	A RESERVE that INSURERS are required to maintain to ensure they can withstand potential losses from RISKS they have underwrit- ten and can remain solvent. Methods of computing the minimum amount of the statutory reserve vary, although most are based on loss frequency calculations.	palgrave	49.15	11.9	0	13.58	15.1	11.9	15	16.07
STATUTORY TAX RATE	The legal mandated TAX rate applied to INCOME or sales. In many jurisdictions multiple statutory tax rates are applied to dif- ferent levels of income, while a single statutory tax rate is applied to sales (e.g., a flat sales tax). See also AVERAGE TAX RATE, EFFECTIVE TAX RATE,MARGINAL TAX RATE.	palgrave	62.98	8.6	11.9	9.68	10.2	9.52	10.666667	12.28
STATUTORY VOTING	The conventional corporate method of assigning one SHAREHOLDER vote to each share of COMMON STOCK and requir- ing that each vote be apportioned equally to DIRECTOR nominees. See alsoCUMULATIVE VOTING.	palgrave	39.33	11.5	0	14.61	12.9	11.75	11.5	16.67
STEP-DOWN BOND	A BOND (or NOTE) that pays a decreasing COUPON during the life of the SECURITY. The security may be putable by the INVESTOR at predefined dates. See also STEP-UP BOND.	palgrave	78.25	4.8	9.7	6.76	5.2	8.87	5.333333	8
STEP-UP BOND	A BOND (or NOTE) that pays an increasing COUPON if the SECURITY is not called by the ISSUER. The step-up may occur on one or sev- eral predefined dates. See also STEP-DOWN BOND.	palgrave	77.23	5.2	8.8	5.61	4.7	9.92	5.5	8.04
STERILIZATION	Action by a CENTRAL BANK or monetary authority to increase or decrease a nation’s MONEY SUPPLY to offset any changes caused by active intervention in the FOREIGN EXCHANGE markets. If a country has a greater amount of foreign exchange RESERVES as a result of its intervention activities, its money supply will increase and cause the central bank to sell GOVERNMENT BONDS as an offset; if reserves decline and the money supply contracts, the cen- tral bank will purchase government bonds. See also DIRTY FLOAT.	palgrave	43.06	14.2	11.9	11.9	16.4	9.72	16.333333	13.1
STICKINESS	(1) The tendency for a financial indicator, such as INFLATION and UNEMPLOYMENT, to remain at a particular level, despite a changing market environment. (2) The degree to which DEMAND DEPOSITS placed by retail customers with a BANK remain in situ in the face of a changing environment (e.g., more alternatives, higher fees, lower deposit rates).	palgrave	7.19	25.9	0	12.49	30.9	13.54	36.5	27.82
STICKY DEAL	See HUNG DEAL.	palgrave	119.19	-2.7	0	-4.29	-1.2	0.15	0.5	1.2
STOCHASTIC PROCESS	A mathematical process used to describe the con- tinuous and dynamic movement of ASSET prices. Certain OPTION pricing mod- els use a stochastic process to generate values. See also MARKOV PROCESS.	palgrave	61.02	7.3	10.5	11.34	8.9	12.3	5.833333	10.57
STOCK	(1) See COMMON , PREFERRED . (2) In the United Kingdom, a FIXED INTEREST SECURITY. (3) See INVENTORY. (3) See alsoFIRST IN FIRST OUT, LAST IN FIRST OUT.	palgrave	45.09	13.4	0	7.55	14.2	11	17	15.02
STOCK CERTIFICATE	A nonnegotiable physical certificate that denotes SHARE ownership in a PUBLIC COMPANY. See also SHARE CERTIFICATE.	palgrave	37.98	10	0	15.5	11.7	8.97	6	13.2
STOCK DIVIDEND	A regular corporate DIVIDEND that is payable to COMMON STOCK SHAREHOLDERS of record in the form of additionalSHARES of stock rather than cash. Also known as ACCUMULATING SHARE, BONUS ISSUE, BONUS SHARE. See also CASH DIVIDEND.	palgrave	59.3	8	11.9	11.82	9.6	8.62	7.333333	11.47
STOCK EXCHANGE	An EXCHANGE that specializes in TRADING of STOCKS and other EQUITY-related instruments (such as INDEXES, stock- based EXCHANGE-TRADED FUNDS, and OPTIONS). The exchange may oper- ate through physical or electronic mechanisms and is typically regulated by the country’s financial REGULATORS. See also STOCK MARKET.	palgrave	31.17	12.6	14.6	16.12	14.7	11.54	11.333333	16.79
STOCK INDEX	An INDEX that includes a large number of quoted STOCKS, and which serves as a reference BENCHMARK for a country’s stock market. In many cases stock indexes are directly traded through DERIVATIVES and EXCHANGE-TRADED FUNDS, and can serve as a convenient INVESTMENT and RISK MANAGEMENT tool. Also known as SHARE INDEX.	palgrave	54.22	9.9	12.5	12	11.7	10.05	11.166667	12.29
STOCK LOAN	A form of SECURED LENDING within the class of EQUITY FINANCE where the BORROWER posts SHARES to the LENDER in exchange for cash. A HAIRCUT is typically applied in order to protect against market movements in the price of the shares which might render some portion of the loan unsecured.	palgrave	63.02	10.7	0	10.28	13.4	9.61	14.5	13.2
STOCK OPTION	A CALL OPTION or a PUT OPTION with a company’s STOCK as the UNDERLYING reference. Also known as SHARE OPTION.	palgrave	61.33	7.2	0	6.76	4.8	7.29	5.5	10
STOCK PICKING	An INVESTMENT strategy where a PORTFOLIO MANAGER selects individual STOCKS based on FUNDAMENTAL ANALYSIS or TECHNICAL ANALYSIS in an attempt to outperform a broad INDEX orBENCHMARK.	palgrave	2.79	19.3	0	17.58	19.8	13.43	24	24.25
STOCK PRICE	The quoted value of the STOCK of an issuing company.	palgrave	61.33	7.2	0	5.6	3.8	7.29	6	8
STOCK REPURCHASE	See STOCK BUYBACK.	palgrave	93.81	0.9	0	3.43	5.2	9.05	0.5	1.2
STOCK SYMBOL	An alphanumeric code comprised of several characters which uniquely identifies a PUBLIC COMPANY for TRADING purposes on anEXCHANGE.	palgrave	19.37	15	0	18.85	17.4	12.42	15	16.09
STOP LIMIT ORDER	An ORDER to buy or sell SECURITIES at a limit price once the stop level is reached, rather than the market price characteristic of a traditional STOP ORDER.	palgrave	51.52	13	0	9.35	14.3	7.84	17	15.49
STOP LOSS ORDER	A STOP ORDER to sell a SECURITY at the market once a particular price level is reached. The stop loss does not guarantee a specific EXECUTION price; it simply invokes an order to sell at the stop level.	palgrave	60.65	9.5	0	7.43	8.5	7.9	12	12.86
STOP LOSS REINSURANCE	A REINSURANCE CONTRACT that protects the CEDING INSURER against an aggregate amount of CLAIMS in excess of a spe- cified percentage of earned PREMIUMS; stop loss reinsurance effectively pro- tects the insurer against the possibility that the sum of individual losses from the INSURANCE it has UNDERWRITTEN will be greater than expected. In most instances the REINSURER is only liable up to a defined percentage of the losses or a maximum value amount.	palgrave	25.97	18.7	0	13.01	21.3	11.5	26.25	21.72
STOP OUT PRICE	The lowest price at which GOVERNMENT BILLS are sold in an AUCTION MARKET process.	palgrave	74.19	6.4	0	9.91	8.5	8.84	7	5.6
STOPPED OUT	A situation when the market price of a given SECURITY or ASSET moves below a particular level and triggers a STOP LOSS ORDER.	palgrave	39.67	13.4	0	8.71	11.2	8.9	14.5	14.42
STORY PAPER	A SECURITY with unusual characteristics that requires detailed explanations or disclosure in order to attract INVESTORS. Story paper must occasionally be sold at a higher YIELD (or a larger price DISCOUNT) than comparable “conventional” securities as a result of its unique or complex qualities.Payoff profile of long straddle positionPayoff profile of short straddleSee also STRANGLE.	palgrave	9.72	18.7	0	17.41	20.7	12.75	19.75	19.73
STRAIGHT BOND	(1) A NONCALLABLE BOND. (2) In the EUROMARKETS, a bond with a FIXED RATE COUPON. (3) A GILT with a BULLET repayment.	palgrave	74.53	8.3	0	5.11	9.9	11.9	13	12.44
STRAIGHT-LINE DEPRECIATION	A DEPRECIATION mechanism that applies equal reductions in value to a depreciable ASSET based on the expected life of the asset. Straight-line methods are commonly applied to FIXED ASSETS that are not expected to become obsolete before the end of their economically useful lives. See also ACCELERATED DEPRECIATION.Payoff profile of long stranglePayoff profile of short strangle	palgrave	27.11	14.1	14.6	15.55	14.9	10.2	13.333333	14.62
STRAP	An OPTION SPREAD designed to take advantage of VOLATILITY. A LONG strap, which is created through a long PUT OPTION and two long CALLOPTIONS with the same STRIKE PRICE, is characterized by unlimited profit potential and limited downside RISK; the short strap, simply a short put and two short calls with identical strikes, has limited profit potential and unlim- ited downside risk. See also STRIP.	palgrave	57.91	10.6	14.1	11.72	13.6	9.57	14.5	14.22
STRATEGIC ASSET ALLOCATION	One of two phases in the ASSET ALLOCATION process, where an INVESTOR or INVESTMENT MANAGER develops a weighting of asset classes for the PORTFOLIO that is intended to be preserved over a long-term horizon. By doing so, the manager is effectively defining a BENCHMARK. See also TACTICAL ASSET ALLOCATION.	palgrave	46.47	10.8	13.6	11.89	11.2	10.25	11.5	12.23
STREET	[See WALL .	palgrave	77.91	2.9	0	-10.31	0.8	0.1	0.5	0.8
STREET NAME	Client-owned SECURITIES that are registered to a BANK, BROKER/DEALER, or third party NOMINEE rather than the client. Securities held in street name eliminate the need to physically deliver secur- ities to the client.	palgrave	46.27	10.9	0	13.51	13.1	10.2	12.25	13.87
STRESS TESTING	See SCENARIO ANALYSIS.	palgrave	34.59	9.2	0	11.15	11.5	14.31	1.5	14.53
STRICT LIABILITY	A LIABILITY motion requiring that the plaintiff need only prove harm in a specific manner in order to collect damages and need not demonstrate the methods, motivations, or intent leading to the damage.	palgrave	29.52	17.3	0	12.49	19.2	11.49	20.5	18.05
STRIKE	See PRICE.	palgrave	77.91	2.9	0	-7.41	0.8	0.1	0	0.8
STRIKE PRICE	The agreed price, rate, or level at which an OPTION begins creating value for the buyer and a LIABILITY for the seller. When the market price exceeds the strike price for a CALL OPTION, or falls below the strike for a PUT OPTION, INTRINSIC VALUE is created. Also known as EXERCISE PRICE, STRIKE, STRIKING PRICE.	palgrave	61.36	9.2	10.5	8.88	9.7	8.56	10.833333	10.96
STRIKING PRICE	See STRIKE PRICE.	palgrave	119.19	-2.7	0	1.52	3.6	9.05	0.5	1.2
STRIP HEDGE	A HEDGE based on the use of sequential OVER-THE- COUNTER or EXCHANGE-traded CONTRACTS that match or approximate future CASH FLOWS associated with the underlying RISK being hedged. A successful strip hedge can eliminate DIRECTIONAL RISK and CURVE RISK. See also ROLLING HEDGE.	palgrave	57.27	8.8	12.5	13.62	11.8	10.35	8.666667	12.27
STRIPPING	The process of separating a BOND’s CORPUS and INTEREST COUPONS so that they can be traded separately. Stripping is done by gov- ernment agencies and FINANCIAL INSTITUTIONS, often by creating separate TRUST vehicles that hold the original SECURITIES and issue new, decomposed securities. See also RECONSTITUTION.	palgrave	30.57	12.8	15	14.9	13.5	11.6	12	15.69
STRIPS	Acronym for Separate Trading of Registered Interest and Principal Securities, a STRIP SECURITY in the US marketplace	palgrave	11.92	15.8	0	16.18	14.8	11.91	15.5	20.92
STRONG HANDS	A holder of an EXCHANGE-TRADED DERIVATIVE that expects to receive the UNDERLYING ASSET at EXPIRY or EXERCISE. See also WEAK HANDS	palgrave	43.9	9.7	0	10.82	8.3	10.17	6.25	9.91
STRUCTURAL MODEL	A form of CREDIT DEFAULT MODEL that defines the PROBABILITY of COUNTERPARTY DEFAULT in terms of a firm’s ASSETS, LIABILITIES, and CAPITAL structure. Default occurs when a boundary value, such as a liability or negative NET WORTH threshold, is reached. See alsoINTENSITY MODEL.	palgrave	31.58	12.4	11.9	12.75	11.4	10.96	8.5	11.3
STRUCTURED FINANCE	The general category of financing and RISK MANAGEMENT solutions offered by BANKS to institutional clients seeking to achieve specific results that cannot be readily met with standard financial products. Structured finance can involve combinations of LOANS, BONDS, and DERIVATIVES, as well as SECURITIZATION techniques and off-balancesheet vehicles, to achieve goals of RISK TRANSFER, liquidity management, and/or funding. See also ASSET-BACKED SECURITY, COLLATERALIZED DEBT OBLIGATION, FINANCIAL ENGINEERING.	palgrave	6.84	17.8	18.6	20.42	21.2	14.06	18.333333	19.1
STUB	(1) The NEARBY FUTURES CONTRACT on EURODOLLARS. (2) A SHORT COUPON on a NOTE or a BOND.	palgrave	79.6	6.4	0	4.58	6.8	10.98	8.5	9.15
STUCK DEAL	See HUNG DEAL	palgrave	119.19	-2.7	0	-4.29	-2.7	0.15	0.5	1.2
STYLE DRIFT	A phenomenon when a HEDGE FUND or INVESTMENT COMPANY deviates from its original INVESTMENT focus and expertise in an attempt to find new opportunities to deploy CAPITAL. Style drift can intro- duce additional RISK into a fund, as managers may lack the requisite base of knowledge needed to effectively manage the ASSETS.	palgrave	28.17	15.8	0	12.6	15.9	12.21	19	17.32
SUBINVESTMENT GRADE	A CREDIT RATING designation applied to any ISSUER of SECURITIES that is rated below BBB- by Standard and Poor’s or Baa3 by Moody’s Investors Services. Subinvestment-grade credits have weaker finan- cial profiles than INVESTMENT GRADE credits, and thus a greater likelihood of encountering FINANCIAL DISTRESS leading to DEFAULT.SUBORDINATED PERPETUAL DEBT.	palgrave	20.72	16.6	0	17.7	19.9	14.98	17	17.2
SUBORDINATED PERPETUAL DEBT	A COUPON-bearing BOND that has no PRINCIPAL REDEMPTION feature and ranks junior to all other DEBT CLAIMS.The bond functions as permanent FINANCING or quasi-EQUITY (although it ranks senior to COMMON STOCK). See also SUBORDINATED DEBT.ABSOLUTE PRIORITY RULE.	palgrave	35.78	12.9	0	16.13	15.9	13.09	13.75	16.05
SUBPRIME LOAN	A LOAN granted to a weak individual or corporate BORROWER, including one that may have had a history of prior loan delin- quency or DEFAULT. Subprime loans, which are generally secured against a spe- cific ASSET (e.g., a residence, commercial property), typically have much lower LOAN-TO-VALUE ratios than conventional loans in order to protect the lender in the event of default. Also known as B & C LOAN, NONPRIME LOAN.	palgrave	39.67	13.4	14.6	11.09	14.1	11.64	15.666667	15
SUBPRIME MORTGAGE	A residential MORTGAGE that is granted to a BORROWER that has a relatively weak CREDIT standing, including borrowers that may have previously DEFAULTED on other DEBT obligations. Subprime mortgages may be characterized by higher rates to compensate for poorer credit quality.	palgrave	25.29	14.8	0	15.55	15.8	12.74	15.75	18.93
SUBROGATION	(1) The transfer of rights of loss recovery from the INSURED to the INSURER, allowing the insurer to seek its own restitution. The insured, whose rights are transferred, is known as the subrosor; the insurer accepting the subrogated rights is known as the subrosee. (2) The right to substitute one CREDIT for another in settling a CLAIM or transferring ownership.	palgrave	41.03	15	0	11.62	17.4	10.39	21	18
SUBSCRIBER	A party to an initial SUBSCRIPTION of SHARES.	palgrave	71.82	5.2	0	7.21	4.9	9.95	4	8.2
SUBSCRIPTION	An offer to purchase SECURITIES, exercisable for a specific period of time.	palgrave	25.46	12.7	0	11.82	9.7	10.81	9	18.13

SPECULATOR

An individual or firm engaged in SPECULATION in an attempt to generate PROFITS. Speculators are an essential driver of market LIQUIDITY, helping balance or support flows arising from parties that are engaged in HEDGING or ARBITRAGE.

palgrave

0

27.83

13.9

0

13.69

13.3

12.42

12.5

14.98

SPIDER

See STANDARD AND POOR’S DEPOSITORY RECEIPT.

palgrave

0

31.55

10.4

0

14.95

11.4

14.46

3

9.07

SPIN-OFF

See DEMERGER.

palgrave

0

35.61

8.8

0

1.3

7.8

11.63

1

20.8

SPINNING

An illegal practice where BANKS, INVESTMENT BANKS, or SECURITIES FIRMS UNDERWRITING a NEW ISSUE grant executives of favored corporate clients allocations in an attempt to win future CORPORATE FINANCE business.

palgrave

0

15.65

18.5

0

17.53

21.8

14.07

23

21.33

SPLIT-COUPON BOND

A BOND that functions as a ZERO COUPON BOND for a prespecified period of time and then converts into a standard COUPON- bearing instrument, paying INTEREST on a regular basis.

palgrave

0

41.03

15

0

10.98

16.5

12.49

20

18.67

SPLIT-OFF

See DEMERGER.

palgrave

0

35.61

8.8

0

1.3

7.8

11.63

1

20.8

SPONSOR

A BANK that advises a company on an INITIAL PUBLIC OFFERING and arranges all dimensions of the process, including the creation of PROSPECTUS and the nomination of an UNDERWRITING SYNDICATE.

palgrave

0

24.11

17.4

0

13.88

18.7

11.44

23

21.33

SPOO

The FUTURES CONTRACT on the STANDARD AND POOR’S 500 INDEX, traded via the CHICAGO MERCANTILE EXCHANGE, named after the ticker SPU allocated to one of the quarterly contracts.

palgrave

0

43.06

14.2

0

12.83

17.3

14.05

17

15.49

SPOT

A transaction in the current, or cash, market. See also MARKET, PRICE, RATE.

palgrave

0

56.42

7

0

5.63

5

6.39

2.75

5.68

SPOT MARKET

The current, or cash, market for an ASSET, which generally involves SETTLEMENT within 13 days (depending on the underlying asset). Also known as CASH MARKET. See also FORWARD MARKET.

palgrave

0

53.17

8.3

9.7

10.41

8.4

9.02

5.166667

8.02

SPOT NEXT

The purchase of FOREIGN EXCHANGE for delivery the day after SPOT delivery (which is generally two business days after TRADE date); the delivery price in a spot next deal is adjusted for the extra day. See also TOM NEXT.

palgrave

0

60.14

9.7

0

8.88

10.2

7.44

12.25

10.88

SPOT PRICE

The price of an ASSET in the current, or cash, market. Also known as CASH PRICE. See also FORWARD PRICE.

palgrave

0

90.05

2.4

3.1

2.96

1.9

5.55

2.333333

2.68

SPOT RATE

(1) A FOREIGN EXCHANGE RATE in the current, or cash, market.(2)The theoretical rate on a ZERO COUPON BOND, derived from STRIPPING THE YIELD CURVE. (2) Also known as CASH RATE. (2) See also FORWARD RATE.(1)See also BULL SPREAD, BEAR SPREAD. (2) See also EFFECTIVE SPREAD, QUOTED SPREAD, REALIZED SPREAD.

palgrave

0

38.66

20

0

10.81

27.5

10.58

27.5

22.05

SPREAD RISK

The RISK of loss due to adverse changes between two refer- ence ASSETS with a common link, such as a risk-free asset and a CREDIT-risky asset pegged to the risk-free asset. A subcategory of MARKET RISK.

palgrave

0

70.13

8

0

8.18

9.4

10.23

8.5

8.31

SPRING LOADING

A form of financial manipulation where the pre- ACQUISITION EARNINGS of a company to be purchased are understated in order to give the acquiring company an earnings boost and the appearance of financial strength following the acquisition.

palgrave

0

17

20.1

0

14.69

22.8

10.17

29.5

21.29

SPV

See SPECIAL-PURPOSE VEHICLE.

palgrave

0

9.21

12.7

0

20.83

20.9

19.58

2.5

14.53

SQUARE

(1) A RISK position that has been neutralized, i.e., an offset between a LONG POSITION and a SHORT POSITION, or an UNDERLYING ASSET or exposure and its associated HEDGE. (2) The process of neutralizing the risk of a position.

palgrave

0

31.89

18.5

0

9.47

20.6

11.24

28.5

21.75

SQUARE ROOT RULE

A statistical property used in financial mathematics indicating that the STANDARD DEVIATION of the changes in a market vari- able, such as a STOCK or BOND price, is proportional to the square root of time.

palgrave

0

35.95

16.9

0

10.98

19.1

10.34

24.5

22

SQUEEZE

A lack of sufficient acceptable ASSETS deliverable into an EXCHANGE-TRADED DERIVATIVE or as cover for a SHORT POSITION, which can lead to price distortions. See also SHORT .

palgrave

0

40.85

10.9

0

12.64

10.8

9.57

10.5

14.29

SREP

See SUPERVISORY REVIEW AND EVALUATION PROCESS.

palgrave

0

6.17

13.9

0

17.85

13.7

11.83

4

15.73

SrL

SOCIETA A RESPONSABILITA LIMITATA.

palgrave

0

-76.41

24.9

0

20.3

17.1

15.68

4

31.6

SRO

See SELF-REGULATORY ORGANIZATION.

palgrave

0

-160

36.3

0

30.52

28.7

14.31

2.5

27.87

SSE

See SHANGHAI STOCK EXCHANGE.

palgrave

0

75.88

3.7

0

11.6

10

7.78

1

1.6

STACK AND ROLL

See ROLLING HEDGE.

palgrave

0

119.19

-2.7

0

3.43

5.2

14.31

0.5

1.2

STAG

See FLIPPER.

palgrave

0

77.91

2.9

0

-1.61

5.5

11.63

0

0.8

STAGFLATION

A phenomenon where INFLATION is increasing while eco- nomic output is stagnant or declining; UNEMPLOYMENT may also be rising at the same time.

palgrave

0

39.67

13.4

0

12.54

14.7

10.96

16.5

17.9

STAGGERED BOARD

An ANTITAKEOVER DEFENSE tactic where an exter- nal TENDER OFFER for a company automatically triggers a change in the com- pany’s DIRECTOR reelection policy, from annual to staggered (e.g., only a third of directors reelected every year, so that the entire board can only be replaced over a 3-year period). This means a suitor will be unable to engage in a PROXY CONTEST to remove the board and undo POISON PILLS or other defenses within a 1-year time frame.

palgrave

0

31.38

18.7

0

10.17

20.9

11.99

25.25

20.86

STAGS

Acronym for Sterling Transfer Accruing Government Security, a STRIP SECURITY in the UK GILT sector.

palgrave

0

30.87

12.7

0

14.2

12.8

11.5

11.33

STAKEHOLDERS

From a GOVERNANCE perspective, the group of parties that have a legal, financial, and/or social interest in a company and its success, and are impacted directly or indirectly by the actions a company takes. See also DIRECT , INDIRECT .

palgrave

0

35.27

13.1

0

11.43

12.4

10.4

15

16.02

STALKING HORSE

An INVESTOR that makes an initial BID for a bankrupt company’s ASSETS. Once the stalking horse bid is submitted, other investors can join in the bidding process, but cannot bid below the initial bid.

palgrave

0

71.14

7.6

0

10.03

10.1

9.59

8.5

9.15

STAMP DUTY

A TAX levied by authorities on specific types of financial trans- actions. The duty may be applied to an ISSUER of SECURITIES in the PRIMARY MARKET, a buyer and/or seller of securities in the SECONDARY MARKET, or a BORROWER of funds through a LOAN or other CREDIT mechanism.

palgrave

0

47.12

12.7

0

9.7

12.8

10.75

16

15.43

STANDARD DEVIATION

A measure of RISK, variability, or dispersion that indicates the magnitude by which an outcome will differ from the EXPECTED VALUE, or the degree to which an observation deviates from the MEAN of a distribution. It is generally computed via:where xi is an observation, μ is the mean, and N is the number of observations. See also VARIANCE.

palgrave

0

43.43

12

14.6

10.04

11.1

10.04

13.666667

15.31

STANDARD RATE

The flat rate of VALUE-ADDED TAX (VAT) that is applied to any good or service in a VAT system unless it is specifically exempt, which varies by country.

palgrave

0

59.98

11.8

0

7.9

13.6

8.97

15

12.63

STANDARDIZED APPROACH

A method of computing CREDIT RISK expo- sures under PILLAR I of BASLE II, which follows the framework established under the original BASLE ACCORD, where various classes of RISKS are assigned RISK WEIGHTS to determine capital requirements.

palgrave

0

33.92

17.7

0

14.34

22.8

14.43

25.5

21.29

STANDBY AGREEMENT

(1) An agreement where the UNDERWRITERS of a RIGHTS ISSUE agree to purchase any unsold SHARES after SHAREHOLDERS exercise their PREEMPTIVE RIGHTS, thereby ensuring the company gains the full amount of anticipated proceeds. (2) Agreements between the INTERNATIONAL MONETARY FUND and its member countries that allow themembers to immediately access supplemental funds for emergency purposes.(1) Also known as STANDBY UNDERWRITING.

palgrave

0

-14.81

30.2

0

18.29

37.5

14.77

45

33.33

STANDBY CREDIT

See STANDBY LETTER OF CREDIT.

palgrave

0

66.4

5.2

0

6.12

4.6

10.2

1.5

2

STANDBY LETTER OF CREDIT

A contingent LETTER OF CREDIT obliga- tion of the issuing BANK that becomes effective only if the drawing customer fails to perform on a specific transaction. If performance does not occur as planned, the bank automatically pays the BENEFICIARY of the letter of credit and then attempts to recover CASH FLOWS from the customer. Also known as STANDBY CREDIT. See also CONFIRMED LETTER OF CREDIT, DIRECT PAY LETTER OF CREDIT, TRANSFERABLE LETTER OF CREDIT, IRREVOCABLE LETTER OF CREDIT.LIABILITY.

palgrave

0

34.76

13.3

13

13.5

9.66

12.75

13.95

STANDBY UNDERWRITING

See STANDBY AGREEMENT.

palgrave

0

59.97

5.6

0

11.15

11.5

14.31

0.5

1.2

STANDING ORDER

Authorization granted by an ACCOUNT holder to a BANK to allow for recurring direct DEBITS to be made in payment of a good or service.

palgrave

0

54.56

11.9

0

8.07

11.6

7.4

14.5

13.2

STAPLED STOCK

See PAIRED SHARES.

palgrave

0

119.19

-2.7

0

3.43

5.2

14.31

0.5

1.2

STATEMENT OF CASH FLOWS

A key FINANCIAL STATEMENT produced by a company that reflects its CASH FLOW position. This statement draws together items from the INCOME STATEMENT and BALANCE SHEET to reveal the nature of the firm’s cash sources and uses, and its net cash position at the end of a reporting period. The basic cash flow statement is generally divided into three segments: OPERATING CASH FLOW, INVESTING CASH FLOW, and FINANCING CASH FLOW, though this can vary somewhat by country,accounting regime, and/or industry sector. The summarized cash flow state- ment takes the following general form:Also known as CASH FLOW STATEMENT.

palgrave

0

46.81

12.8

15.2

12.94

15.7

9.89

16.625

14.67

STATISTICAL ARBITRAGE

A quantitative ARBITRAGE strategy where an INVESTOR or HEDGE FUND manager makes use of mathematical and statistical techniques to analyze certain indicators of individual STOCKS

palgrave

0

3.8

18.9

0

18.51

19.9

13.72

21.5

22.8

STATUTORY ACCOUNTS

ACCOUNTS or FINANCIAL STATEMENTS that must be prepared and submitted as indicated under relevant law statutes.

palgrave

0

38.32

11.9

0

16.53

14.5

12.33

12

16.4

STATUTORY AUDIT

An AUDIT that must be performed on a company or other organization as indicated under relevant law statutes.

palgrave

0

36.28

12.7

0

11.42

11.4

9.79

13

13.87

STATUTORY BOND

A SURETY BOND that a government authority or REGULATOR may require contractors, businesses, or FIDUCIARIES to post for work performance affecting the public interest. The intent of the statutory bond is to ensure adequate third party financial protection in the event the contract party fails to perform as intended.

palgrave

0

29.69

15.2

0

14.28

16.6

11.94

19.25

20.41

STATUTORY DAMAGES

DAMAGES awarded to a plaintiff that are limited by some relevant statute. See also LIQUIDATED DAMAGES, UNLIQUIDATED DAMAGES.

palgrave

0

36.96

10.3

0

14.47

11

11.1

5.5

12.49

STATUTORY PROFIT

In INSURANCE, a measure of an INSURER’s profitabil- ity, typically defined as earned PREMIUMS less total EXPENSES and losses paid.

palgrave

0

34.26

13.5

0

13.75

14.7

13.31

15

18

STATUTORY RESERVE

A RESERVE that INSURERS are required to maintain to ensure they can withstand potential losses from RISKS they have underwrit- ten and can remain solvent. Methods of computing the minimum amount of the statutory reserve vary, although most are based on loss frequency calculations.

palgrave

0

49.15

11.9

0

13.58

15.1

11.9

15

16.07

STATUTORY TAX RATE

The legal mandated TAX rate applied to INCOME or sales. In many jurisdictions multiple statutory tax rates are applied to dif- ferent levels of income, while a single statutory tax rate is applied to sales (e.g., a flat sales tax). See also AVERAGE TAX RATE, EFFECTIVE TAX RATE,MARGINAL TAX RATE.

palgrave

0

62.98

8.6

11.9

9.68

10.2

9.52

10.666667

12.28

STATUTORY VOTING

The conventional corporate method of assigning one SHAREHOLDER vote to each share of COMMON STOCK and requir- ing that each vote be apportioned equally to DIRECTOR nominees. See alsoCUMULATIVE VOTING.

palgrave

0

39.33

11.5

0

14.61

12.9

11.75

11.5

16.67

STEP-DOWN BOND

A BOND (or NOTE) that pays a decreasing COUPON during the life of the SECURITY. The security may be putable by the INVESTOR at predefined dates. See also STEP-UP BOND.

palgrave

0

78.25

4.8

9.7

6.76

5.2

8.87

5.333333

8

STEP-UP BOND

A BOND (or NOTE) that pays an increasing COUPON if the SECURITY is not called by the ISSUER. The step-up may occur on one or sev- eral predefined dates. See also STEP-DOWN BOND.

palgrave

0

77.23

5.2

8.8

5.61

4.7

9.92

5.5

8.04

STERILIZATION

Action by a CENTRAL BANK or monetary authority to increase or decrease a nation’s MONEY SUPPLY to offset any changes caused by active intervention in the FOREIGN EXCHANGE markets. If a country has a greater amount of foreign exchange RESERVES as a result of its intervention activities, its money supply will increase and cause the central bank to sell GOVERNMENT BONDS as an offset; if reserves decline and the money supply contracts, the cen- tral bank will purchase government bonds. See also DIRTY FLOAT.

palgrave

0

43.06

14.2

11.9

16.4

9.72

16.333333

13.1

STICKINESS

(1) The tendency for a financial indicator, such as INFLATION and UNEMPLOYMENT, to remain at a particular level, despite a changing market environment. (2) The degree to which DEMAND DEPOSITS placed by retail customers with a BANK remain in situ in the face of a changing environment (e.g., more alternatives, higher fees, lower deposit rates).

palgrave

0

7.19

25.9

0

12.49

30.9

13.54

36.5

27.82

STICKY DEAL

See HUNG DEAL.

palgrave

0

119.19

-2.7

0

-4.29

-1.2

0.15

0.5

1.2

STOCHASTIC PROCESS

A mathematical process used to describe the con- tinuous and dynamic movement of ASSET prices. Certain OPTION pricing mod- els use a stochastic process to generate values. See also MARKOV PROCESS.

palgrave

0

61.02

7.3

10.5

11.34

8.9

12.3

5.833333

10.57

STOCK

(1) See COMMON , PREFERRED . (2) In the United Kingdom, a FIXED INTEREST SECURITY. (3) See INVENTORY. (3) See alsoFIRST IN FIRST OUT, LAST IN FIRST OUT.

palgrave

0

45.09

13.4

0

7.55

14.2

11

17

15.02

STOCK CERTIFICATE

A nonnegotiable physical certificate that denotes SHARE ownership in a PUBLIC COMPANY. See also SHARE CERTIFICATE.

palgrave

0

37.98

10

0

15.5

11.7

8.97

6

13.2

STOCK DIVIDEND

A regular corporate DIVIDEND that is payable to COMMON STOCK SHAREHOLDERS of record in the form of additionalSHARES of stock rather than cash. Also known as ACCUMULATING SHARE, BONUS ISSUE, BONUS SHARE. See also CASH DIVIDEND.

palgrave

0

59.3

8

11.9

11.82

9.6

8.62

7.333333

11.47

STOCK EXCHANGE

An EXCHANGE that specializes in TRADING of STOCKS and other EQUITY-related instruments (such as INDEXES, stock- based EXCHANGE-TRADED FUNDS, and OPTIONS). The exchange may oper- ate through physical or electronic mechanisms and is typically regulated by the country’s financial REGULATORS. See also STOCK MARKET.

palgrave

0

31.17

12.6

14.6

16.12

14.7

11.54

11.333333

16.79

STOCK INDEX

An INDEX that includes a large number of quoted STOCKS, and which serves as a reference BENCHMARK for a country’s stock market. In many cases stock indexes are directly traded through DERIVATIVES and EXCHANGE-TRADED FUNDS, and can serve as a convenient INVESTMENT and RISK MANAGEMENT tool. Also known as SHARE INDEX.

palgrave

0

54.22

9.9

12.5

12

11.7

10.05

11.166667

12.29

STOCK LOAN

A form of SECURED LENDING within the class of EQUITY FINANCE where the BORROWER posts SHARES to the LENDER in exchange for cash. A HAIRCUT is typically applied in order to protect against market movements in the price of the shares which might render some portion of the loan unsecured.

palgrave

0

63.02

10.7

0

10.28

13.4

9.61

14.5

13.2

STOCK OPTION

A CALL OPTION or a PUT OPTION with a company’s STOCK as the UNDERLYING reference. Also known as SHARE OPTION.

palgrave

0

61.33

7.2

0

6.76

4.8

7.29

5.5

10

STOCK PICKING

An INVESTMENT strategy where a PORTFOLIO MANAGER selects individual STOCKS based on FUNDAMENTAL ANALYSIS or TECHNICAL ANALYSIS in an attempt to outperform a broad INDEX orBENCHMARK.

palgrave

0

2.79

19.3

0

17.58

19.8

13.43

24

24.25

STOCK PRICE

The quoted value of the STOCK of an issuing company.

palgrave

0

61.33

7.2

0

5.6

3.8

7.29

6

8

STOCK REPURCHASE

See STOCK BUYBACK.

palgrave

0

93.81

0.9

0

3.43

5.2

9.05

0.5

1.2

STOCK SYMBOL

An alphanumeric code comprised of several characters which uniquely identifies a PUBLIC COMPANY for TRADING purposes on anEXCHANGE.

palgrave

0

19.37

15

0

18.85

17.4

12.42

15

16.09

STOP LIMIT ORDER

An ORDER to buy or sell SECURITIES at a limit price once the stop level is reached, rather than the market price characteristic of a traditional STOP ORDER.

palgrave

0

51.52

13

0

9.35

14.3

7.84

17

15.49

STOP LOSS ORDER

A STOP ORDER to sell a SECURITY at the market once a particular price level is reached. The stop loss does not guarantee a specific EXECUTION price; it simply invokes an order to sell at the stop level.

palgrave

0

60.65

9.5

0

7.43

8.5

7.9

12

12.86

STOP LOSS REINSURANCE

A REINSURANCE CONTRACT that protects the CEDING INSURER against an aggregate amount of CLAIMS in excess of a spe- cified percentage of earned PREMIUMS; stop loss reinsurance effectively pro- tects the insurer against the possibility that the sum of individual losses from the INSURANCE it has UNDERWRITTEN will be greater than expected. In most instances the REINSURER is only liable up to a defined percentage of the losses or a maximum value amount.

palgrave

0

25.97

18.7

0

13.01

21.3

11.5

26.25

21.72

STOP OUT PRICE

The lowest price at which GOVERNMENT BILLS are sold in an AUCTION MARKET process.

palgrave

0

74.19

6.4

0

9.91

8.5

8.84

7

5.6

STOPPED OUT

A situation when the market price of a given SECURITY or ASSET moves below a particular level and triggers a STOP LOSS ORDER.

palgrave

0

39.67

13.4

0

8.71

11.2

8.9

14.5

14.42

STORY PAPER

A SECURITY with unusual characteristics that requires detailed explanations or disclosure in order to attract INVESTORS. Story paper must occasionally be sold at a higher YIELD (or a larger price DISCOUNT) than comparable “conventional” securities as a result of its unique or complex qualities.Payoff profile of long straddle positionPayoff profile of short straddleSee also STRANGLE.

palgrave

0

9.72

18.7

0

17.41

20.7

12.75

19.75

19.73

STRAIGHT BOND

(1) A NONCALLABLE BOND. (2) In the EUROMARKETS, a bond with a FIXED RATE COUPON. (3) A GILT with a BULLET repayment.

palgrave

0

74.53

8.3

0

5.11

9.9

11.9

13

12.44

STRAIGHT-LINE DEPRECIATION

A DEPRECIATION mechanism that applies equal reductions in value to a depreciable ASSET based on the expected life of the asset. Straight-line methods are commonly applied to FIXED ASSETS that are not expected to become obsolete before the end of their economically useful lives. See also ACCELERATED DEPRECIATION.Payoff profile of long stranglePayoff profile of short strangle

palgrave

0

27.11

14.1

14.6

15.55

14.9

10.2

13.333333

14.62

STRAP

An OPTION SPREAD designed to take advantage of VOLATILITY. A LONG strap, which is created through a long PUT OPTION and two long CALLOPTIONS with the same STRIKE PRICE, is characterized by unlimited profit potential and limited downside RISK; the short strap, simply a short put and two short calls with identical strikes, has limited profit potential and unlim- ited downside risk. See also STRIP.

palgrave

0

57.91

10.6

14.1

11.72

13.6

9.57

14.5

14.22

STRATEGIC ASSET ALLOCATION

One of two phases in the ASSET ALLOCATION process, where an INVESTOR or INVESTMENT MANAGER develops a weighting of asset classes for the PORTFOLIO that is intended to be preserved over a long-term horizon. By doing so, the manager is effectively defining a BENCHMARK. See also TACTICAL ASSET ALLOCATION.

palgrave

0

46.47

10.8

13.6

11.89

11.2

10.25

11.5

12.23

STREET

[See WALL .

palgrave

0

77.91

2.9

0

-10.31

0.8

0.1

0.5

0.8

STREET NAME

Client-owned SECURITIES that are registered to a BANK, BROKER/DEALER, or third party NOMINEE rather than the client. Securities held in street name eliminate the need to physically deliver secur- ities to the client.

palgrave

0

46.27

10.9

0

13.51

13.1

10.2

12.25

13.87

STRESS TESTING

See SCENARIO ANALYSIS.

palgrave

0

34.59

9.2

0

11.15

11.5

14.31

1.5

14.53

STRICT LIABILITY

A LIABILITY motion requiring that the plaintiff need only prove harm in a specific manner in order to collect damages and need not demonstrate the methods, motivations, or intent leading to the damage.

palgrave

0

29.52

17.3

0

12.49

19.2

11.49

20.5

18.05

STRIKE

See PRICE.

palgrave

0

77.91

2.9

0

-7.41

0.8

0.1

0

0.8

STRIKE PRICE

The agreed price, rate, or level at which an OPTION begins creating value for the buyer and a LIABILITY for the seller. When the market price exceeds the strike price for a CALL OPTION, or falls below the strike for a PUT OPTION, INTRINSIC VALUE is created. Also known as EXERCISE PRICE, STRIKE, STRIKING PRICE.

palgrave

0

61.36

9.2

10.5

8.88

9.7

8.56

10.833333

10.96

STRIKING PRICE

See STRIKE PRICE.

palgrave

0

119.19

-2.7

0

1.52

3.6

9.05

0.5

1.2

STRIP HEDGE

A HEDGE based on the use of sequential OVER-THE- COUNTER or EXCHANGE-traded CONTRACTS that match or approximate future CASH FLOWS associated with the underlying RISK being hedged. A successful strip hedge can eliminate DIRECTIONAL RISK and CURVE RISK. See also ROLLING HEDGE.

palgrave

0

57.27

8.8

12.5

13.62

11.8

10.35

8.666667

12.27

STRIPPING

The process of separating a BOND’s CORPUS and INTEREST COUPONS so that they can be traded separately. Stripping is done by gov- ernment agencies and FINANCIAL INSTITUTIONS, often by creating separate TRUST vehicles that hold the original SECURITIES and issue new, decomposed securities. See also RECONSTITUTION.

palgrave

0

30.57

12.8

15

14.9

13.5

11.6

12

15.69

STRIPS

Acronym for Separate Trading of Registered Interest and Principal Securities, a STRIP SECURITY in the US marketplace

palgrave

0

11.92

15.8

0

16.18

14.8

11.91

15.5

20.92

STRONG HANDS

A holder of an EXCHANGE-TRADED DERIVATIVE that expects to receive the UNDERLYING ASSET at EXPIRY or EXERCISE. See also WEAK HANDS

palgrave

0

43.9

9.7

0

10.82

8.3

10.17

6.25

9.91

STRUCTURAL MODEL

A form of CREDIT DEFAULT MODEL that defines the PROBABILITY of COUNTERPARTY DEFAULT in terms of a firm’s ASSETS, LIABILITIES, and CAPITAL structure. Default occurs when a boundary value, such as a liability or negative NET WORTH threshold, is reached. See alsoINTENSITY MODEL.

palgrave

0

31.58

12.4

11.9

12.75

11.4

10.96

8.5

11.3

STRUCTURED FINANCE

The general category of financing and RISK MANAGEMENT solutions offered by BANKS to institutional clients seeking to achieve specific results that cannot be readily met with standard financial products. Structured finance can involve combinations of LOANS, BONDS, and DERIVATIVES, as well as SECURITIZATION techniques and off-balancesheet vehicles, to achieve goals of RISK TRANSFER, liquidity management, and/or funding. See also ASSET-BACKED SECURITY, COLLATERALIZED DEBT OBLIGATION, FINANCIAL ENGINEERING.

palgrave

0

6.84

17.8

18.6

20.42

21.2

14.06

18.333333

19.1

STUB

(1) The NEARBY FUTURES CONTRACT on EURODOLLARS. (2) A SHORT COUPON on a NOTE or a BOND.

palgrave

0

79.6

6.4

0

4.58

6.8

10.98

8.5

9.15

STUCK DEAL

See HUNG DEAL

palgrave

0

119.19

-2.7

0

-4.29

-2.7

0.15

0.5

1.2

STYLE DRIFT

A phenomenon when a HEDGE FUND or INVESTMENT COMPANY deviates from its original INVESTMENT focus and expertise in an attempt to find new opportunities to deploy CAPITAL. Style drift can intro- duce additional RISK into a fund, as managers may lack the requisite base of knowledge needed to effectively manage the ASSETS.

palgrave

0

28.17

15.8

0

12.6

15.9

12.21

19

17.32

SUBINVESTMENT GRADE

A CREDIT RATING designation applied to any ISSUER of SECURITIES that is rated below BBB- by Standard and Poor’s or Baa3 by Moody’s Investors Services. Subinvestment-grade credits have weaker finan- cial profiles than INVESTMENT GRADE credits, and thus a greater likelihood of encountering FINANCIAL DISTRESS leading to DEFAULT.SUBORDINATED PERPETUAL DEBT.

palgrave

0

20.72

16.6

0

17.7

19.9

14.98

17

17.2

SUBORDINATED PERPETUAL DEBT

A COUPON-bearing BOND that has no PRINCIPAL REDEMPTION feature and ranks junior to all other DEBT CLAIMS.The bond functions as permanent FINANCING or quasi-EQUITY (although it ranks senior to COMMON STOCK). See also SUBORDINATED DEBT.ABSOLUTE PRIORITY RULE.

palgrave

0

35.78

12.9

0

16.13

15.9

13.09

13.75

16.05

SUBPRIME LOAN

A LOAN granted to a weak individual or corporate BORROWER, including one that may have had a history of prior loan delin- quency or DEFAULT. Subprime loans, which are generally secured against a spe- cific ASSET (e.g., a residence, commercial property), typically have much lower LOAN-TO-VALUE ratios than conventional loans in order to protect the lender in the event of default. Also known as B & C LOAN, NONPRIME LOAN.

palgrave

0

39.67

13.4

14.6

11.09

14.1

11.64

15.666667

15

SUBPRIME MORTGAGE

A residential MORTGAGE that is granted to a BORROWER that has a relatively weak CREDIT standing, including borrowers that may have previously DEFAULTED on other DEBT obligations. Subprime mortgages may be characterized by higher rates to compensate for poorer credit quality.

palgrave

0

25.29

14.8

0

15.55

15.8

12.74

15.75

18.93

SUBROGATION

(1) The transfer of rights of loss recovery from the INSURED to the INSURER, allowing the insurer to seek its own restitution. The insured, whose rights are transferred, is known as the subrosor; the insurer accepting the subrogated rights is known as the subrosee. (2) The right to substitute one CREDIT for another in settling a CLAIM or transferring ownership.

palgrave

0

41.03

15

0

11.62

17.4

10.39

21

18

SUBSCRIBER

A party to an initial SUBSCRIPTION of SHARES.

palgrave

0

71.82

5.2

0

7.21

4.9

9.95

4

8.2

SUBSCRIPTION

An offer to purchase SECURITIES, exercisable for a specific period of time.

palgrave

0

25.46

12.7

0

11.82

9.7

10.81

9

18.13