Glossary of Accounting, Financial & Investing Information - S

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Securities

Securities include negotiable financial instruments such as common shares, preferred shares, bonds, debentures, mutual funds, put and call options, warrants, etc.

Segregated funds

A type of mutual fund, sold by insurance brokers, which is guaranteed to return all or part of your initial investment.  Segregated funds may be protected from creditors under certain circumstances.  When a preferred beneficiary is designated, the funds are paid to the beneficiary upon death, avoiding probate.

Settlement date

The settlement date for securities transactions is the date on which payment is made to settle the trade.  The settlement date for stocks and bonds is normally 3 days after the trade date, and for options and mutual funds it is normally the day after the trade date.  The settlement date is the date on which possession of the security is transferred from the seller to the buyer.  If you sell an investment at the end of the year, and the settlement date is after yearend, the sale is not recorded for tax purposes until after yearend.

Share

Shareholder

A shareholder owns stock (shares) in a corporation.  The shareholders are the owners of a corporation.

Shareholders' equity

This consists of all amounts received when shares were issued (share capital), plus retained earnings, less treasury shares, and is shown on the balance sheet portion of a corporation's financial statements.  Also equal to total assets less total liabilities.

Short

A person is "short" a security when they sell shares they do not own, by borrowing them from their brokerage company.  This is called making a "short sale", or "selling short".  This is normally done when the person believes that the price of the security is going to fall, so that they can cover the sale by buying back the stock later at a lower price.  See also "long".

Speculator

One who will take on additional risk in order to increase returns.

Spread

Stock

A certificate representing partial ownership (share) of a company (or a base for making soup).  See also capital stock, common shares, and preferred shares.

Stock dividend

A dividend paid in the form of shares or partial shares of the paying corporation.

Stock exchange

A stock exchange is an organization which is in the business of providing securities trading services.

Stock index

Stock split

This is when a corporation issues additional shares to its shareholders.  For instance, a 2 for 1 stock split would result in each shareholder holding twice the number of shares that they previously held.  However, the market value per share would be only half of the previous market value per share.

Stop loss order

An instruction to a broker to sell a stock if it falls to a specified price.

Street name

A security registered in street name is registered in the name of the brokerage company, not the owner.  This is how most shares are held when purchased through a brokerage company.

Strip bond

A strip bond is a bond that pays no interest.  It is purchased at a discount from face value, and face value is paid upon maturity.  See also coupon.

Structured products

A broad term including many financial products such as hedge funds, exchange traded funds, limited partnerships, and mutual funds, and are structured to achieve a certain objective.
Examples:

More caution should be used if the structured product is sold without a prospectus.

Surplus

Earned surplus is the same as retained earnings.

Revised: October 12, 2021