Glossary - S
 

Saucer Base

Similar to a cup and handle formation, but the saucer base is shallower and rounder in shape and is not associated with the “cup”.

Seasonality

A predictable price pattern based on historical analysis of  seasonal price tendencies.

Secondary Distribution or Offering

The redistribution of a block of stock some time after it has been sold by the issuing company.  The sale is handled off the exchanges by a securities firm or group of firms, and the shares are usually offered at a fixed price that is related to the current market price of the stock.

Secondary Market

The market where previously issued securities are bought and sold.

Sector Fund

A mutual fund that concentrates on trading a range of securities within a broad industry group, such as technology, energy or financial services.

Secular Trend

A very long-term trend encompassing several business cycles. Secular trends t7ypically last form 7-25-years or even longer.

Security

Common or preferred stock; a bond of a corporation or government.

Selling Short

Selling a security and then borrowing it with the intent of replacing it at a lower price.  Selling short in a futures market occurs when the trader enters a position by assuming  responsibility of the seller.

Semilog

Semilog scaling is used on the y or vertical axis to compare relative price changes rather than physical point changes in price. Each vertical distance measures a specific percentage move in the price, (1 inch represents a doubling, 1/2inch represents a 10% price move etc.. This compares to arithmetic scaling where a specific vertical distance represents a specific absolute price change, 5 points, $10 etc.

Settlement Price

The last price paid for a commodity on any trading day. Also referred to as settle or closing price.

Settlement Risk

The risk of possible default by a counter-party at the time of settlement.

Shaved Candlestick

A candlestick in which the shadows are almost or completely non-existent.

Short Covering

The process of buying back stock that has already been sold short.

Short Interest

Shares that have been sold short but not yet repurchased.

Short Interest Ratio

A ratio that indicates the number of trading days required to repurchase all of the shares that have been sold short for a specific security or for all the securities listed on a particular exchange over a given time (usually a month). For example. a short interest ratio of  2.0 would indicate that it would take 2-days, based on the previous month’s volume to cover all shorts. A high short interest is considered bullish because it represents stock that has to be purchased. A high ratio also indicates pessimism and from a contrary aspect is also bullish. This used to be a widely followed indicator, but the widespread use of options and index futures have distorted the numbers.

Short Position (Interest)

The total amount of short sales outstanding on a specific exchange at a particular time.  The short position is published monthly.

Short Selling

Short selling is normally a speculative operation undertaken in the belief that the price of the shares will fall.  It is accomplished by borrowing stock from a broker in order to sell shares one does not own.  Most stock exchanges prohibit the short sale of a security below the price at which the last board was traded.  

Sine wave

A wave whose amplitude varies as the sine of a linear function of time.

Signal Line

A triggering devise used to generate buy and sell signals. Used most commonly in conjunction with the MACD indicator.

Simple Moving Average

The arithmetic mean or average of a series of prices over a specific period of time. Technicians use crossovers of the moving average by the price to generate buy and sell signals.

Smoothing

A mathematical technique that removes excess volatility and attempts to reflect the underlying price trend.

Specialist

A trader on the market floor assigned to fill bids/orders in a specific stock out of his/her own account when the order has no competing bid/order to ensure a fair and orderly market.

Speculators

Market participants who try to profit from buying and selling futures and options contracts by anticipating future price movements. They assume market price risk and add liquidity and capital to the futures markets.

Spot Month

The nearby or front month of a futures contract.

Spot Price

Is the cash price.

Spread

A trade in which two related contracts/stocks/bonds/options are traded to exploit the relative differences in price change between the two.

Standard Deviation

The positive square root of the expected value of the square of the difference between a random variable and its mean. A measure of the fluctuation in a stock's monthly return over the preceding year.

Stochastics Oscillator

Was developed by George Lane and is an oscillator  that compares today's price to a preset window of high and low prices. The calculation results in a an indicator that is plotted between 0 and 100. Stochastics can be plotted for any time span and are often smoothed.

Stock Index

Used to measure and report value changes of a selected group of stocks. How it is done depends on its composition–the sampling of stocks, the weighing of individual stocks, and the method of averaging used to establish an index.

Stock Index Futures

A futures contract that uses a market index as the underlying instrument. The delivery mechanism is usually cash settlement.  

Stop and Reverse (SAR)

A stop that, when hit, is a signal to reverse the current trading position. (Also known as reversal stop).

Stop-Limit Order

A stop order variation in which a trade must be executed at the exact price or better. If the order cannot be executed, it is held until the stated price or better is reached again.

Stop Order

An order to buy or sell when the market reaches a specified point. A stop order to buy becomes a market order when the futures contract trades (or is bid) at or above the stop price. A stop order to sell becomes a market order when the futures contract trades (or is offered) at or below the stop price.

Stop Loss

A risk management technique in which an order is entered with a broker to liquidate a position if the price reaches a specified level.

Strike Price

The price per unit at which the holder of an option may receive or deliver the underlying unit; also known as the exercise price.

Support

A concentration of demand that is sufficient to temporarily halt a downtrend.

Swings

The measurement of movement of the price of a security between extreme highs and lows.

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