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Glossary

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S
S&P 500 (Standard & Poor's 500 Index) Considered to be a benchmark of the overall U.S. stock market. This index is comprised of 500 widely-held, Blue Chip stocks representing industrial, transportation, utility and financial companies with a heavy emphasis in industrials.
Secondary Market A market where investors buy securities from other investors, rather than from issuers. For comparison, see Primary Market.
Sector A group of stocks that share common industry characteristics. For example, airline company stocks are a sector of the transportation industry.
Sector Fund A mutual fund that seeks to limit its investments to a specific industry or economic sector, e.g., technology, real estate or health care. These funds may involve a greater degree of risk than an investment in other mutual funds with greater diversification.
Securities Exchange Commission (SEC) A government regulatory agency that oversees and enforces the securities laws of the United States, publishes rules and guidance for the securities industry, and provides investor education.
Securities Investor Protection Corporation (SIPC) Insures securities and cash (up to specified limits) in the customer accounts of member brokerage firms against the failure of those firms. The SIPC does not protect investors against market risks.
Security A stock, bond or other investment instrument issued by a corporation, government or organization that signifies an ownership position or creditor relationship.
Security Type The type of security such as stock, bond or mutual fund.
Sell Indicates you already own a security and wish to transfer ownership in exchange for money.
Sell a Fund / Buy another fund This is the action of selling shares in one fund and using those dollars to purchase shares in another fund. Please realize that when you move money between funds, the sale could be taxable and a transaction fee may apply.
Sell Short Indicate a "sell short" order when you want to borrow stock and sell it, with the understanding that you must buy it back later (hopefully at a lower price) and return it.
Sell to Close A long option position is closed when it is sold. See Options.
Sell to Open A short position is opened when an option is sold. See Options.
Settlement Date The business day by which you must pay for securities purchased or deliver securities sold.
Share A unit of ownership in a company, mutual fund or limited partnership. Company shares are represented by a stock certificate that specifies the company and the shareholder and number of shares.
Shareholder Equity For a company, this is its total assets minus total liabilities.
Shares Outstanding The number of shares that have been issued that are actually in the hands of the public.
Short-term Obligations Debt instruments, usually to be repaid within a year or less.
Short-term Redemption fee This fee is charged when shares are sold within a short period of time. See the fund prospectus for details about the length of the designated holding period.
Small Cap The stock of a company with a market value (capitalization) of less than $1.5 billion. Small-cap companies tend to be smaller emerging companies and are more volatile than large-cap companies.
Special Conditions Special conditions may be applied to an order, such as All or None (AON) or Do Not Reduce (DNR).
Special Maintenance Schwab may impose higher maintenance requirements on certain securities due to their volatility. To find out what the margin maintenance requirement is for any stock, enter a stock symbol on the Quotes and Research page and click on the "Margin Requirement" link within the Stock Summary.
Special Memorandum Account (SMA) This is a special account authorized by the Federal Reserve Board to preserve buying power in your margin account. It reflects any excess equity you have above the required amount (50% for marginable securities). The figure is part of the calculation used to determine your Margin Buying Power. Unlike a credit balance or market value, SMA is a bookkeeping entry that reflects a history of the excess equity* above the required minimum for Regulation T, plus all of the charges and releases from the past activity in the account. Once the SMA has been credited with any excess equity, it remains available until used for a purchase or a cash withdrawal. The SMA is retained even if the market value of securities held on margin subsequently declines, which could result in an SMA figure greater than your margin Cash Available (inflated SMA). A Fed call is generated when a trade occurs in an account that does not have sufficient SMA to satisfy the initial requirement of the Federal Reserve.
Specialist An individual, corporation, partnership, or group of firms that is responsible for a given exchange-traded security. The specialist stands ready to buy and sell shares to maintain an orderly market. A Market Maker serves a similar purpose for an OTC security.
Stock A document that establishes proportionate company ownership represented as shares. Different types of stocks (e.g., common stock) have different advantages and responsibilities associated with them. As a stockowner, you share in the profits and losses of a company.
Stock Dividends A dividend paid in stock rather than cash.
Stop Limit Order A combination of a Limit Order and a Stop order used to protect a profit or limit a loss -- This is a request to Buy or Sell a security at a specified limit price or better, but only after the specified stop price has been reached or passed. Even if the stop price is triggered, a Stop Limit order guarantees the limit price, but not the execution. For comparison, see Stop Order.
Stop Order Indicates a request to Buy or Sell at the market price*, but only when the security trades at or past a price that you specify (called the Stop price). Once the stock price moves to or through the stop price, your pending Stop Order becomes a market order which guarantees execution, but not price. For comparison, see Stop Limit.

*For a listed stock, a standard stop order is an order to buy or sell at the market price once the security has traded at or better than the price you specify (the stop price). For an Over-The-Counter (OTC) security this happens when the inside bid or offer is equal to or better than your stop price.
STRIPS Zero coupon Treasuries issued by the U.S. at a discount from face value. Interest is paid as a lump sum at maturity.
Symbol The unique 1-5 character designation used to identify a security for trading.

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T
Tax-deferred A provision that allows taxes to be postponed until a later date. Generally this applies to investments in retirement plans, annuities, savings bonds and Employee Stock Option Plans.
Tax-efficient Investments that are managed with the objective to minimize tax consequences.
Tax-exempt Accounts or investments that generally are free from tax liability.
Tax-free Accounts or investments that have no tax consequences.
Tick A small price movement of a stock. Also, the direction the price moved on its last sale. For example, an up-tick means the last trade was at a higher price than the previous one.
Ticker Symbol The unique 1-5 character designation used to identify a security for trading. Another name for symbol.
Time Conditions The following time limits may be applied to Stop, Limit, or Stop Limit orders: Day Only, Good Until Canceled, Fill or Kill, Immediate or Cancel.
Time Horizon The amount of time, usually years, that you expect to keep an amount of money invested.
Total Assets The combined value of all items of monetary value owned by an individual or business.

A company's assets include tangible assets, such as equipment, inventory and real property, and intangible assets such as goodwill (the value of a company's name in the market), patents and other intellectual property, which are owned by a company and given monetary value in the company's balance sheet.
Total Revenue Total of all sales and income generated by a company.
Trade Confirmation Written statement acknowledging a securities transaction and its details.
Transaction Fee A fee charged for purchasing or selling certain mutual fund shares.
Treasury Bill A short-term debt security of the U.S. government, also known as a "T-Bill." T-Bills are usually held for a short time period (i.e., three months to one year) and can easily be converted into cash. T-Bills are typically sold at a discount and are exempt from state and local taxes. The money you will make on a T-Bill is the difference between the face value of the T-Bill and what you paid for it. T-Bills are sold in $1000 increments.
Treasury Note A mid-term debt security of the U.S. Government, with maturities ranging from two to ten years that pay a fixed rate of interest every six months and returns its face value at maturity. Minimum denomination is $5,000 plus $1,000 increments for a two to three year maturity, or $1,000 plus $1,000 for a four to ten year maturity.
Treasury Security Debt obligations of the U.S. Government that are issued through the Department of the Treasury. Since they are backed by the full faith and credit of the U. S. Government, they are considered virtually free from risk of default. For individual investors, the income of Treasuries is exempt from state and local taxes.
Trust Account A legal plan by which the trustor places assets in trust for a beneficiary.


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V
Volatility The magnitude and frequency of changes in a security’s value within a short period. The more volatile an investment, the higher its risk and potential return. Volatility is usually measured by calculating the annualized standard deviation of daily change in price.
Volume The daily number of shares traded in a security.


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W
Warrants A type of security usually issued together with a bond or preferred stock that allows the holder to buy a proportionate amount of common stock at a fixed price (usually above the market price at the time of issuance) for a period of years or to perpetuity. Warrants are transferable and trade on the major exchanges. They are also known as Subscription Warrants.

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Y
Yield The annual rate of return of an investment paid in dividends or interest, expressed as a percentage.

For a mutual fund, the yield is the rate of return earned by the securities in the fund's portfolio, less the funds expenses during a specified period. A fund's yield is expressed as a percentage of the maximum offering price per share on a specified date.


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Z
Zero coupon Bond Zeros are securities that do not pay interest during their terms but are sold at a discount from their face value. A zero coupon bond generally increases in value as it approaches maturity, and the return comes solely from its appreciation. The dollar amount difference between the purchase price and the maturity value represents the yield or accretion value. Maturities range from 1 to 30 years.

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#
52-week High The highest price at which a security has traded within the previous 52 weeks.
52-week Low The lowest price at which a security has traded within the previous 52 weeks.

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