SEC
Securities and Exchange Commission: The federal agency with direct regulatory authority over the securities industry.

Secondary Market
Exchanges and over-the-counter markets where a security can be traded (bought or sold) after it has been issued.

Secondary Offering
The sale to the public of a usually large block of stock that is owned by an existing shareholder.

Sector Fund
A mutual fund that invests in the stocks of a particular industry.

Secular Stocks
Long term as opposed to seasonal or cyclical.

Securities Investor Protection Corp (SIPC)
The nonprofit corporation that insures the securities and cash in the customer accounts of brokerage firms up to $500,000 in the event a firm fails. All brokers and dealers registered with the Securities and Exchange Commission are required to be members.

Security
Any instrument which represents either an obligation owed or an ownership interest.

Share
An investment that represents part ownership of a company or a mutual fund.

Short Covering
Trades that reverse, or close out, short-sale positions. In the stock market, for instance, shares are purchased to replace the shares previously borrowed.

Short Selling
A trading strategy that anticipates a drop in a share's price. Stock or another financial instrument is borrowed from a broker and then sold, creating a short position. That position is reversed, or covered, when the stock is repurchased to repay the loan. The short seller profits if he or she is able to repurchase stock at a lower price than he or she received in creating the short position.

Simple Interest
Interest computed and paid only on the principal.

Simplified Employee Pension (SEP)
A retirement plan for the self-employed .

Special Needs Trust
A trust used to provide supplemental funds for a disabled person without jeopardizing access to government programs.

Spot Market
A market for buying or selling commodities or foreign exchange for immediate delivery and for cash payment.

Spot Price
The price of a commodity or currency available for immediate sale and delivery.

Spread
In stocks, the difference between the bid and asked prices. In fixed-income securities, the difference between the yields on securities of the same quality but different maturity or the difference between the yields on securities of the same maturity but of different quality.

Stagflation
The combination of high inflation and slow economic growth.

Standard & Poor's 500 Stock Index (S&P 500)
A benchmark index of 500 large stocks, maintained by Standard & Poor's, a division of McGraw-Hill Cos.

Stock
Investment that buys ownership in a corporation, in exchange for a portion of that company's earnings and assets.

Stock Option
An agreement allowing an investor to buy or sell something, such as shares of stock, within a stipulated time and for a certain price. Also, it is a method of employee compensation that gives workers the right to buy the company's stock during a specified period of time at a stipulated exercise price.

Stock Split
When a company divides existing stock into more shares with the approval of shareholders. This is usually done to reduce the price per share and increase the marketability of shares.

Stop Order
An investor's order to a broker to buy or sell a security when its market price reaches a certain level.

Straddle
An options trading strategy which involves the purchase or sale of a put and a call on the same security.

Surrender Value
The amount of money a policyholder would receive upon dropping, or surrendering, a cash-value life insurance policy. This amount may be far less than the accumulated cash value because of surrender charges.

Swap
An agreement that exchanges one security's return for another's return.