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Sales charge |
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In the case of mutual funds, these are commissions charged to holder of
fund units, usually based on the purchase or redemption price. Sales charges
are also known as "loads." |
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SAM - Montréal Automated System |
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SAM is the acronym that refers to software and system components upon which
is built the Bourse de Montréal Inc.'s fully automated trading environment.
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Secondary distribution |
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The redistribution of a block of stock some time after it has been sold
by the issuing company. |
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Secondary market |
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A market where securities are bought or sold after their initial purchase
by public investors. |
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Sector index |
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An index that measures the performance of a narrow market segment, such
as biotechnology or small capitalisation stocks. |
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Secured put/Cash-secured put |
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An option strategy in which a put option is written against a sufficient
amount of cash (or T-bills) to pay for the underlying security purchase
if the short option is assigned. |
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Securities act |
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Provincial
legislation regulating the underwriting, distribution and sale of securities.
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Securities administrator |
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A
general term referring to the provincial regulatory authority responsible
for administering a provincial Securities Act. |
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Series |
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All
options in the same class that have the same exercise price and same expiration
date. |
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Settlement |
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The process by which the underlying asset is transferred from one brokerage
account to another when the derivative instrument is exercised by its owner
and the inherent obligations assigned to the seller. |
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Settlement price |
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The official price at the end of a trading session. This price is established
by the CDCC and is used to determine changes in account equity, margin requirements
and for other purposes. (See Mark-to-market.) |
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Share certificate |
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A paper certificate that represents the number of shares owned by the investor.
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Shareholders' equity |
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The amount of a corporation's assets belonging to its shareholders (both
common and preferred) after allowance for any prior claim. |
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Shares |
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A document signifying part ownership in a company. The terms "share" and
"stock" are often used interchangeably. |
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Short position |
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A position wherein a person's interest in a particular underlying asset
is as a net seller. |
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Short-term bond |
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A bond or debenture maturing within three years. |
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Short-term debt |
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Company borrowings repayable within one year that appear within current
liabilities. |
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Short sell |
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A strategy that profits from a security price decline. It is initiated by
borrowing the security from a broker-dealer and selling it in the open market.
This strategy is closed (covered) at a later date by buying back the security
and returning it to the lending broker-dealer. |
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Simplified prospectus |
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An abbreviated and simplified prospectus organized by mutual fund for purchasers
and potential purchasers of units or shares (see prospectus). |
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Single stock futures |
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Futures contracts on shares of an individual common stock. |
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Sinking fund |
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A fund set up to retire most or all of a debt or preferred share issue over
a period of time. |
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Specialty fund |
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A mutual fund that concentrates its investments on a specific industrial
or economic sector or a defined geographic area. |
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Speculator |
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An individual who is prepared to accept calculated risks in the marketplace,
typically by investing in a short-term to medium-term manner. |
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Spin-off |
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A stock dividend issued by one company in shares of another corporate entity,
such as a subsidiary corporation of the company issuing the dividend.
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Spot price |
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The market price of a commodity or financial instrument that is available
for immediate delivery. |
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Sponsored options |
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Securitised options issued by banks or investment houses written on different
financial underlyings. |
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Spread |
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The gap between bid and ask prices in a quotation. Also see Option spread
strategy. |
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Self-Regulatory Organization (SRO) |
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An organization that has been delegated certain regulatory and compliance
functions by the regulatory authorities. Many important rules governing
securities industry practices and standards in Canada are set by the self-regulatory
organisations (SROs), which include Bourse de Montréal Inc., the
Canadian Venture Exchange, the Toronto Stock Exchange and the Investment
Dealers Association of Canada. |
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Standard deviation |
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A statistical measure of price fluctuation. One use of the standard deviation
is to measure how security price movements are distributed about the mean.
(See also Volatility.) |
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Stock dividend |
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A dividend paid in shares of stock rather than cash. (See Spin-off.)
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Stock Index |
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A vehicle used to denote trends in securities markets. The most popular
in Canada is the Toronto Stock Exchange 300 Composite Index (TSE 300).
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Stock index futures |
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Futures contracts having a stock index as the underlying asset. |
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Stock split |
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An increase in the number of outstanding shares by a corporation, through
the issuance of a set number of shares to a shareholder for a set number
of shares that the shareholder already owns. For example, a corporation
might declare a "2-for-1 stock split." This means that for every
share of stock an investor owns, he/she will be given an additional share,
thus owning 2 shares instead of 1. There will be a corresponding reduction
in equity value per share. In this case, the new shares (post-split) will
be worth one-half their previous value but the investor will own twice as
many shares. (See also Stock dividend and Adjustments.) |
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Stop-limit order |
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A type of contingency order placed with a broker that becomes a limit order
when the security trades at or through a specific price. |
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Stop buy and stop loss orders |
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An order to buy or sell, placed above or below the market price, which become
market orders as soon as the price of the security rises or falls to the
specified price. A stop buy order is used to protect against losses in a
short sale, whereas a stop loss order may be used to protect a paper profit
or a limit a possible loss when securities are already owned. Since such
orders become market orders when the stop price is reached, there is no
certainty they will be executed at that price. |
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Straddle |
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A trading position involving the simultaneous purchase or sale of both a
put and a call with the same strike price, expiration date, and underlying
asset. |
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Strangle |
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A trading position involving the simultaneous purchase or sale of both a
put and a call of different strike prices with the same expiration date.
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Street certificate |
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These are certificates that are registered in the name of a securities firm
rather than the owner of the security. This makes the certificate easily
transferable to a new owner.. |
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Strike price |
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See Exercise price. |
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Strike price interval |
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The normal price differential between option strike prices. |
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Strip bonds |
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The capital portion of a bond from which the coupons have been stripped.
The holder of the strip bond is entitled to its par value at maturity, but
not the annual interest payments. |
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Suitability |
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A requirement that any investing strategy fall within the financial means
and investment objectives of an investor or trader. |
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Support |
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A term used in technical analysis to describe a price level at which falling
prices are expected to stop or meet increased buying activity. This analysis
is based on previous price behaviour of the security. |
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Swap |
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An OTC derivative that obliges the parties to exchange the financial returns
from one asset, or the payment obligations of one liability, for those of
another at a specified rate of exchange over a pre-determined period of
time. |
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Synthetic position |
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A strategy involving two or more instruments that has the same risk-reward
profile as a strategy involving only one instrument. |
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Synthetic long call |
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A long position in the underlying asset combined with a long put position.
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Synthetic long put |
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A short position in the underlying asset combined with a long call position.
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Synthetic long stock |
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A long call position combined with a short put position. |
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Synthetic short call |
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A short position in the underlying asset combined with a short put position.
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Synthetic short put |
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A long position in the underlying asset combined with a short call position.
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Synthetic short stock |
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A short call position combined with a long put position with the same exercise
price. |
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Systematic withdrawal plan (SWP) |
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A plan offered by mutual fund companies that allows unit holders to receive
payment from their investment at regular specified intervals (usually monthly
or quarterly) in either fixed-dollar payments or through a fixed number
of units being sold. |
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