Standard and Poor’s — Credit Rating Agency
SAFEX
MARKET: Derivatives
The South African Futures Exchange facilitates the trading of interest rate, share index, currency and commodity futures contracts and options on the futures contracts.
SARB
South African Reserve Bank
Screen Market
MARKET: General
A market where the transactions between counterparties are concluded by electronic means, as opposed to an open-outcry market where trading takes place on a trading floor.
Seasonally Adjusted and Annualised
MARKET:Economics
This is the process of removing the seasonal volatility (monthly or quarterly) from a time series. This then provides a measure of the underlying trend in the analysed data.
SEC
MARKET: Regulation
The Securities and Exchange Commission. The SEC is a regulatory body responsible for investor protection in the United States. It administers legislation relating to securities and the listing requirements in the US.
Secondary Market
MARKET: Debt Markets
The section of the market where previously issued financial securities are traded.
Sell Signal
MARKET: Technical Analysis
An event or coincidence of events which indicate, technically, that a share should be sold. Usually this takes the form of a crossing of one graph over another, or over a predetermined line, or a breakout from a formation.
SENSEX
MARKET: General
BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted equity index composed of 30 stocks. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. The 30 companies account for approximately one-fifth of the market capitalisation of the BSE.
Settlement
MARKET: General
The process whereby securities or interests in securities are delivered, usually against payment, to fulfill contractual obligations. This involves the delivery of securities to perform contractual delivery obligations. It usually also involves the corresponding payment of a purchase price. Usually settlement is preceded by trading, which involves entering into contracts of sale and purchase. Although settlement is generally becoming quicker, in most markets a number of business days still elapse between trading and settlement.
Settlement Date
MARKET: General
The day on which payment and delivery of financial transactions is due.
Settlement Risk
MARKET: Risk Management
A form of credit risk that arises at the settlement of a transaction. Settlement often entails two parties both performing on respective obligations — say one party paying for a bond, and the other party delivering the bond. The risk is that one party may perform on its obligation but the other might not.
Sentiment (Market)
MARKET: Sentiment (Market)
The intuitive feeling of the investment community regarding the expected movement of the stock market or other segments of the financial markets.
SFA
MARKET: Regulation
The Securities and Futures Authority (SFA) is the self-regulatory body responsible for authorisation and supervision of companies that deal in equities, futures and options in the UK.
Short
MARKET: General
Market terminology that refers to a position where the trader or investor has sold the underlying financial instrument.
Short Dates
MARKET: FX
Foreign exchange deals for a broken number of days up to the one-month date.
Signal
MARKET: Technical Analysis
A technical analysis term indicating that an event or combination of events on the charts strongly suggest a purchase or sale of the instrument concerned.
Simple Interest
MARKET: TVM
The situation where interest is payable only once and therefore does not allow for an opportunity of earning interest-on-interest. Simple interest generally applies to money market transactions.
Simple Yield
MARKET: Fixed Income
An algebraic expression for calculating yields-to-maturity on a bond. Simple yield-to-maturity is easy to calculate, but it only approximates a bond’s actual yield-to-maturity because it does not properly discount future cash flows.
South African Customs Union (SACU)
MARKET: General
An agreement that allows for the unrestricted flow of goods and services and the sharing of customs and excise revenue between South Africa, Botswana, Swaziland, Lesotho and Namibia.
South African Reserve Bank (SARB)
MARKET: Economics
The South African Reserve Bank (the SARB) is the central bank of the Republic of South Africa.
Southern African Development Community (SADC)
MARKET: General
A regional governmental organisation that promotes economic integration, collaboration and technical cooperation throughout Southern Africa.
Sovereign Bonds
MARKET: Bonds
Bonds that are issued by the national government of a sovereign state.
Sovereign Risk
MARKET: Risk Management
See Political Risk.
Special Purpose Vehicle (SPV)
Also known as a Special Purpose Entity (SPE) is a legal entity created to fulfill narrow, specific or temporary objectives, primarily to isolate financial risk, such as bankruptcy. As opposed to a general purpose vehicle or a trading corporation, a SPV as the name suggests, is formed for a special purpose e.g. buying an asset that does not form part of the Bank's balance sheet. A SPV may be owned by one or more other entities and certain jurisdictions may require ownership by certain parties in specific percentages.
Speculation
MARKET: General
Taking positions in financial instruments without having an underlying exposure that offsets the position taken.
Spot
MARKET: General
Transactions that are usually settled on the trade date or within a couple of days of the trade date. For example, spot in the foreign exchange market refers to all currency transactions that are settled in two business days’ time.
Spot Foreign Exchange
MARKET: FX
A transaction to exchange one currency for another at a rate agreed today (spot rate) for settlement in two business days from the transaction date.
Spot/Next
MARKET: FX
A foreign exchange swap transaction, for settlement on the second business day, against the third business day after the transaction date.
Spot Value
MARKET: FX
A payment of one currency against another which is made two business days after the transaction (deal) date. Also known as ‘T + 2’.
Spread
MARKET: General
The difference in price or yield between two assets that differ by type of financial instrument, maturity, strike or some other factor. An example of a spread is the spread between government and corporate issued fixed income securities.
Spread betting
MARKET: General
Spread betting is any of various types of gambling on the outcome of an event, where the pay-off is based on the accuracy of the bet, rather than a simple "win or lose" outcome. A spread is a range of outcomes, and the bet is whether the outcome will be above or below the spread. Spread betting carries a high level of risk, with potential losses or gains far in excess of the original money bet.
Square Position
MARKET: General
Square position means that both a buy and sell leg/side of a transaction have been concluded and that no exposure to a change in market prices, values or rates remains.
Straits Times Index
MARKET: General
The Straits Times Index (STI) is a market value-weighted stock market index based on the stocks of 30 representative companies listed on the Singapore Exchange. Launched in the wake of a major sectoral re-classification of listed companies by the Singapore Exchange, which saw the removal of the "industrials" category, the STI replaced the Straits Times Industrials Index (STII), and began trading on 31 August 1998 at 885.26 points, in continuation of where the STII left off. At that time it represented 78% of the average daily traded value over a 12-month period and 61.2% of total market capitalisation on the exchange.
Stop-loss
MARKET: General
The predetermined value/price/rate or level at which a trader has to exit an open position and realise a loss.
Stop-loss Order
MARKET: General
An order placed with a broker or other market participant to buy or sell an asset, security, instrument, currency or commodity should the market price/rate/level reach a certain specified limit. The stop-loss order limits the loss to the trader placing the order. These orders are also known as limit orders and become market orders when the stop loss price is reached (triggered). A buy stop-loss is placed above the current market price when a trader is short, and a sell stop-loss is placed below the current market price when the trader is long.
Stop-profit
MARKET: General
A predetermined value/price/rate or level at which a trader has to exit an open position and realise a profit.
Straddle
MARKET: Options
A long (short) straddle represents an option strategy which is entered into if the view is that the underlying asset will be volatile (stable) over the life of the option strategy. This represents a view of the underlying volatility in the asset price, currency, commodity price etc., with no particular view of the direction of the actual movement (up or down). The long (short) straddle will realise a profit if the market suffers from substantial (modest) volatility.
Strangle
MARKET: Options
Buying (selling) a strangle involves the simultaneous purchase (sale) of a call and a put option on the same underlying asset, commodity or currency with the same maturity, but at different strike prices, generally strikes which are both out-of-the-money. This option strategy represents a view on the volatility of the underlying price/rate and not the actual direction of the move. The long (short) strangle will realise a profit if the market experiences severe (reserved) volatility over the period of the strategy.
Strike Price
MARKET: Options
The price (rate/level) at which the holder (buyer) of an option contract exercises the right to buy (call) or sell (put) if it has economic value to do so. This is also known as an exercise price.
Strips
MARKET: Fixed Income
An acronym for “Separate Trading of Registered Interest and Principal Securities”. STRIPS are fixed-income securities which are generally sold at a discount to their face value with no interest (coupon) payments during their life. Strips pay par (face) value at maturity.
Structured Notes
MARKET: Derivatives
Fixed income securities (instruments) with embedded derivative products.
Substitute Good
MARKET: Economics
A product or service that partly satisfies the need of a consumer that another product or service fulfills. For a product to be a substitute of another good, it must share a particular relationship with that good. When a good's price increases, the demand for its substitute will increase because consumers will go looking for a cheaper alternative. Conversely, when a good's price decreases, the demand for its substitute will decrease./p>
Support Level
MARKET: General
A price/level reached during a downward or bear trend in the market where there is consistent buying pressure which prevents the price from falling further for a period of time. This buying pressure is often the result of large limit orders placed at or near the support level.
Swap Curve
MARKET: Derivatives
The name given to the swap’s equivalent of a yield curve. The swap curve identifies the relationship between swap rates at different maturities, denominated in the same currency.
Swap Rate
MARKET: Derivatives
The rate (coupon) of the fixed portion (side/leg) of an interest rate swap. This is the rate which one of the parties will receive (pay) in exchange for paying (receiving) the floating rate benchmark of the swap contract.
Swaption
MARKET: Derivatives
Or swap option. An option contract that gives the buyer (holder) the right, but not the obligation, to enter into a swap contract at a pre-specified fixed rate (swap coupon) and for a pre-determined time period.
Swissie
A slang term for the Swiss franc
Synthetic Position
MARKET: General
Created when the trader has an equivalent exposure to changes in market prices (rates) without having entered into the actual position in the underlying market. An example of a synthetic position would be a trader creating an exposure to the FX forward rate by entering into a set of spot FX and money market transactions in place of a forward FX contract.
Systemic Risk
MARKET: Risk Management
The risk that greatly concerns derivatives and market regulators. This is the risk that derivatives permit the transmission of risk across previously unrelated markets, thus making it more likely for a large shock in one to transmit (with negative consequences) to others. It is also used to describe the risk supposedly inherent in the concentration of derivatives business at a small number of large financial institutions or market participants. If, the argument runs, one of these were to fail, the whole financial system would be threatened. No period in financial market history has demonstrated this risk more than the global financial crises of 2007 – 2008.
