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Settlement Date: Date on which a securities transaction must be settled. Buy orders must be paid for in cash and sell orders must have securities in legal (good) delivery form presented to the new owner. REGULAR WAY SETTLEMENT of stock and bond transactions is three business days after the trade was executed. Listed options, government securities and mutual funds settle the next business day following the transaction. The brokerage firm representing the customer must settle on the specified settlement date whether or not the customer has paid the monies or delivered securities to the firm.

Short Selling: Sale of any security not owned by the seller. The security is 'borrowed' from the brokerage firm and all short sales must be done in a short (margin related) account. Customer's must state that a sale will be 'short' at the time the order is placed with the broker. The customer "selling short" is using a legitimate trading strategy and assumes the risk that he will be able to buy the stock at a more favorable price than the price at which he sold short. See the explanation of short selling for more complete information on short selling.

Specialists: Specialist firms are those securities firms which hold seats on national securities exchanges and are charged with maintaining orderly markets in the securities in which they have exclusive franchises. They buy securities from investors who want to sell and sell when investors want to buy.

Spin-off: A corporate divestiture where a division or subsidiary becomes its own company. In most cases, shareholders of the parent company receive a pro rata allocation of the new company's stock.

Spread Order (Option): An order to buy one or more option contracts and to sell one or more option contracts if a different series of the same class of options.

Spread (Price): The difference between the bid and asked price for a stock. For example, if a stock is bid at 25 and asking 25 1/4 it has a 1/4 point (equal to 25 cents) spread. The spread for a security is influenced by a number of factors, including:

Split: The multiplication of the outstanding number of shares of a corporation into a larger number of shares. A two-for-one split by a company with one million shares outstanding results in two million shares outstanding. Holders of 100 shares before the split would have 200 shares after the split.

Stabilization: In an effort to maintain the value of a newly issued stock, the lead manager may place a bid for shares to try to prevent the IPO from declining in value.

Stock Symbol: A unique letter symbol assigned to a security. For U.S. securities, one- two- and three-letter symbols indicate that the security is listed and trades on an exchange. NASDAQ traded securities have a unique four- or five-letter symbol assigned. If a fifth letter appears on a NASDAQ security, it identifies the issue as other than a single issue of common stock or capital stock. A list of fifth-letter identifiers and a description of what each represents follows:

Stop Order: Order type which becomes a market order when the stock trades at or beyond the specified price. A sell stop is placed below the current trading price and is used to protect unrealized profits or limit losses on holdings should the price begin to decline.

Story Stock: If a company's investor interest is generated by a good story, rather than actual earnings or revenues, it is referred to as a story stock. In many cases, internet stocks would fall into this category because they may not be showing a profit despite very high valuations.

Straddle Order: The purchase or sale of the same number of puts and calls, with the same exercise price and the same expiration dates.

Street Name: Securities held in the name of a brokerage firm or its nominee rather than the customer's name. All securities purchased on margin and those the customer wishes to have the broker hold are held in street name. Since the securities are in the broker's custody, transfer of the shares at the time of sale is easier than if the stock were registered in the customer's name and physical certificates had to be transferred.

Strike Price: Dollar price per share at which, during the life of an option, a call option buyer can purchase the underlying stock or a put option buyer can sell the stock. See the explanation of options trading for more complete information on options.

Syndicate: The group of underwriters formed to underwrite an IPO is called the syndicate or selling group. In most cases, the syndicate doesn't actually have shares of the IPO to sell, they just share the risk involved with the underwriting.