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Glossary: S

These are common terms used in the financial services industry
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S&P 500

A market capitalisation weighted index of the top 500 companies listed in the New York stock exchange (NYSE) or the NASDAQ. Often used as a gauge of sentiment for the US market.

Scalping

A trading strategy that involves placing short-term trades, sometimes less than a minute long, usually to try and capture small price movements.

Sector

A distinct subset of a market whose components share similar characteristics. Stocks are often grouped into different sectors depending upon the company's business. For example the FTSE 100 has banking, oil & gas and pharmaceutical sectors.

Sell limit / limit sell

A conditional trading order that indicates an instrument may be sold only at the designated price or higher.

Sell stop

An order to open a sell position at a price lower than the price at the moment of placing the order. It is subject to price depth ladder and can be slipped to the current market price.

Selling short

This is practice of selling shares that you do not own in the hope that the share price falls before you have to settle the contract. If the price does fall you can then buy the shares at the lower price and pocket the difference. Also see Shorting.

Settlement

The process of a position closing against a specified market level once the position has gone beyond its last dealing time. Also see Expiry.

Shorting

A form of trading where the initial transaction is to sell, for example a CFD position taken in anticipation of a falling market. The position is closed with a buy trade. The trader will profit if the price falls and lose if it rises. When trading FX it refers to selling the base currency against the quote currency.

Slippage

The difference between the requested level of an order and the actual price at which it was executed. Slippage can occur during periods of higher volatility when market prices move rapidly or gap. Also see Fill and Gapping.

Spot price

The price quoted for immediate settlement or delivery of a currency, index, commodity or share (that is payment for and delivery of a product). It’s the current price at which a commodity or currency can be bought or sold at that specific time.

Spot rate

An exchange rate for immediate settlement.

Spread

The difference between the bid and the ask price of a security or asset.

Spread charts

Spread charts show the buy and sell prices plotted into a dual line chart format. A blue line represents the buy price and an orange line represents the sell price; the shaded area is the difference between the two, or ‘the spread’.

Stochastic

A chart indicator used in technical analysis to determine potential trend reversals, indicating an overbought or oversold market condition.

Stock exchange

A market on which securities are traded.

Stock index

Stock indices are a compilation of a number of stocks into one total price, allowing investors to easily follow the performance of certain groups of stocks.

Stockbroker

An exchange member firm which provides advice and dealing services to the public as well as trading on its own account.

Stop entry order

Stop-entry orders allow you to enter a transaction at a selected target price and within a set time period. A stop-entry order to buy is an order at a price above the prevailing market price. A stop-entry order to sell is an order at a price below the prevailing market price. Stop-entry orders are usually subject to slippage.

Stop loss

An order placed to automatically close your position when the price reaches your specified stop-loss price. A stop-loss order is designed to limit a loss on a position. This is not always guaranteed, however, as market conditions may cause the trade to be exited at a slightly different price, due to market gapping or slippage. Also known as a stop order.

Stop order

An order to close a position when prices pass a certain point. A stop order can be attached to an existing position (known as a stop loss) or used to initiate a new position (see Order to open).

Strike price

The price at which a contract can be exercised or settled against in reference to options trading.

Support

A price level that the market doesn’t fall below for some time. When prices fall to a support level the weight of buying outweighs selling and prices tend to be pushed up again. A number of different trend troughs often occur at a support level.

Support level

A technique used in technical analysis to indicate a price floor at which you would expect the price to 'bounce' off. A price point where it is anticipated buyers will enter the market and 'support' the price. The opposite of this is resistance.

Swissie

A slang term for the Swiss franc.

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