All or None
Directs the broker to attempt to fill the entire amount of the order or none of it during the time limit you specify. This differs from "Fill or Kill" orders because "All or None" orders do not require immediate execution. Only applicable to Limit Orders.
American Depositary Receipt (ADR)
Receipt for shares of foreign-based companies that entitle the shareholder to all dividends and capital gains. ADRs allow Americans to buy shares of foreign-based corporations' securities at American Exchanges instead of having to go to overseas exchanges.
Arbitrage
Profiting from the differences in price when the same security, currency or commodity is traded on two or more markets.
Ask
The lowest price at which someone is willing to sell a security.
Asset Allocation
The strategy of spreading your investment funds across categories of assets such as Stocks, Bonds and Cash Equivalents to help offset risks and rewards, based on your goals, time horizon and risk tolerance.
Asset Class A broad categorization of an investment. The main asset classes are Stocks, Bonds and Cash Equivalents.
Assets Any item of monetary value owned by an individual or corporation.
Companies have two basic types of assets: tangible and intangible. Tangible assets include equipment, inventory, and real property. Intangible assets include goodwill (the value of the company's name in the market), patents and other intellectual property that are owned by a company and given financial value in the company's balance sheet.
Average Maturity The lifetime of a bond, concluding when the final payment of that obligation is due.
Benchmark A standard used for comparison. For example, the performance of some index mutual funds is compared to the performance of the S & P 500® Index which serves as a benchmark.
Beta
A statistical measure of a security's or portfolio's volatility (price fluctuations) relative to the market as a whole. (The beta of the overall market is defined as 1, and is represented by the S & P 500® Index over the last 36 months). A security with a beta of 1 indicates its price moves exactly with the overall market. A beta greater than 1 is more volatile than the overall market, while a beta less than 1 indicates that the security's price is more stable than the market (in general and over a long time period).
Bid The highest price at which someone is willing to buy a security.
Blue Chip Describes stocks of companies known for high quality management or products who have a long history of stable earnings and/or dividend growth.
Bond A long-term debt security of the Government or a corporation with maturity of 10 years or more from the issue date. Interest is usually paid every six months and its face value returned, repaid at maturity. The minimum denomination is $1,000, with $1,000 increments thereafter.
Brokerage Account An account with a brokerage firm that holds your investments, which allows you to buy and sell securities.
Bulletin Board Stocks
These stocks are part of the non-NASDAQ over-the-counter market, which are not listed on an exchange.
Buy
Indicates you want to purchase a security.
Buy to Close
You "close" a short option position when you buy it back. You must be pre-approved by Schwab to trade options. See Option.
Buy to Open
You "open" a long position when you buy an option. You must be pre-approved by Schwab to trade options. See Option.
Buying Power
This is the maximum dollar value of marginable securities that you can buy in your margin account without depositing additional equity. Buying power is calculated at the close of business each day and may fluctuate throughout the day.
Call Option
Gives its buyer the right to buy 100 shares of the underlying security at a fixed price before a specified expiration date. Call buyers hope the price of the stock will rise. Call sellers hope the price will stay the same or go down. You must be pre-approved by Schwab to trade options. See Put Option.
Capital Appreciation
The growth of the principal of your investments.
Capital Gains The difference in value between what you originally paid for an investment and the price at which it was sold, assuming the investment gained value.
Capital Loss
The result when an investment is sold for less than its original purchase price. For comparison see Capital Gains.
Cash Account
A type of brokerage account that requires you pay for trades in full by the settlement date. Some customers have both Cash and Margin Accounts.
Cash Available The dollar amount available in your account to buy non-marginable securities without depositing additional equity. It includes the dollar amount of cash in your account plus the loan value of your marginable securities.
Cash Investments Relatively safe and liquid assets. These types of investments can
be readily converted into cash under most conditions with minimal impairments to principal and/or interest. Cash investments include: Treasury bills (T-bills), Money market funds, and Short-term Certificates of Deposits (CD).
Cash-up-front
A requirement for funds on deposit or on receipt in a Schwab office at the time you enter your order. Cash-up-front is required to trade certain types of securities and is also required for all orders placed in accounts that have a cash-up-front restriction imposed on them.
Closed Order
Indicates that a trade order is no longer an active order because it has either been executed or cancelled.
Closed-end Mutual Funds A mutual fund that issues a set number of shares, which then are only re-sold on the secondary market exchanges like regular stock shares.
Commissions
The fees paid for executing a trade.
Common Stock
An "equity" security. Common stock is "ownership" of a corporation. An owner of a company's common stock is considered to have an equity position in the corporate structure of that company.
Compounding
The computation of interest paid, using the principal plus the previously earned interest. Compounding measures the growth of an investment when dividends or appreciation are reinvested.
Conditions
Time and execution instructions included when you place a stock trade order. Time conditions indicate how long the order can be open; execution conditions identify how you want the order to be filled.
Contingent Beneficiary A person of organization designated to receive the funds or other property from a trust, insurance policy or retirement account if the primary beneficiary dies or no longer exists.
Corporate Bond
Debt obligations issued by corporations as an alternative to offering equity ownership by issuing stock. Like most municipal bonds and Treasuries, most corporate bonds pay semi-annual interest and promise to return their principal when they mature. Maturities range from 1 to 30 years.
Corporate Governance Standards
These are the Securities and Exchange Commission rules that a corporation must follow after meeting initial NASDAQ listing requirements, such as holding an annual shareholders meeting, and distributing annual and interim reports to shareholders.
Cost Basis Cost basis is used to determine capital gains and losses. Generally, cost basis is the original price of a security, including commissions and applicable fees. There are special rules for determining basis in some situations (i.e., property received by gift or bequest, as compensation or in a tax-free exchange). (See your tax advisor for more information)
Current Yield The annual interest on a bond divided by the current market price.
Day Order
Automatically expires at the end of the day's standard market trading session if it is not filled. All Market Orders are automatically Day orders. Orders are generally considered to be day orders unless otherwise specified.
Derivative Instrument A financial instrument or security whose value is based in part upon another security . For example, a stock option is a derivative instrument because its value is based in part upon the value of the underlying stock.
Developed Market
A sector within international stocks made up of countries where the government and economy are more soundly established.
Dilution
Effect on earnings per share and book value per share if all convertible securities were converted and all warrants and stock options were exercised.
Diversification A portfolio strategy designed to spread risk by allocating assets among a variety of investments (such as Stocks, Bonds, and Cash Equivalents).
Dividend
A distribution of company Earnings to shareholders. Dividends are typically paid to you in cash or stock. You may choose automatic Dividend Reinvestment to buy more shares.
Dividend Amount
Value of last quarterly cash dividend or the number of shares an investor receives for each share owned in a stock dividend.
Dividend Reinvestment
An investment plan in which you can elect to automatically reinvest cash Dividends and capital gains distributions, thereby accumulating more shares.
Dividend Yield A stock's market value in relationship to its dividend amount expressed as a percentage. Calculation tip: Divide the dividend by the market value of the stock.
Do Not Reduce (DNR)
Instructs the broker not to reduce your limit price by the amount of the cash dividend when a stock goes ex-dividend and the market price is reduced by the amount of the dividend. You can specify DNR on Limit Orders to Buy, Stop Orders to Sell, or on Stop Limit Orders to Sell.
Dollar Cost Averaging
A strategy of buying securities (typically mutual funds) in fixed dollar amounts at scheduled intervals, with the aim being to lower the average cost per share over time. Dollar cost averaging does not assure a profit and does not protect against loss in declining markets.
Dow Jones Industrial Average (DJIA)
Measure of the performance of the collection of 30 "blue-chip" stocks traded on the New York Stock Exchange (NYSE), considered the leaders of the market.
Earnings The amount of profit a company realizes over a given time period after all costs, expenses, and taxes have been paid.
Earnings Per Share (EPS)
A company's earnings, also known as net income or net profit, divided by the number of shares outstanding. Calculation tip: Four times the last quarter's earnings divided by the number of shares outstanding.
Earnings Per Share Date
Date of the last earnings announcement.
Electronic Funds Transfer
Transferring funds between accounts and firms electronically.
Emerging Market
A sector within international stocks made up of developing countries, such as Kenya and China, where economic and political conditions may be more volatile.
Exchange
A marketplace, or any organization or group that provides or maintains a marketplace for trading securities, options, futures, or commodities. Examples of exchanges: New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX).
Ex-Dividend Date
Date a split or dividend is reflected in the price of the security (if you buy a stock on the ex-dividend date, you are not entitled to the dividend); for splits, this is the trading day after the distribution is made.
Expense Ratio
A mutual fund's cost of doing business passed on to shareholders -- expressed as a percentage of assets.
Face Value
The displayed value on a bond also called principal or par value.
Fed Call
Also known as Regulation T or Reg T Call. This type of call occurs when establishing a margin position. Investors must deposit 50% of the cost of the trade per current Federal Reserve requirements. Schwab reserves the right to impose higher or Special Maintenance requirements.
Federal Deposit Insurance Corporation (FDIC)
A U.S. Government agency that insures cash deposits, including certificates of deposit, that have been placed in member institutions. The basic insured amount for each depositor is capped at $100,000. The FDIC's mission is to maintain the stability of and public confidence in the U.S. banking system.
Fiduciary
One is legally required to act in the best interest and trust of a beneficiary or minor.
Fill or Kill (FOK)
Instructions that your order must immediately be filled in its entirety or canceled. Only applicable to Limit Orders.
Fixed Income Investments
These debt securities (or IOUs for borrowed money) include bonds, money market instruments or preferred stock. They obligate the borrower to pay the bond owner a fixed rate of interest during the term of the loan and to return the principal or face value when the loan matures, and a preferred shareholder would get a fixed dividend. A variety of institutions issue debt obligations, including the U.S. government, state and local governments, publicly held companies, banks and savings and loans.
Fixed Income Securities
Debt securities or IOUs for borrowed money. They obligate the borrower to pay the owner interest during the term of the loan and to return the principal or face value, when the loan matures. A variety of institutions issue debt obligations including the U.S. government, state and local governments, publicly held companies, banks, and savings and loans.
Freeriding
This trading violation is the result of buying a security in your Cash Account and then selling the same security without making separate payment on the full purchase price by Settlement Date. This situation is called freeriding because basically it is unauthorized borrowing to pay for a trade.
Halted Securities
Occasionally, trading on a given security may be suspended due to a variety of conditions including news and corporate actions. If the security you are attempting to trade has been halted, you can place an order but it will not be executed until the trading halt is lifted. If you have an open order for a security that subsequently is halted, your order will be eligible for execution after the halt has been lifted. Please be aware that when the security resumes trading it may be at a price significantly above or below the most recent trade price.
High The highest execution price of a trade that day, or on the last trading day.
Immediate or Cancel
Instructions to immediately fill your order either partially or entirely -- or cancel the order. Only applicable to Limit Orders on listed stocks.
Income Strategy
An investment strategy that pursues income, typically by investing in bonds and high-yielding stocks.
Index
A statistical composite that measures changes in the economy or financial markets. Some indexes are used as benchmarks that economic or financial performance is measured against. Some well-known market indexes include: Standard & Poor's 500® Index, Dow Jones Industrial Average®, NASDAQ Composite® Index, Consumer Price Index, and Russell 2000. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs or expenses.
Indexing
Investing for market returns by purchasing shares in an index fund.
Industrials
In stock market language, this is a general category of firms in the business of manufacturing products. Industrials exclude utility, transportation and financial services companies.
Inflation
An increase in the cost of goods and services which, in turn, decreases the buying power of money over time. Inflation is usually measured by the Consumer Price Index and Product Price Index.
International Stock
The stock of a company that is based outside the United States.
Investment Objective
The outcome desired by an investor or a mutual fund. For example, "current income" or "capital appreciation" are types of investment objectives.
Large Cap
Generally, companies with a market value (capitalization) of over $10 billion. Large cap companies are typically well-established with solid histories of growth and dividend payments.
Last Split Date
The last date on which the shares of a security were increased or decreased by splitting.
Last Trade
The price at which the last trade was executed; after market close, this is the closing price.
Last Trade Date and Time
The date and time the security was last traded.
Lehman Brother (LB) Bond Indexes
Bond indexes are performance benchmarks for different sectors of the bond market. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs or expenses.
Leverage
The degree to which a company or individual is using borrowed money.
Liabilities
The sum of all outstanding debts -- what a company or individual owes its creditors.
Limit Order
A request to buy or sell a security only at a price that you specify (the Limit) or better. Place a limit order when you're willing to wait for the price to move and risk that the order might not be executed, because execution of limit orders is not guaranteed. However, if executed, the price you set or better is guaranteed. Buy orders will execute at or below your limit and Sell orders will execute at or above your limit. For comparison, see Market Order.
You may also place time conditions on a limit order. See Time Limits/Conditions.
In a Fast Market you can use a limit order in the opposite way to help reduce risk. In this case you can place a limit order to make sure that you don't buy or sell at a dramatically different price than you expect. When a stock price is moving fast, you can use a limit order to state the maximum price you are willing to pay (or, if selling, the minimum price you are willing to accept). In this case, place your limit at or above the current ask price on a Buy, or at or below the bid price on a Sell order. However, if the stock doesn't hit your limit price, the order won't be executed.
Liquid Assets
A term describing investments that can easily be turned into cash. See Cash Investments.
Liquid Investment
An investment that can be easily converted to cash.
Liquid Reserve
Personal savings that can be accessed immediately.
Liquidation
When you buy a security that creates a cash debit or US Federal Reserve margin Reg T Call, and during the following trading day or later you sell another security to cover the cash debit or Fed Call - it results in a trade violation called a Liquidation.
Liquidity
The ability of an asset to quickly be converted into cash. Generally, the greater the number of buyers and sellers of a particular asset, the more liquid it is considered to be.
Load
The sales charge that some fund companies include when you buy or sell their mutual funds. Some funds have a "front-end" load, meaning you pay the sales charge at the time of purchase. Some funds have a "back-end" load, meaning the sales charge is paid at the time of the sale.
Long-term Debt
Liabilities that are repayable for one year or longer.
Lot
A group of shares in a single security that were bought or sold together.
Low
The lowest execution price of a trade that day, or on the last trading day.
Maintenance Call
A "call" for additional funds or acceptable collateral to be immediately deposited into your margin account. This type of margin call is generated when the equity in a margin account does not meet Schwab's established minimum requirement. This can be caused by fluctuations in market prices or your additional use of margin. For comparison see US Federal Reserve margin Reg T.
All margin accounts are governed by the rules and regulations of the US Federal Reserve, NYSE, and/or NASD. At Schwab, a margin account generally receives a maintenance call when equity falls below 35% or $5,000.
Margin
"Buying on margin" means buying securities with money borrowed from a broker/dealer. It allows you to buy certain securities using the assets in your account as collateral for the loan.
Margin can also mean the amount of equity required to buy securities purchased on credit.
Margin Account This type of brokerage account allows you to borrow funds, using your own marginable securities as collateral. The borrowed funds may be used for any purpose, including the purchase of more securities. For comparison see Cash Account.
Margin Balance
The net open balance in your margin account. If negative, you owe Schwab this amount. If positive, the balance is available to earn interest.
Margin Call
This generic term refers to both maintenance calls and "US Federal Reserve Regulation T" calls (also called Reg T or Fed calls). An investor who receives a margin call is required to deposit additional funds or securities in a margin account either because the equity in the account does not meet Schwab's established minimum equity requirement (maintenance call) or because additional securities have been purchased or sold short.
Margin Interest
Margin interest accrues daily and is charged monthly based on your margin balance.
Marginable
A security that may be used as collateral in a margin account. Most exchange and NASDAQ listed securities trading at over $3.50 per share are marginable at Schwab, as are most investment grade fixed income securities, and mutual funds. However, exchange and listed stocks must be $5.00 or greater for initial purchases on margin.
Market Capitalization
The total value of a company's stock.
Market Conditions
The stability or volatility of a securities market at a given time.
Market Indicators
A variety of indices that give an indication of the overall direction and strength of the market.
Market Maker
An individual, corporation, partnership or group of firms that creates the Bid and Ask prices for a given OTC security. The market maker generally maintains inventory and stands ready to buy and sell the security at the quoted price to maintain an orderly market. A Specialist serves a similar purpose for an exchange-traded security.
Market Order
A customer request to buy or sell as quickly as possible at the best price available (the prevailing price) when the order reaches the marketplace. A market order guarantees execution, but not price. For comparison, see Limit Order.
Maturity Date
Date on which the face value and final interest payment of a fixed income security (for example, bond or note) is due and payable by the debt issuer. For bonds, maturity can range from one day to 30 years or more.
Minimum Quantity
Instructs the specialist to buy or sell a specified number of shares at a limit price with the condition that the first fill must be for a minimum number of shares. Use this condition when you will accept a partial fill, but will only accept a minimum number of shares to be bought or sold.
Mortgage-Backed Bonds
Bonds that derive their income from a pool of mortgages.
MSCI-EAFE Index
The acronym for the Morgan Stanley Capital International -- Europe, Australia, Far East Index. It is a performance benchmark for international stocks.
Municipal Bonds
A bond issued by a state, municipality, or revenue district. Municipal bonds (also called "munis") are exempt from federal and, in some cases, state and city taxes. Some US taxpayer investors in bonds or bond funds may be subject to the Alternative Minimum Tax.
NASDAQ
National Association of Securities Dealer Automated Quotations system, designed to facilitate over-the-counter stock trading.
National Association of Securities Dealers (NASD)
Supervised by the Securities Exchange Commission, the NASD standardizes investment practices, sets ethical standards, develops rules and regulations and enforces the rules with an industry disciplinary body.
Net Change
The amount and direction of a security's price change since its previous close.
Net Income
For a business this is the total revenue minus total expenses, which is the same as its net profit or Earnings.
Nominal Rate Also known as nominal yield. The percentage of annual interest which would be earned from a fixed income investment (for example, bonds) if the security was purchased at par value; actual rate of return is usually different.
Odd Lot
This is a securities trade made for less than the "normal trading unit" (Round Lot). In stock trading, any purchase or sale of less than 100 shares is generally considered an odd lot.
Open
The price at which a security opened for trading on a given day.
Open Order
A buy or sell trade order that has not yet been executed or cancelled.
Option
A contract that permits the owner (depending on the type of option held) to purchase or sell a security at a specific ("strike") price until a specified expiration date. An option to purchase a security is a "call." An option to sell a security is a "put." The price of the option itself is the "premium." You must be pre-approved by Schwab to trade options. See Call Option and Put Option.
Order Conditions
When placing a trade order, these are the specific instructions you include regarding time and execution conditions. Time conditions indicate how long to leave the order open; execution conditions specify how you want the order to be filled. Also see Special Conditions.
Ordinary Income
Income other than a capital gain. For example, ordinary income includes wages, dividends and interest earned on savings.
Over-the-Counter (OTC)
Over-the-Counter refers to stocks not traded on registered exchanges. Many OTC stocks are traded through the National Association of Securities Dealers Automated Quotations (NASDAQ), National Market System (NMS), OTCBB (Bulletin Board) or the Pink Sheets.
Pay date
The date the shares from a split or dividend are sent to the shareholders.
Performance
The results of an investment's activity over time. Past performance does not guarantee future performance.
Portfolio
All of the various investments held by an individual investor or organization.
Position
Security holdings in an account or portfolio.
Preferred Stock A class of stock that pays dividends at a specified rate and has preference over Common Stock in the payment of dividends and the liquidation of assets. Preferred stockholders may have different voting rights. Not all securities have preferred stocks.
Price
The cost for a security. For mutual funds, price is the net asset value (NAV). For mutual funds with a load, the price including the load is the Public Offering Price (POP).
Price/Earnings Ratio
Price of a stock divided by earnings per share.
Primary Beneficiary
A person or organization designated to receive the funds or other property from a trust, insurance policy, retirement account or other contract.
Primary Market
The market where new securities are issued (usually through a brokerage firm). For comparison, see Secondary Market.
Principal
The amount of money that is financed, borrowed, or invested.
Program Trading
Computer buying (buy program) or selling (sell program) of baskets of 15 or more stocks by index arbitrageurs, specialists, or institutional traders.
Put Option
Gives the buyer the right to sell a number of shares of stock at a price until the option's expiration date. Put buyers hope the price of the stock will fall. Puts may also be purchased to protect an investment in case the price of the stock goes down. You must be pre-approved by Schwab to trade options. See Call Option.
Quantity
The number of shares you want to Buy, Sell or Sell Short.
Quote
The current "spread" relating the bid and the ask for a security. The bid is the highest price at which someone is willing to buy a security. The ask is the lowest price at which someone is willing to sell a security.
Regulation T Call Also called a Fed Call - This is the amount an investor must deposit if buying on margin or selling short, as required by the US Federal Reserve Board's Regulation T. Current US Federal Reserve requirements are 50% of the cost of the trade for equities. Schwab reserves the right to impose higher or Special Maintenance requirements.
Reinvestment
Using earnings or distributions from an investment to purchase additional shares in that security, rather than taking them as cash.
Return
The change in value of an investment over a given period of time, expressed as a percentage of the total amount invested (including reinvestment of any dividends and capital gains distributions).
Rights
Rights allow existing shareholders of a corporation to subscribe to shares of a new issue of common stock before that stock is offered to the public. A right usually has a life of 2 to 4 weeks, is transferable, and entitles the holder to buy the new common stock below the Public Offering Price. Rights are often granted to protect existing shareholders from the effects of dilution.
Risk
The possibility for loss of some or all of the money you invest. Also, the degree of probability for such a loss.
Risk Tolerance
The degree to which an investor can financially and emotionally withstand declines in the value of his or her investments.
Risk/Return Factor
The relationship between an investment's growth potential and its exposure to loss.
Round Lot The basic unit of trading for a particular security. For stocks, the generally accepted unit of trading is 100 shares. See Odd Lot.
Rule 80-B
When there is extraordinary market volatility, Rule 80-B takes effect when the Dow Jones Industrial Average (DJIA) drops a predetermined value below its closing value of the previous trading day. Trading in stocks will halt on the NYSE, AMEX, Regional exchanges and NASDAQ for a set amount of time based on the amount of the decline.
A 10 percent drop (Level 1) in the DJIA will halt trading for:
1 hour if the decline occurs before 2:00 p.m. US Eastern Time (ET) or New York time
30 minutes if the decline occurs between 2:00 p.m. and 2:30 p.m.(ET)
No halt if the decline occurs after 2:30 p.m. (ET)
A 20 percent drop (level 2) in the DJIA will halt trading for:
2 hours if the decline occurs before 1:00 p.m. Eastern Time (ET)
1 hour if the decline occurs between 1:00 p.m. and 2:00 p.m. (ET)
Closed for the remainder of the day if the decline occurs after 2:00 p.m. (ET)
A 30 percent drop (Level 3) in the DJIA, at any time, will result in the market closing for the remainder of the day.
*The point levels will be reset quarterly at 10, 20, and 30 percent of the DJIA by using the DJIA average closing values of the previous month, rounded to the nearest 50 points. Point levels will be adjusted on Jan. 1, April 1, July 1 and Oct. 1. For the exact point levels, customers can contact a Schwab representative:
U.K.: 00 800-0826-5001
U.S.: 1 (800) 362-1774 Switzerland: 1 (602) 355-7300
Russell 2000 Index
A performance benchmark for the U.S. domestic stocks asset category. This index is comprised of 2000 public companies with market capitalization's ranging from approximately $180 million to $1.4 billion.
S&P 500 (Standard & Poor's 500 Index)
Considered to be a benchmark of the overall U.S. stock market. This index is comprised of 500 widely-held, Blue Chip stocks representing industrial, transportation, utility and financial companies with a heavy emphasis in industrials.
Secondary Market
A market where investors buy securities from other investors, rather than from issuers. For comparison, see Primary Market.
Securities Exchange Commission (SEC)
A government regulatory agency that oversees and enforces the securities laws of the United States, publishes rules and guidance for the securities industry, and provides investor education.
Securities Investor Protection Corporation (SIPC)
Insures securities and cash (up to specified limits) in the customer accounts of member brokerage firms against the failure of those firms. The SIPC does not protect investors against market risks.
Security
A stock, bond or other investment instrument issued by a corporation, government or organization that signifies an ownership position or creditor relationship.
Security Type
The type of security such as stock, bond or mutual fund.
Sell
Indicates you already own a security and wish to transfer ownership in exchange for money.
Sell Short Indicate a "sell short" order when you want to borrow stock and sell it, with the understanding that you must buy it back later (hopefully at a lower price) and return it.
Sell to Close
A long option position is closed when it is sold. See Option.
Sell to Open
A short position is opened when an option is sold. See Option.
Settlement Date
The business day by which you must pay for securities purchased or deliver securities sold.
Shares Outstanding
The number of shares that have been issued that are actually in the hands of the public.
Short-term Obligations
Debt instruments, usually to be repaid within a year or less.
Short Term Redemption Fee
This fee is charged when shares are sold within a short period of time. See the fund prospectus for details about the length of the designated holding period.
Small Cap
The stock of a company with a market value (capitalization) of less than $1.5 billion. Small-cap companies tend to be smaller emerging companies and are more volatile than large-cap companies.
Special Conditions
Special conditions may be applied to an order, such as All or None (AON) or Do Not Reduce (DNR).
Special Maintenance
Schwab may impose higher maintenance requirements on certain securities due to their volatility.
Special Memorandum Account (SMA)
This is a special account authorized by the Federal Reserve Board to preserve buying power in your margin account. It reflects any excess equity you have above the required amount (50% for marginable securities). The figure is part of the calculation used to determine your Margin Buying Power. Unlike a credit balance or market value, SMA is a bookkeeping entry that reflects a history of the excess equity* above the required minimum for US Federal Reserve Regulation T, plus all of the charges and releases from the past activity in the account. Once the SMA has been credited with any excess equity, it remains available until used for a purchase or a cash withdrawal. The SMA is retained even if the market value of securities held on margin subsequently declines, which could result in an SMA figure greater than your margin Cash Available (inflated SMA). A Fed call is generated when a trade occurs in an account that does not have sufficient SMA to satisfy the initial requirement of the Federal Reserve.
Specialist
An individual, corporation, partnership, or group of firms that is responsible for a given exchange-traded security. The specialist stands ready to buy and sell shares to maintain an orderly market. A Market Maker serves a similar purpose for an OTC security.
Stock
A document that establishes proportionate company ownership represented as shares. Different types of stocks (e.g., common stock) have different advantages and responsibilities associated with them. As a stockowner, you share in the profits and losses of a company.
Stock Dividends
A dividend paid in stock rather than cash.
Stop Limit Order
A combination of a Limit Order and a Stop order used to protect a profit or limit a loss -- This is a request to Buy or Sell a security at a specified limit price or better, but only after the specified stop price has been reached or passed. Even if the stop price is triggered, a Stop Limit order guarantees the limit price, but not the execution. For comparison, see Stop Order.
Stop Order
Indicates a request to Buy or Sell at the market price, but only when the security trades at or past a price that you specify (called the Stop price). Once the stock price moves to or through the stop price, your pending Stop Order becomes a market order which guarantees execution, but not price. For comparison, see Stop Limit.
STRIPS
Zero coupon Treasuries issued by the U.S. at a discount from face value. Interest is paid as a lump sum at maturity.
Surrender Charges Fees for terminating a Certificate of Deposit (CD), insurance or annuity contract before it matures.
Symbol
The unique 1-5 character designation used to identify a security for trading.
Tax-deferred
For US taxpayers, payment of taxes not due until a time in the future.
Tax-efficient
For US taxpayers, investments that are managed with the objective to minimize tax consequences.
Tax-exempt
For US taxpayers, accounts or investments that generally are free from tax liability.
Tax-free
For US taxpayers, accounts or investments that have no tax consequences.
Tick A small price movement of a stock. Also, the direction the price moved on its last sale. For example, an up-tick means the last trade was at a higher price than the previous one.
Ticker Symbol
The unique 1-5 character designation used to identify a security for trading. Another name for symbol.
Time Conditions
The following time limits may be applied to Stop, Limit, or Stop Limit orders: Day Only, Good Until Canceled, Fill or Kill, Immediate or Cancel.
Time Horizon
The amount of time, usually years, that you expect to keep an amount of money invested.
Total Assets
The combined value of all items of monetary value owned by an individual or business.
A company's assets include tangible assets, such as equipment, inventory and real property, and intangible assets such as goodwill (the value of a company's name in the market), patents and other intellectual property, which are owned by a company and given monetary value in the company's balance sheet.
Total Revenue Total of all sales and income generated by a company.
Trade Confirmation Written statement acknowledging a securities transaction and its details.
Treasury Bill
A short-term debt security of the U.S. government, also known as a "T-Bill." T-Bills are usually held for a short time period (i.e., three months to one year) and can easily be converted into cash. T-Bills are typically sold at a discount and are exempt from state and local taxes. The money you will make on a T-Bill is the difference between the face value of the T-Bill and what you paid for it. T-Bills are sold in $1000 increments.
Treasury Note
A mid-term debt security of the U.S. Government, with maturities ranging from two to ten years that pay a fixed rate of interest every six months and returns its face value at maturity. Minimum denomination is $5,000 plus $1,000 increments for a two to three year maturity, or $1,000 plus $1,000 for a four to ten year maturity.
Treasury Security
Debt obligations of the U.S. Government that are issued through the Department of the Treasury. Since they are backed by the full faith and credit of the U. S. Government, they are considered virtually free from risk of default. For individual investors, the income of Treasuries is exempt from state and local taxes.
Trust Account
A legal plan by which the trustor places assets in trust for a beneficiary.
Volatility
The magnitude and frequency of changes in a security value within a short period. The more volatile an investment, the higher its risk and potential return. Volatility is usually measured by calculating the annualized standard deviation of daily change in price.
Volume
The daily number of shares traded in a security.
Warrants
A type of security usually issued together with a bond or preferred stock that allows the holder to buy a proportionate amount of common stock at a fixed price (usually above the market price at the time of issuance) for a period of years or to perpetuity. Warrants are transferable and trade on the major exchanges. They are also known as Subscription Warrants.
Yield
The annual rate of return of an investment paid in dividends or interest, expressed as a percentage.
For a mutual fund, the yield is the rate of return earned by the securities in the fund's portfolio, less the funds expenses during a specified period. A fund's yield is expressed as a percentage of the maximum offering price per share on a specified date.
Zero Coupon Bond
Zeros are securities that do not pay interest during their terms but are sold at a discount from their face value. A zero coupon bond generally increases in value as it approaches maturity, and the return comes solely from its appreciation. The dollar amount difference between the purchase price and the maturity value represents the yield or accretion value. Maturities range from 1 to 30 years.
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