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SPAN The Standard Portfolio Analysis of Risk Performance (SPAN) bond system is a portfolio-based method of computing margin requirements on futures and options. SPAN has been adopted by all major U.S. exchanges, many foreign boards of trade and other participants in the futures industry.
SRO See Self-Regulatory Organization.
Sales Practice Action Type A violation arising from the solicitation and servicing of customer accounts, but not including trade practice or recordkeeping matters.
Satisfactorily Subordinated Liabilities Liabilities of an FCM or IB which are subordinated to the claims of all general creditors of the FCM or independent IB pursuant to subordination agreements which meet certain standards.
Scalper A floor trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.
Secondary Market Market where previously issued securities are bought and sold.
Security Common or preferred stock; a bond of a corporation, government, or quasi-government body.
Segregated Account A special account used to hold and separate customers' assets from those of the broker or firm.
Segregated Funds The amount of money, securities and property due to commodity futures or options customers which is held in segregated accounts in compliance with Section 4d of the Commodity Exchange Act and CFTC Regulations. Such money, securities or property may not be commingled with the money, securities and property of the FCM.
Self Regulatory Organization (SRO) Self-regulatory organizations (i.e., the futures exchanges and National Futures Association) enforce minimum financial and sales practice requirements for their members. See also Designated Self-Regulatory Organization.
Sell on Close To sell at the end of the trading session within the closing range price.
Sell on Opening To sell at the beginning of a trading session within the open price range.
Seller's Market A condition of the market in which there is a scarcity of goods available and hence sellers can obtain better conditions of sale or higher prices.
Seller's Option The right of a seller to select, within the limits prescribed by a contract, the quality of the commodity delivered and the time and place of delivery.
Selling Hedge Selling futures contracts to protect against possible decreased prices of commodities.
Settlement Parties resolve their differences without having a trial, commonly without any determination of the merits of the case.
Settlement Agreement A document that spells out the terms of a resolution by the parties without an adjudication.
Settlement Price The daily price at which the clearing house settles all accounts between clearing members for each contract month. Settlement prices are used to determine both margin calls and invoice prices for deliveries. The term also refers to a price established by the clearing organization to calculate account values and determine margins for those positions still held and not yet liquidated.
Short One who has sold futures contracts or the cash commodity. Opposite of Long.
Short Covering Purchasing futures to offset a short position.
Short Hedge Selling futures contracts to protect against possible declining prices of commodities. Opposite of Long Hedge.
Short Selling Selling a futures contract with the idea of delivering on it or offsetting it at a later date.
Short Squeeze A market situation in which the lack of supplies tends to force shorts to cover their positions by offset at higher prices.
Short the Basis The purchase of futures as a hedge against a commitment to sell in the cash or spot markets. Opposite of Long the Basis.
Soft A description of a price which is gradually weakening. Also refers to commodities such as sugar, cocoa, and coffee.
Sold Out Market When liquidation of a weakly held position has been completed, and offerings become scarce, the market is said to be sold out.
Sole Proprietorship A form of business organization in which an individual is fully and personally liable for all the obligations (including debts) of the business, is entitled to all of its profits and exercises complete managerial control.
Specialist System A type of trading commonly used for the exchange trading of securities in which one individual or firm acts as a market-maker in a particular security, with the obligation to see that trading in that security is fair and orderly by offsetting temporary imbalances in supply and demand by trading for his own account.
Speculative Limit The maximum position, either net long or net short, in one commodity future (or option) or in all futures (or options) of one commodity combined which may be held or controlled by one person as prescribed by an exchange and/or by the CFTC.
Speculative Position Limit The maximum position, either net long or net short, in one commodity future (or option) or in all futures (or options) of one commodity combined which may be held or controlled by one person as prescribed by an exchange and/or by the CFTC.
Speculative Position Limit Action Type A violation arising from exceeding limitations placed upon the number of contracts that may be held by a party at one time.
Speculator One who tries to profit from buying and selling futures and/or options contracts by anticipating future price movements.
Spot Commodity Usually refers to a cash market price for a physical commodity that is available for immediate delivery.
Spot Market See Cash Market.
Spot Month The futures contract which matures and becomes deliverable during the present month.
Spot Price The price at which a physical commodity for immediate delivery is selling at a given time and place.
Spread The purchase of one futures delivery month against the sale of another futures delivery month of the same commodity; the purchase of one delivery month of one commodity against the sale of that same delivery month of a different commodity; or the purchase of one commodity in one market against the sale of the commodity in another market, to take advantage of a profit from a change in price relationships. The term spread is also used to refer to the difference between the price of a futures month and the price of another month of the same commodity. A spread can also apply to options.
Spreading The simultaneous buying and selling of two related markets in the expectation that a profit will be made when the position is offset.
Squeeze A market situation in which the lack of supplies tends to force shorts to cover their positions by offset at higher prices.
Stay An order whereby some action is forbidden or held in abeyance until some event occurs or the issuing body lifts its order. Frequently, an order preventing the enforcement of a Decision or Order in a matter while it is on appeal.
Stock Index An indicator used to measure and report value changes in a selected group of stocks. How a particular stock index tracks the market depends on its composition; the sampling of stocks, the weighing of individual stocks, and the method of averaging used to establish an index.
Stock Market A market in which shares of stock are bought and sold.
Stop Close Only Order A stop order which can only be executed, if possible, during the closing period of the market.
Stop Limit Order A stop limit order is an order that goes into force as soon as there is a trade at the specified price. However, the order can only be filled at the stop limit price or better.
Stop Order An order that becomes a market order when the futures contract reaches a particular price level. A sell stop is placed below the market, a buy stop is placed above the market.
Straddle See Spread.
Strangle An option position consisting of the purchase or sale of put and call options having the same expiration but different strike prices.
Strike Price The price at which the buyer of a call (put) option may choose to exercise his right to purchase (sell) the underlying futures contract.
Summary Action An action that is taken quickly and without a hearing before the action is taken.
Summary Judgment A decision made on the basis of statements and evidence presented for the record without a trial. It is used when there is no dispute as to the facts of the case, and one party is entitled to judgment as a matter of law.
Summary Proceeding A form of adjudication in which ordinary legal procedures are disregarded so that the issue at hand may be resolved in a timely fashion. Usually, a summary proceeding is limited to a single issue.
Support The place on a chart where the buying of futures contracts is sufficient to halt a price decline.
Swap In general, the exchange of one asset or liability for a similar asset or liability for the purpose of lengthening or shortening maturities, or raising or lowering coupon rates, to maximize revenue or minimize financing costs.
Swaption An option to enter into a swap ( i.e., the right, but not the obligation, to enter into a specified type of swap at a specified future date).
Switch Offsetting a position in one delivery month of a commodity and simultaneous initiation of a similar position in another delivery month of the same commodity.
Systemic Risk Risk that the financial markets as a whole will cease to operate or will operate inefficiently.

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