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GlobalDAT™
Reversal Stop An order to reverse position when a specific price is hit.
Registered Representative An individual who is licensed to sell securities and has passed a
series of tests (i.e., Series 7). "Registered" means licensed by the Securities and Exchange
Commission, the New York Stock Exchange and the NASD.
Risk The potential to lose money (principal and any earnings) or not to make money on an
investment.
Risk Tolerance An investor's personal ability or willingness to endure declines in the prices of
investments.
Round Lot A unit of trading or a multiple thereof, generally consisting of 100 shares of stock.
Secondary market A market in which an investor purchases a security from another investor
rather than the issuer, subsequent to the original issuance in the primary market.
Sector A distinct subset of a market or industry, whose components share similar
characteristics.
Securities and Exchange Commission (SEC) The federal government agency that regulates
mutual funds, registered investment advisers, the stock and bond markets and securities
broker-dealers. As established by Congress, it helps to protect investors against fraudulent
and manipulative acts in the securities markets by administering the Securities Act of 1933
and 1934, the Securities Act Amendments of 1975, the Trust Indenture Act, the Investment
Company Act of 1940, and the Investment Advisers Act.
Securities Investor Protection Corporation (SIPC) A nonprofit membership corporation
created by an act of Congress to protect clients of brokerage firms that are forced into
bankruptcy. SIPC provides customers with protection up to $500,000 (up to $100,000 on cash).
SIPC coverage does not protect against a decline in value of securities.
Security A document representing evidence of a debt or equity.
SelectNET SelectNET is an ECN that crosses orders and is supported by the NASD. SelectNet
orders must be at or between the spread.
Sell To transfer ownership of a security or other asset in exchange for money or value.
Settlement Delivery of securities in exchange for payment after a securities trade. Regular
way settlement, used for most securities, is three business days from the trade date.
Government bonds and options settle the next business day. A transaction done for cash
settles the same day.
Share A unit of equity ownership in a corporation, represented by a stock certificate, which
names the company and the shareowner. Also a unit of ownership in a mutual fund.
Short Interest Shares that have been sold short but not yet repurchased.
Short Sale To sell a stock you do not currently own. To go short you "borrow" stock from the
Broker/Dealer, then sell the stock, with the intent to buy the stock back at a lower price than
you had initially had sold it for. A short sale can only take place on an 'up tick' or 'zero-plus
tick' (See 'Ticks').
Short-term Capital Gain A profit on the sale of a security or mutual fund share held for one
year or less.
Small Capitalization Stock (Small Cap) The stock of companies whose capitalization is less
than $250 million.
SOES Small Order Execution System. The SOES system was developed in 1984, but made
mandatory in 1988 in response to the crash of 1987. It is a non-negotiated exchange where
Market Makers place offers and bids and are required to meet certain fill requirements set
forth in their participation agreement with the NASD.
Specialist Trader on the market floor assigned to fill bids/orders in a specific stock out of
his/her own account when the order has no competing bid/order to ensure an orderly market.
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