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Glossary

We have compiled a comprehensive A-Z glossary of share dealing and investment terms.

S

S&P 500
The top 500 (mainly industrial) US companies (includes some from both Dow Jones and NASDAQ)

Scrip Dividend
An issue of shares available to shareholders that replaces a dividend payment. Shareholders have the option to forgo their dividend for the share alternative.

Securities
General name for stocks and shares of all types.

Senior Debt

Borrowed money that a company must repay first if it goes out of business. If a company goes bankrupt, senior debtholders, who are often bondholders or banks that have issued revolving credit lines, are most likely to be repaid.

Senior debt is secured by collateral, and that collateral can be sold to repay the senior debt holders. As such, senior debt is considered lower risk and carries a relatively low interest rate. Even though senior debtholders are the first in line to be repaid, they will not necessarily receive the full amount they are owed in a worst-case scenario.

Settlement
The process of transferring stock from seller to buyer and arranging the corresponding movement of money between the two parties (see CREST).

Short Selling
Is a technique that sees investors borrow an asset, such as shares, currencies or oil contracts, from another investor and then sell that asset in the relevant market hoping the price will fall.

The aim is to buy back the asset at a lower price and return it to its owner, pocketing the difference.

We do not permit short selling

SIPP
Self Invested Personal Pension.

Stamp Duty
A Government tax levied on share dealing, currently 0.5% on purchases of UK stocks and 1% on Irish stocks.

Stockbroker
An Exchange member firm that provides advice and dealing services to the public.

Subordinated Debt

A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings.

In the case of default, creditors with subordinated debt wouldn't get paid out until after the senior debtholders were paid in full. Therefore, subordinated debt is more risky than unsubordinated debt.

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