Stop-loss order

An arrangement where you instruct the broker to automatically sell a stock if it drops to a certain price.

Stock exchange

A market for buying and selling stocks. The major U.S. exchanges are the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX).

Stock dividends

Dividends paid out in the form of shares of the company’s stock rather than cash. Stock dividends are not taxed until the shares are sold.


An ownership share in a corporation. Each share represents a piece of the corporation’s assets and earnings. Stockholders are usually entitled to vote at shareholder meetings and receive dividends.

Spousal IRA

An individual retirement account set up in the name of a spouse who receives little or no income.

Small cap

Stock issued by a company with a small market capitalization (the value of the tradable shares of the company).

Simplified Employee Pension (SEP)

A retirement plan for small businesses and the self-employed. Both employees and the employer can make contributions to the retirement account.

Short sale

Selling a security you do not yet own but promise to take ownership of at a given point in the future. Investors borrow the security from a broker and sell it, hoping to take advantage of an expected decline in the price of the security.