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Risk & Portfolio Management

Sortino Ratio

Return above a minimum acceptable return per unit of downside deviation only.

Sortino Ratio = (Portfolio Return - Target Return) / Downside Deviation ratio (x, times) Bonds & Fixed Income

Sovereign Gold Bond

A government security denominated in grams of gold, paying interest and redeeming at the prevailing gold price.

Redemption Value = Grams Held x Average Gold Price over the three business days before maturity ₹ Derivatives, Futures & Options

SPAN Margin

The portion of initial margin computed by simulating a portfolio's worst-case loss across a grid of price and volatility scenarios.

SPAN Margin = the largest loss the portfolio would suffer across the scenario array tested by the clearing corporation ₹ Corporate Actions, Dividends & Governance

Special Dividend

A one-off dividend, usually much larger than the regular payout, arising from an unusual event.

Test: the dividend is explicitly designated as non-recurring and is not part of the stated dividend policy ₹ Corporate Actions, Dividends & Governance

Special Resolution

A shareholder resolution requiring at least three-quarters of votes cast in favour to pass.

Test: votes in favour are at least three times the votes against among members voting % Indian Market, Regulation & Taxation

Speculative Income

Income from transactions settled without delivery, which in Indian equity markets means intraday trading.

Test: the contract is settled otherwise than by actual delivery or transfer of the commodity or scrip ₹ Corporate Actions, Dividends & Governance

Spin-Off

The distribution of a subsidiary's shares to a parent's shareholders, creating a separately listed company.

Test: shares in the subsidiary are distributed to the parent's shareholders pro rata, without consideration qualitative Technical Analysis & Chart Patterns

Spinning Top

A candlestick with a small body and long wicks on both sides, indicating a wide range that closed near the open.

Test: Body is a small fraction of the range, with both Upper and Wick Lower substantial and roughly comparable qualitative Orders, Execution & Market Structure

Square Off

Closing an open position by taking the opposite trade in the same quantity, leaving no net exposure.

Test: net position in the security becomes zero after the offsetting trade qualitative Economy, Macro & Market Cycles

Stagflation

The combination of high inflation with weak growth and rising unemployment.

Test: inflation is elevated while output growth is weak or negative and unemployment is rising qualitative Indian Market, Regulation & Taxation

Stamp Duty

A duty levied on the buy side of securities transactions, at rates uniform across India since 2020.

Stamp Duty = Buy-Side Transaction Value x Applicable Rate, which differs by segment % Financial Statements & Accounting

Standalone Financial Statements

Accounts of the parent company alone, with investments in subsidiaries carried at cost rather than consolidated.

Test: subsidiaries appear as a single investment line at cost or fair value, not as line-by-line assets and liabilities qualitative Risk & Portfolio Management

Standard Deviation

A measure of how far a set of returns typically sits from their average.

Standard Deviation = square root of the average of the squared deviations from the mean % Bonds & Fixed Income

State Development Loan

A dated security issued by an Indian state government to fund its own borrowing requirement.

Test: the issuer is a state government, and the security is issued through the Reserve Bank's auction process qualitative Market Psychology & Behavioural Finance

Status Quo Bias

The preference for leaving things as they are, treating inaction as safer than action.

Test: the current arrangement is retained even when an alternative would be chosen if the positions were reversed qualitative Economy, Macro & Market Cycles

Statutory Liquidity Ratio

The proportion of deposits banks must hold in government securities, cash or gold.

Required SLR Holdings = Net Demand and Time Liabilities x Statutory Liquidity Ratio % Indicators & Oscillators

Stochastic Oscillator

An oscillator showing where the current close sits within the high-low range of the last n periods.

%K = (Close - Lowest Low over n) / (Highest High over n - Lowest Low over n) x 100; %D = 3-period moving average of %K % Indicators & Oscillators

Stochastic RSI

The stochastic formula applied to RSI values rather than to price, showing where RSI sits within its own recent range.

StochRSI = (Current RSI - Lowest RSI over n) / (Highest RSI over n - Lowest RSI over n) ratio (x, times) Market Basics & Instruments

Stock Exchange

A regulated marketplace that matches buy and sell orders in listed securities and publishes the resulting prices.

Test: the venue is recognised by the regulator, operates an order-matching system and publishes executed prices qualitative Derivatives, Futures & Options

Stock Futures

A futures contract whose underlying is a single listed company's shares.

Contract Value = Share Price x Lot Size; settlement in India is by physical delivery of the shares ₹ Corporate Actions, Dividends & Governance

Stock Split

A division of each existing share into a larger number of shares with a proportionally lower face value.

New Share Count = Old Count x Split Ratio; Adjusted Price = Old Price / Split Ratio; Face Value divides by the same ratio shares Orders, Execution & Market Structure

Stop-Limit Order

A stop order that, once triggered, enters the book as a limit order at a stated price rather than as a market order.

Test: the order carries both a trigger price and a limit price; the limit governs the worst acceptable fill qualitative Orders, Execution & Market Structure

Stop-Loss Order

A resting instruction that becomes an active order only once the price reaches a stated trigger level, used to cap a loss.

For a long position: trigger below the entry price; for a short position: trigger above it qualitative Derivatives, Futures & Options

Straddle

Buying or writing both a call and a put at the same strike and expiry.

Long Straddle Cost = Call Premium + Put Premium; Break-evens = Strike +/- Total Premium ₹