Super Finance Glossary

Short Straddle
Definition: A straddle involves both purchase and sale. In short straddle one put and one call are sold.

Short Tender
Definition: Practice prohibited by SEC that involves the use of borrowed stock to respond to a tender offer.

Short The Basis
Definition: The purchase of futures as a hedge against a commitment to sell in the cash or spot markets. See Hedging.

Short-Form Registration
Definition: A procedure that allows a firm to condense its registration statement and prospectus by referencing financial data already on file with the SEC.

Short-run Operating Activities
Definition: Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.

Short-sale Rule
Definition: An SEC rule requiring that short sales be made only in a market that is moving upward; this means either on an uptick from the last sale, or showing no downward movement.

Short-short Test
Definition: A repealed IRS restriction, that used to limit profits from short-term trading, which three months, to 30% of gross income. The penalty for exceeding this limit would be the loss of certain tax-free benefits.

Short-term
Definition: Any investments with a maturity of one year or less.

Short-term Bond Fund
Definition: A bond mutual fund holding short to intermediate-term bonds that have maturities of three to five years.

Short-term Capital Gain
Definition: A profit on the sale of a security or mutual fund share that has been held for one year or less. A short-term capital gain is taxed as ordinary income.

Short-term Debt
Definition: Debt obligations, recorded as current liabilities, requiring payment within the year.

Short-term Financial Plan
Definition: A financial plan that covers the coming fiscal year.

Short-term Gain (or Loss)
Definition: A profit or loss realized from the sale of securities held for less than a year that is taxed at normal income tax rates if the net total is positive.

Short-term Interest Rates
Definition: Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates.

Short-term Investment Services
Definition: Services that assist firms in making short-term investments.

Short-term Reserves
Definition: Investments in interest-bearing bank deposits, money market instruments, U.S. Treasury bills, and short-term bonds.

Short-term Solvency Ratios
Definition: Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (1) the current ratio, (2) the acid test ratio, (3) the inventory turnover ratio, and (4) the accounts receivable turnover ratio.

Short-term Tax Exempts
Definition: Short-term securities issued by states, municipalities, and quesi-government entities such as local housing and urban renewal agencies.

Short-term Trend
Definition: Erratic price movements that last less than three weeks.

Shortage Cost
Definition: Costs that fall with increases in the level of investment in current assets.