What Is a Sunshine Trade? A sunshine trade is a high-volume transaction prematurely revealed to the market via a public announcement before the order is even entered. A sunshine trade will cause a move in the market to occur simply due to the size of the position being taken, but this strategy can help minimize
What Is Superannuation? A superannuation is an Australian pension program created by a company to benefit its employees. Funds deposited in a superannuation account will grow through appreciation and contributions until retirement or withdrawal. The term “super” is more commonly used when referring to pension plans available in Australia. The U.S. equivalents to a superannuation
What is Super Floater? A super floater is a collateralized mortgage obligation (CMO) tranche whose coupon rate is the leveraged reference interest rate, usually LIBOR, minus the fixed rate (spread). Key Takeaways A super floater is a collateralized mortgage obligation (CMO) tranche whose coupon rate is the leveraged reference interest rate, usually LIBOR, minus the
What Is Super-Hedging? Super-hedging is a strategy that hedges positions with a self-financing trading plan. It utilizes the lowest price that can be paid for a hedged portfolio such that its worth will be greater or equal to the initial portfolio at a set future time. Super-hedging requires the investor to create an offsetting replicating
What Is a Supermajority? A supermajority is an amendment to a company’s corporate charter that requires a large majority of shareholders (generally 67% to 90%) to approve important changes like mergers and acquisitions. This is sometimes called a “supermajority amendment.” Often a company’s charter will simply call for a majority (more than 50%) to make these
What is Supernormal Dividend Growth? A supernormal dividend growth rate is a period of time in which the dividends issued on shares of stock are increasing at a higher than normal rate. The high growth rate of payouts are seen as above normal, thus “supernormal.” Because this rate is also expected to be unsustainable, the
What is a Supernormal Growth Stock? A supernormal growth stock is a security that experiences especially robust growth for a time, then eventually reverts back to normal levels of growth. During their supernormal growth stage, these stocks outperform the market significantly and provide investors with returns that are well above average. In order to be considered a supernormal
What Is a Subprime Lender? A subprime lender is a credit provider that specializes in borrowers with low or “subprime” credit ratings. Because these borrowers represent a higher risk of default, subprime loans are associated with relatively high rates of interest. Subprime lending became a topic of considerable interest in the wake of the 2007–2008
What Is a Subprime Loan? A subprime loan is a type of loan offered at a rate above prime to individuals who do not qualify for prime-rate loans. Quite often subprime borrowers have been turned down by traditional lenders because of their low credit ratings or other factors that suggest they have a reasonable chance
What Was the Subprime Meltdown? The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007, contributing to the most severe recession in decades. The housing boom of the mid-2000s—combined with low-interest rates at the time—prompted many lenders to offer home loans to individuals with poor credit. When the
