P
A Nasdaq stock symbol specifying that it is the company's first class of preferred shares.
P To P (Peer To Peer) or (Path To Profitability)
P to P can mean one of two things:
1. Peer to peer allows internet users to transfer files directly, rather than through the use of a website or directory. File transfers are done directly from the users' computers.
2. An abbreviation of "path to profitability". This refers to the roadmap a startup company follows in order to propel its operations from its current state of losing money to becoming profitable.
PAB
In currencies, this is the abbreviation for the Panama Balboa.
Pac Man
A form of defense used in a hostile takeover situation. The target firm turns around and tries to take over the company that has made the hostile bid.
Pacific Exchange - PCX
An exchange network that coordinates the trading of stock options between both institutional and individual investors.
Paid In Capital
Capital received from investors in exchange for stock. This is recorded as an entry on the balance sheet.
Paid-Up
The state of a settlement when all payment obligations for a security have been completed in a customer account. When an individual has paid up, he or she has paid for the security in full.
Paid-Up Capital
The total amount of shareholder capital that has been paid in full by shareholders.
Painting the Tape
An illegal action by a group of market manipulators buying and/or selling a security among themselves to create artificial trading activity, which, when reported on the ticker tape, lures in unsuspecting investors as they perceive an unusual volume.
Paired Shares
Stock of two companies under the same management that is sold as one unit and usually appears on one certificate.
Pairing Off
An illegal practice of a brokerage firm offsetting short and long positions between house accounts by collecting cash payments without physically delivering the securities.
Pairoff
A purchase of securities to offset a previously transacted sale of the same security.
Pairs Trade
The strategy of matching a long position with a short position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing on the two stocks the stock you are long in versus the stock you are short in.
Palladium
An element commonly used in jewelry, electronics, and the purification of hydrogen.
Panel Bank
The name given to the group of banks contributing to the EURIBOR. This group is made up of the largest participants within the Euro money market.
Panic Buying
High volume buying brought about by sharp price increases.
Panic Selling
Wide-scale selling of an investment, causing a sharp decline in price. In most instances of panic selling, investors just want to get out of the investment, with little regard for the price at which they sell.
Paper Dealer
A firm that specializes in buying commercial paper from companies and then selling/marketing it to investors.
Paper Profit (Paper Loss)
Unrealized capital gain (or capital loss) in an investment. It is calculated by comparing the market price of a security to the original purchase price. Gains or losses only become realized when the security is sold.
Paper Trade
Simulated trading that investors use to practice mimicking trades (buys and sells) without actually entering into any monetary transactions.
Par
1. The face value of a bond. Generally $1,000 for corporate issues, with higher denominations such as $10,000 for many government issues.
2. A dollar amount assigned to a security when first issued.
Par Value
1) The face value of a bond.
2) A dollar amount that is assigned to a security when representing the value contributed for each share in cash or goods.
Parabolic Indicator
A technical analysis strategy that uses a trailing stop and reverse method called "SAR," or stop-and-reversal, to determine good exit and entry points.
Parallel Loan
A type of foreign exchange loan agreement that was a precursor to currency swaps. A parallel loan involves two parent companies taking loans from their respective national financial institutions and then lending the resulting funds to the other company's subsidiary.
Parent Company
A company that controls other companies by owning an influential amount of voting stock.
Pareto Principle
A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes. Also referred to as the "Pareto rule" or the "80/20 rule".
Pari-passu
Two securities or obligations having equal rights to payment.
Paris Club
A monthly meeting in Paris attended by creditors of 19 countries to discuss debt issues. Among other things, the Paris Club addresses the issue of coordinated debt relief for developing countries that cannot service their debt.
Parity
1. In general, a situation of equality. Parity can occur in many different contexts, but it always means that two things are equal.
2. The official value.
3. In an exchange market, when all brokers bidding for the same security have equal standing due to identical bids.
Parity Bond
Two or more bond issues with equal rights to bond payments.
Parity Price
The term "parity" refers to equality. Thus, parity price is a price for an asset that is directly linked to another price. Examples of parity price are:
1. Convertibles - the price at which a convertible security equals the value of the underlying stock.
2. Options - when an option is trading at its intrinsic value ("trading at parity").
3. International parity - official rates for a currency in terms of other pegged currencies, typically the U.S. dollar.
4. Commodities - a commodity's price dependent on a composite of prices during a period of time, usually the most recent 10-year period.
5. Listed parity - situation when all parties involved are of equal standing and priority.
Parking
A form of kiting shares that a brokerage commits by moving long positions in unrelated accounts to cover short positions that are improperly settled according to SEC regulations.
Parking Violation
The illegal practice of an acquiring company concealing ownership of the target company by holding stock under a related third party before attempting corporate takeover.
Parsonage Allowance
An allowance designated by a church or other organization for its church professionals (clergy) for the expenses of providing and maintaining a home.
Partial Redemption
An investment-transaction classification that refers to the withdrawal of a portion of a security's value by the owner. Rather than withdrawing the entire amount of his or her security's value from the account, an investor may prefer to keep a portion of the value invested in the asset while still obtaining some cash.
Partial Release
A mortgage provision allowing some of the pledged collateral to be released from the mortgage contract if certain conditions are met
Participating Preferred Stock
A type of preferred stock that, under certain conditions, gives holders the right to receive earnings payouts over and above the specified dividend rate.
Participation Rate
A measure of the participating portion of an economy's labor force.
Partnership
A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.
Pass-Through Certificate
Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage Association (Ginnie Mae).
Pass-Through Security
A pool of fixed-income securities backed by a package of assets. A servicing intermediary collects the monthly payments from issuers, and, after deducting a fee, remits or passes them through to the holders of the pass-through security.
Also known as a "pass-through certificate" or "pay-through security."
Passive Activity
An activity from which you have the potential to profit but in which you do not physically participate.
Passive Foreign Investment Company - PFIC
A foreign company whose income is 75% passive or has over 50% of its assets in investments earning interest, dividends, and/or capital gains.
Passive Income
Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.
Passive Investing
An investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long-term appreciation and limited maintenance
Passive Loss
A loss incurred through a rental property, limited partnership, or other enterprise in which the individual is not actively involved.
Passive Management
An investing strategy that mirrors a market index and does not attempt to beat the market.
Also known as "passive strategy" or "passive investing".
Past Due Balance Method
A finance/accounting method that bases costs (and interest) on the amounts owing that are past due.
Patent
A government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time.
Path Dependent Option
An exotic option that is valued according to pre-determined price requirements for its underlying asset or commodity.
Pattern
In technical analysis, the distinctive formation created by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction. Also known as "trading pattern".
People Pill
A defensive strategy to ward off a hostile takeover. Management threatens that, in the event of a takeover, the entire management team will resign.
Pattern Day Trader
An SEC designation for traders who make four or more trades (buys and sells) in a particular security in a single day over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Pay/Collect
An abbreviated reference to the payment or collection of funds (after futures positions have been marked to market) between clearing members and their respective clearing houses.
Payback Period
The length of time required to recover the cost of an investment.
Paydown
A payment made towards an outstanding loan balance.
Paydown Factor
The portion of cash subtracted each month from the principal of a mortgage security divided by the original principal of the security.
Payee
A party who receives payment.
Payer
A person who makes a payment to a payee.
Paying Agent
An agent who accepts payments from the issuer of a security and then distributes the payments to the holders of the security. Also known as a "disbursing agent."
Payment
The transfer of one form of good, service or financial asset in exchange for another form of good, service or financial asset in proportions that have been previously agreed upon by all parties involved. Payment can be made in the form of funds, assets or services.
Payment Date
The date on which a declared stock dividend is scheduled to be paid.
Payment For Order Flow
The compensation and benefit a brokerage receives by directing orders to different parties to be executed. The brokerage firm receives a small payment, usually a penny per share, as compensation for directing the order to the different parties.
Payment in Kind Bonds
A type of bond that pays interest in additional bonds, as opposed to cash payouts.
Payout
The expected financial return from an investment over a given period of time. Payout may be expressed on an overall or periodic basis as either a percentage of the investment's cost or in a real dollar amount. Payout can also refer to the period of time in which an investment or a project is expected to recoup its initial capital investment and become minimally profitable.
Short for "time to payout", "term to payout" or "payout period".
Payout Phase
The phase in an annuity during which payments are made to the annuitant. These are usually paid on a monthly basis and last for the lifetime of the annuitant. The income received from an annuity by a retired investor is considered taxable income.
Payout Ratio
The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings.
Payroll Tax
Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax
Peak
The highest point between the end of an economic expansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall. It is at this point that real GDP spending in an economy is its highest level.
Pearson Coefficient
A type of correlation coefficient that represents the relationship between two variables that are measured on the same interval or ratio scale.
Pegging
1. A method of stabilizing a country's currency by fixing its exchange rate to that of another country.
2. A practice of and investor buying large amounts of an underlying commodity or security close to the expiry date of a derivative held by the investor. This is done to encourage a favorable move in market price.
PEN
In currencies, this is the abbreviation for the Peruvian Nuevo Sol.
Penalty Bid
A bid intended to facilitate a securities offering by stabilizing its price during the distribution period. This bid is typically entered by the managing underwriter on behalf of a syndicate.
Pennant
A continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with converging trendlines, the pennant, followed by a breakout movement in the same direction as the initial large movement, the second half of the flagpole.
As can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend.
Penny Stock
A stock that sells for less than $1 per share but may also rise to as much as $10 per share as a result of heavy promotion. All penny stocks are traded over the count (OTC) or on the pink sheets.
Pension Adjustment - PA
The amount of contributions that can be made to a Registered Retirement Savings Plan (RRSP) on top of any contributions to a Registered Pension Plan (RPP) in a given year.
Pension Benefit Guaranty Corporation - PBGC
A non-profit corporation, functioning under the jurisdiction of the Department of Labor, that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits.
Pension Fund
A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees. The pension fund is a common asset pool meant to generate stable growth over the long term, and provide pensions for employees when they reach the end of their working years and commence retirement.
P
A Nasdaq stock symbol specifying that it is the company's first class of preferred shares.
P To P (Peer To Peer) or (Path To Profitability)
P to P can mean one of two things:
1. Peer to peer allows internet users to transfer files directly, rather than through the use of a website or directory. File transfers are done directly from the users' computers.
2. An abbreviation of "path to profitability". This refers to the roadmap a startup company follows in order to propel its operations from its current state of losing money to becoming profitable.
PAB
In currencies, this is the abbreviation for the Panama Balboa.
Pac Man
A form of defense used in a hostile takeover situation. The target firm turns around and tries to take over the company that has made the hostile bid.
Pacific Exchange - PCX
An exchange network that coordinates the trading of stock options between both institutional and individual investors.
Paid In Capital
Capital received from investors in exchange for stock. This is recorded as an entry on the balance sheet.
Paid-Up
The state of a settlement when all payment obligations for a security have been completed in a customer account. When an individual has paid up, he or she has paid for the security in full.
Paid-Up Capital
The total amount of shareholder capital that has been paid in full by shareholders.
Painting the Tape
An illegal action by a group of market manipulators buying and/or selling a security among themselves to create artificial trading activity, which, when reported on the ticker tape, lures in unsuspecting investors as they perceive an unusual volume.
Paired Shares
Stock of two companies under the same management that is sold as one unit and usually appears on one certificate.
Pairing Off
An illegal practice of a brokerage firm offsetting short and long positions between house accounts by collecting cash payments without physically delivering the securities.
Pairoff
A purchase of securities to offset a previously transacted sale of the same security.
Pairs Trade
The strategy of matching a long position with a short position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing on the two stocks the stock you are long in versus the stock you are short in.
Palladium
An element commonly used in jewelry, electronics, and the purification of hydrogen.
Panel Bank
The name given to the group of banks contributing to the EURIBOR. This group is made up of the largest participants within the Euro money market.
Panic Buying
High volume buying brought about by sharp price increases.
Panic Selling
Wide-scale selling of an investment, causing a sharp decline in price. In most instances of panic selling, investors just want to get out of the investment, with little regard for the price at which they sell.
Paper Dealer
A firm that specializes in buying commercial paper from companies and then selling/marketing it to investors.
Paper Profit (Paper Loss)
Unrealized capital gain (or capital loss) in an investment. It is calculated by comparing the market price of a security to the original purchase price. Gains or losses only become realized when the security is sold.
Paper Trade
Simulated trading that investors use to practice mimicking trades (buys and sells) without actually entering into any monetary transactions.
Par
1. The face value of a bond. Generally $1,000 for corporate issues, with higher denominations such as $10,000 for many government issues.
2. A dollar amount assigned to a security when first issued.
Par Value
1) The face value of a bond.
2) A dollar amount that is assigned to a security when representing the value contributed for each share in cash or goods.
Parabolic Indicator
A technical analysis strategy that uses a trailing stop and reverse method called "SAR," or stop-and-reversal, to determine good exit and entry points.
Parallel Loan
A type of foreign exchange loan agreement that was a precursor to currency swaps. A parallel loan involves two parent companies taking loans from their respective national financial institutions and then lending the resulting funds to the other company's subsidiary.
Parent Company
A company that controls other companies by owning an influential amount of voting stock.
Pareto Principle
A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes. Also referred to as the "Pareto rule" or the "80/20 rule".
Pari-passu
Two securities or obligations having equal rights to payment.
Paris Club
A monthly meeting in Paris attended by creditors of 19 countries to discuss debt issues. Among other things, the Paris Club addresses the issue of coordinated debt relief for developing countries that cannot service their debt.
Parity
1. In general, a situation of equality. Parity can occur in many different contexts, but it always means that two things are equal.
2. The official value.
3. In an exchange market, when all brokers bidding for the same security have equal standing due to identical bids.
Parity Bond
Two or more bond issues with equal rights to bond payments.
Parity Price
The term "parity" refers to equality. Thus, parity price is a price for an asset that is directly linked to another price. Examples of parity price are:
1. Convertibles - the price at which a convertible security equals the value of the underlying stock.
2. Options - when an option is trading at its intrinsic value ("trading at parity").
3. International parity - official rates for a currency in terms of other pegged currencies, typically the U.S. dollar.
4. Commodities - a commodity's price dependent on a composite of prices during a period of time, usually the most recent 10-year period.
5. Listed parity - situation when all parties involved are of equal standing and priority.
Parking
A form of kiting shares that a brokerage commits by moving long positions in unrelated accounts to cover short positions that are improperly settled according to SEC regulations.
Parking Violation
The illegal practice of an acquiring company concealing ownership of the target company by holding stock under a related third party before attempting corporate takeover.
Parsonage Allowance
An allowance designated by a church or other organization for its church professionals (clergy) for the expenses of providing and maintaining a home.
Partial Redemption
An investment-transaction classification that refers to the withdrawal of a portion of a security's value by the owner. Rather than withdrawing the entire amount of his or her security's value from the account, an investor may prefer to keep a portion of the value invested in the asset while still obtaining some cash.
Partial Release
A mortgage provision allowing some of the pledged collateral to be released from the mortgage contract if certain conditions are met
Participating Preferred Stock
A type of preferred stock that, under certain conditions, gives holders the right to receive earnings payouts over and above the specified dividend rate.
Participation Rate
A measure of the participating portion of an economy's labor force.
Partnership
A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.
Pass-Through Certificate
Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage Association (Ginnie Mae).
Pass-Through Security
A pool of fixed-income securities backed by a package of assets. A servicing intermediary collects the monthly payments from issuers, and, after deducting a fee, remits or passes them through to the holders of the pass-through security.
Also known as a "pass-through certificate" or "pay-through security."
Passive Activity
An activity from which you have the potential to profit but in which you do not physically participate.
Passive Foreign Investment Company - PFIC
A foreign company whose income is 75% passive or has over 50% of its assets in investments earning interest, dividends, and/or capital gains.
Passive Income
Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.
Passive Investing
An investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long-term appreciation and limited maintenance
Passive Loss
A loss incurred through a rental property, limited partnership, or other enterprise in which the individual is not actively involved.
Passive Management
An investing strategy that mirrors a market index and does not attempt to beat the market.
Also known as "passive strategy" or "passive investing".
Past Due Balance Method
A finance/accounting method that bases costs (and interest) on the amounts owing that are past due.
Patent
A government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time.
Path Dependent Option
An exotic option that is valued according to pre-determined price requirements for its underlying asset or commodity.
Pattern
In technical analysis, the distinctive formation created by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction. Also known as "trading pattern".
People Pill
A defensive strategy to ward off a hostile takeover. Management threatens that, in the event of a takeover, the entire management team will resign.
Pattern Day Trader
An SEC designation for traders who make four or more trades (buys and sells) in a particular security in a single day over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Pay/Collect
An abbreviated reference to the payment or collection of funds (after futures positions have been marked to market) between clearing members and their respective clearing houses.
Payback Period
The length of time required to recover the cost of an investment.
Paydown
A payment made towards an outstanding loan balance.
Paydown Factor
The portion of cash subtracted each month from the principal of a mortgage security divided by the original principal of the security.
Payee
A party who receives payment.
Payer
A person who makes a payment to a payee.
Paying Agent
An agent who accepts payments from the issuer of a security and then distributes the payments to the holders of the security. Also known as a "disbursing agent."
Payment
The transfer of one form of good, service or financial asset in exchange for another form of good, service or financial asset in proportions that have been previously agreed upon by all parties involved. Payment can be made in the form of funds, assets or services.
Payment Date
The date on which a declared stock dividend is scheduled to be paid.
Payment For Order Flow
The compensation and benefit a brokerage receives by directing orders to different parties to be executed. The brokerage firm receives a small payment, usually a penny per share, as compensation for directing the order to the different parties.
Payment in Kind Bonds
A type of bond that pays interest in additional bonds, as opposed to cash payouts.
Payout
The expected financial return from an investment over a given period of time. Payout may be expressed on an overall or periodic basis as either a percentage of the investment's cost or in a real dollar amount. Payout can also refer to the period of time in which an investment or a project is expected to recoup its initial capital investment and become minimally profitable.
Short for "time to payout", "term to payout" or "payout period".
Payout Phase
The phase in an annuity during which payments are made to the annuitant. These are usually paid on a monthly basis and last for the lifetime of the annuitant. The income received from an annuity by a retired investor is considered taxable income.
Payout Ratio
The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings.
Payroll Tax
Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax
Peak
The highest point between the end of an economic expansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall. It is at this point that real GDP spending in an economy is its highest level.
Pearson Coefficient
A type of correlation coefficient that represents the relationship between two variables that are measured on the same interval or ratio scale.
Pegging
1. A method of stabilizing a country's currency by fixing its exchange rate to that of another country.
2. A practice of and investor buying large amounts of an underlying commodity or security close to the expiry date of a derivative held by the investor. This is done to encourage a favorable move in market price.
PEN
In currencies, this is the abbreviation for the Peruvian Nuevo Sol.
Penalty Bid
A bid intended to facilitate a securities offering by stabilizing its price during the distribution period. This bid is typically entered by the managing underwriter on behalf of a syndicate.
Pennant
A continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with converging trendlines, the pennant, followed by a breakout movement in the same direction as the initial large movement, the second half of the flagpole.
As can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend.
Penny Stock
A stock that sells for less than $1 per share but may also rise to as much as $10 per share as a result of heavy promotion. All penny stocks are traded over the count (OTC) or on the pink sheets.
Pension Adjustment - PA
The amount of contributions that can be made to a Registered Retirement Savings Plan (RRSP) on top of any contributions to a Registered Pension Plan (RPP) in a given year.
Pension Benefit Guaranty Corporation - PBGC
A non-profit corporation, functioning under the jurisdiction of the Department of Labor, that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits.
Pension Fund
A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees. The pension fund is a common asset pool meant to generate stable growth over the long term, and provide pensions for employees when they reach the end of their working years and commence retirement.
Pension Plan
A retirement plan, usually tax exempt, wherein the employer makes contributions for the employee. Many pension plans are being replaced by the 401(k).
Pension Shortfall
A situation in which a company offering employees a defined benefit plan does not have enough money set aside to meet the pension obligations to employees who will be retired in the future.
Per Capita
A Latin term that translates into "by head," basically meaning "average per person."
Per Share Basis
A measure used in the financial world to illustrate the quantity of something for one share of a company's stock. Such measures are used in the analysis and valuation of a company. Examples include 'earnings per share', 'cash per share', 'revenue per share' and 'debt per share'.
Per Stirpes
A stipulation that, should a beneficiary predecease the testator, the beneficiary's share of the inheritance will go to his or her heirs.
Percentage Price Oscillator - PPO
A technical momentum indicator showing the relationship between two moving averages. To calculate the PPO, subtract the 26-day exponential moving average (EMA) from the nine-day EMA, and then divide this difference by the 26-day EMA. The end result is a percentage that tells the trader where the short-term average is relative to the longer-term average.
Perfect Competition
A market structure in which the following five criteria are met:
1. All firms sell an identical product.
2. All firms are price-takers.
3. All firms have a relatively small market share.
4. Buyers know the nature of the product being sold and the prices
charged by each firm.
5. The industry is characterized by freedom of entry and exit.
Sometimes referred to as "pure competition".
Performance Bond
A bond issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract.
Performance Index Paper - PIP
A short-term paper on which the rate is denominated and paid in a base currency. However, the rate movement is based on the exchange rate with an alternate currency.
Performance Shares
In the case of stock compensation, shares of company stock given to managers only if certain company wide performance criteria are met, such as earnings per share targets.
Period Certain
An annuitization-method option with which the annuitant selects a specific time period for which the annuity income payments will last. This is unlike the more commonly selected life option, with which the annuitant receives an income payment for the rest of his or her life, regardless of how long (or short) their retirement years end up lasting.
Permanent Life Insurance
An umbrella term for life insurance plans that do not expire (unlike term life insurance) and combine a death benefit with a savings portion. This savings portion can build a cash value - against which the policy owner can borrow funds, or in some instances, the owner can withdraw the cash value to help meet future goals, such as paying for a child's college education. The two main types of permanent life insurance are whole and universal life insurance policies.
Perp Walk
A slang term describing the police action of parading an arrested suspect in handcuffs before the media.
Perpetual Bond
A bond with no maturity date. Perpetual bonds are not redeemable but pay a steady stream of interest forever. Some of the only notable perpetual bonds in existence are those that were issued by the British Treasury to pay off smaller issues used to finance the Napoleonic Wars (1814). Some in the U.S. believe it would be more efficient for the government to issue perpetual bonds, which may help it avoid the refinancing costs associated with bond issues that have maturity dates.
Perpetual Inventory
An accounting method of maintaining up-to-date property records that accurately reflect the level of goods on hand.
Perpetuity
A constant stream of identical cash flows with no end. The formula for determining the present value of a perpetuity is as follows:
Personal Consumption Expenditures - PCE
A measure of price changes in consumer goods and services. It consists of the actual and imputed expenditures of households and includes data pertaining to durables, non-durables, and services. It is essentially a measure of goods and services targeted towards individuals and consumed by individuals.
Also referred to as "consumption."
Personal Equity Plan - PEP
An investment plan in the U.K. that used to allow people over the age of 18 to invest in shares of U.K. companies. It was done through an approved plan, qualifying unit trust, or investment trust. Investors received both income and capital gains free of tax.
Personal Finance
Financial planning for individuals. Generally, it involves analyzing their current financial position, predicting short-term and long-term needs, and recommending a financial strategy. This may involve advice on pensions, school fees, mortgages, life insurance, and investments.
Personal Income
An individual's total annual gross earnings coming from wages, business enterprises and various investments.
Personal Property
A type of property which, in it's most general definition, can include any asset other than real estate. The distinguishing factor between personal property and real estate is that personal property is movable. That is, the asset is not fixed permanently to one location as with real property such as land or buildings. Examples of personal property include vehicles, furniture, boats, collectibles, etc.
Also known as "movable property", "movables" and "chattels".
Personal Use Property
A type of property that an individual does not use for business purposes or hold as an investment. In other words, property that an individual owns for personal enjoyment.
Petrodollars
The money that oil exporters receive from selling oil and then deposit into Western banks. Petrodollars are also known as petrocurrency.
Petty Cash
The small amount of cash and coins that an organization uses for minor purchases and providing change to customers.
Pfandbriefe
A type of bond issued by German mortgage banks that is collateralized by long-term assets used. These types of bonds represent the largest segment of the German private debt market and are considered to be the safest debt instruments in the private market.
PGK
In currencies, this is the abbreviation for the Papua New Guinea Kina.
Phantom Stock Plan
An employee benefit plan that gives selected employees (senior management) many of the benefits of stock ownership without actually giving them any company stock. Sometimes referred to as "shadow stock."
Philadelphia Federal Index
A regional federal-reserve-bank index measuring changes in business growth. The index is constructed from a survey of participants who voluntarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates factory-sector growth, and when below 0 indicates contraction.
Also known as the "Business Outlook Survey".
Philadelphia Semiconductor Index - SOX
A price-weighted index composed of 18 U.S. semiconductor companies primarily involved in the design, distribution, manufacture, and sale of semiconductors.
Philadelphia Stock Exchange - PHLX
The first securities exchange to be formed in the United States.
Philanthropy
1. An activity performed with the goal of promoting the well-being of fellow man.
2. To dispense or receive aid in the form of a gift from funds intentioned for humanitarian purposes.
Phillips Curve
An economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and inverse relationship.
Phishing
A method of identity theft carried out through the creation of a website that seems to represent a legitimate company. The visitors to the site, thinking they are buying something from a real business, submit their personal information to the site. The criminals then use the personal information for their own purposes, or sell the information to other criminal parties.
PHP
In currencies, this is the abbreviation for the Philippine Peso.
Physical Asset
An item of economic, commercial or exchange value that has a tangible or material existence. For most businesses, physical assets usually refer to cash, equipment, inventory and properties owned by the business. Physical assets are the opposite of intangible assets, which are non-physical assets such as leases, computer programs or agreements.
Physical Delivery
Term in an options or futures contract which requires the actual underlying asset to be delivered upon the specified delivery date, rather than being traded out with offsetting contracts.
Pick-Up Tax
A tax imposed by state authorities based on the estate tax credit the U.S. federal government allows on the federal estate tax return. As this tax is imposed at the state level, the amounts owing vary state to state. And because estates are taxed at the federal level only when the minimum federal estate threshold has been surpassed, state pick-up taxes are not always applied.
Pickup
A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup."
Pig
An investor who is often seen as greedy, having forgotten his or her original investment strategy to focus on securing unrealistic future gains. After experiencing a gain, these investors often have very high expectations about the future prospects of the investment and, therefore, do not sell their position to realize the gain.
Piggy Back Registration
When an underwriter allows existing holdings of a company's shares to be sold in conjunction with an offering of new public shares.
Piggyback Warrants
Additional warrants that are acquired following the exercise of primary warrants.
Pin Risk
A risk that the writer of an options or futures contract faces when the price of the underlying asset closes at or very near the exercise price of the contract upon expiration.
Pink Sheets
A daily publication compiled by the National Quotation Bureau with bid and ask prices of over-the-counter stocks, including the market makers who trade them. Unlike companies on a stock exchange, companies quoted on the pink sheets system do not need to meet minimum requirements or file with the SEC. Pink sheets also refers to OTC trading.
Pinning the Strike
The tendency of a stock's price to close near the strike price of heavily traded options (in the same stock) as the expiration date nears.
Pip
The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100
Pipeline
1) An investment company whose purpose is to collect investment funds from a pool of individual investors and invest them in financial securities.
2) The underwriting procedure which must be completed by the Securities & Exchange Commission (SEC) before a security can be offered for sale to the public.
3) A type of risk most often present in mortgage transactions. It expresses the potential for change in financial factors during the time lapse between the mortgage application and the purchase of the property.
Pipeline Theory
A theory stating that an investment firm passing all capital gains, interest and dividends onto their customers/shareholders shouldn't be levied at the corporate level like most regular companies are.
Also referred to as "conduit theory".
Pit
A specific area of the trading floor that is designated for the trading of an individual futures or options contract.
Pitchbook
A sales book created by an investment bank/firm that details the main attributes of the firm. The pitchbook is used by the firm's sales force to aid it with selling products and issues, and generating new clients.
Pivot
A price level established as being significant either by the market's failure to penetrate it or when a sudden increase in volume accompanies the move through the price level.
Pivot Point
A technical indicator derived by calculating the numerical average of a particular stock's high, low and closing prices.
Pivot Point (or Buy Point)
Optimal buy point of a stock as it emerges from a sound and proper basing area or chart pattern (the most common of which include the 'cup with handle,' 'flat base' and 'double bottom') and breaks out into a new high in price. This is the point of least resistance and has shown, through William J. O'Neil's research, to have the greatest chance of moving substantially higher based on its current and historical price and volume activity.
PKR
In currencies, this is the abbreviation for the Pakistani Rupee.
Placement
The act of marketing new securities to the private or public sector.
Plain Vanilla
The most basic or standard version of a financial instrument, usually options, bonds, futures and swaps. Its opposite is an exotic instrument, which alters the components of a traditional financial instrument, resulting in a more complex security.
Platinum
An element that is sometimes used in jewelry or as a catalyst in electronics.
Pledge Fund
A special type of fund in which members of the fund work toward a specific investment goal by making defined contributions in a pool over a period of time. Many angel investors have started to employ a pledge fund format in venture capital investing.
Pledged Asset
An asset that is transferred to a lender for the purpose of securing debt. The lender of the debt maintains possession of the pledged asset, but does not have ownership unless default occurs.
PLN
In currencies, this is the abbreviation for the Polish Zloty.
Plowback Ratio
A fundamental analysis ratio that measures the amount of earnings retained after dividends have been paid out. This is the opposite of the payout ratio, which measures the amount of dividends that are paid out as a percentage of earnings. Also known as "retention rate", "retention ratio" or the "earnings retention ratio".
Plunge Team
A colloquial reference to a group of economic leaders within the United States whose purpose is to ensure the nation's financial markets are efficient, competitive, and provide confidence for investors.
Plus Tick
A price designation referring to the trading of a security at a price higher than the previous sale price for the same security.
Point & Figure Chart
A chart that plots day-to-day price movements without taking into consideration the passage of time. Point and figure charts are composed of a number of columns that either consist of a series of stacked Xs or Os. A column of Xs is used to illustrate a rising price, while Os represent a falling price. As you can see from the chart below, this type of chart is used to filter out non-significant price movements, and enables the trader to easily determine critical support and resistance levels. Traders will place orders when the price moves beyond identified support/resistance levels
Point Balance
A statement typically produced at the end of the calendar month indicating the profits and losses of a client's open futures contracts.
Point of Purchase - POP
A place where sales are made. On a macro-level, a point of purchase may be a mall, market or city. On a micro-level, retailers consider a point of purchase to be the area surrounding the counter where customers pay. Also known as "point of sale".
Points
1. A 1% change in the face value of a bond or a debenture.
2. In futures contracts, a price change of one one-hundredth, or 1% of one cent.
3. A $1 price change in the value of common stock.
4. In real estate mortgages, the initial fee charged by the lender, with each point being equal to 1% of the amount of the loan. It can also refer to each percentage difference between a mortgage's interest rate and the prime interest rate.
Poison Pill
A strategy used by corporations to discourage a hostile takeover by another company. The target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills:
1. A "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount.
2. The "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger.
Polarized Fractal Efficiency - PFE
A technical indicator developed by Hans Hannula that was invented to determine price efficiency over a user-defined time period. This indicator fluctuates between -100 and +100 with 0 as the center line. Securities with a PFE greater than zero are deemed to be trending up, while a reading of less than zero indicates the trend is down.
Policy Loan
A loan issued by an insurance company that uses the cash value of a person's life insurance policy as collateral. Sometimes referred to as a "life insurance loan."
Political Risk
The financial risk that a country's government will suddenly change its policies.
Also known as "geopolitical risk".
Ponzi Scheme
A fraudulent investing scam that promises high rates of return at little risk to investors. The scheme generates return by acquiring new investors
Pooled Income Fund
A type of mutual fund comprised of gifts that are pooled and invested together. Income from the fund is distributed to both the fund's participants and named beneficiaries according to their share of the fund. If you are a donor to the fund, you and the other income recipients you choose receive quarterly payments for life, and upon your death the value of the assets will be transferred to the beneficiaries.
Pooling of Interests
An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together.
Poop
A slang term often used to describe people with insider information.
Poop And Scoop
A highly illegal practice occurring mainly on the Internet. A small group of informed people attempt to push down a stock by spreading false information and rumors. If they are successful, they can purchase the stock at bargain prices.
Pop-Up Option
A joint and survivor option that allows you to be reinstated to the basic pension amount if the spouse predeceases the retiree. More and more companies are utilizing this option for an additional charge.
Pork Bellies
The commodities underlying the majority of futures contracts trading pork livestock.
Pork Chop
An arrangement on the floor of the NYSE whereby clerks cover the booth of a floor broker and accept orders, phone calls, and associated tasks.
Portable Alpha
The strategy of portfolio managers separating alpha from beta by investing in securities that differ from the market index from which their beta is derived. Alpha is the return achieved over and above the return that results from the correlation between the portfolio and the market (beta). In simple terms, this is a strategy that involves investing in areas that have little to no correlation with the market.
Porter's 5 Forces
Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths.
1. Competition in the industry
2. Potential of new entrants into industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
Portfolio
The group of assets - such as stocks, bonds and mutuals - held by an investor.
Portfolio Income
Income from investments, including dividends, interest, royalties, and capital gains.
Portfolio Insurance
1. A method of hedging a portfolio of stocks against the market risk by short selling stock index futures.
2. Brokerage insurance such as the Securities Investor Protection Corporation (SIPC).
Portfolio Management
The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk vs. performance.
Portfolio Manager
The person responsible for investing a mutual fund's assets, implementing its investment strategy, and managing the day-to-day portfolio trading.
Portfolio Pumping
The illegal act of bidding up the value of a fund's holdings right before the end of a quarter, when the fund's performance is measured. This is done by placing a large number of orders on existing holdings, which drives up the value of the fund.
Also known as "marking the close".
Portfolio Runoff
A decrease in the value and size of portfolios investing in mortgages and mortgage-backed securities.
Portfolio Turnover
A measurement of how frequently assets within a fund are bought and sold by the managers. It is calculated by taking either the total amount of new securities purchased or the amount of securities sold - whichever is less - over a particular period, divided by the total net asset value (NAV) of the fund. The measurement is usually reported for a 12-month time period.
Position
The amount of a security either owned (which constitutes a long position) or borrowed (which constitutes a short position) by an individual or by a dealer. In other words, it's a trade an investor currently holds open.
Position Limit
A predetermined position level set by regulatory bodies for a specific contract or option.
Position Sizing
The dollar value being invested into a particular security by an investor. An investor's account size and risk tolerance should be taken into account when determining appropriate position sizing.
Position Trader
A commodities trader who holds a long position for the long term.
Positive Butterfly
A non-parallel yield curve shift in which short- and long-term rates shift upward by a greater magnitude than medium term rates. This yield curve shift effectively humps the curve, adding to its curvature.
Positive Carry
A strategy of holding two offsetting positions, one of which creates an incoming cashflow that is greater than the obligations of the other
Positive Volume Index - PVI
An index that focuses on days where the volume has significantly increased from the previous day's trading.
Post-Analysis
Vital process of evaluating your successes and mistakes in the stock market by posting all previous buys and sells on charts for a specified timeframe and separating out those that made money from those that were losses. Allows investors a way to improve their future performance by realistically learning from past decisions
Post-Money Valuation
The value of a company after external financing alternatives are added to its balance sheet.
Pot
The portion of a stock or bond issue that investment bankers return to the underwriter so the portion can be sold to institutional investors.
Pot Is Clean
A slang phrase referring to a situation in which an underwriter has successfully sold to investors all of its available issues of a public offering of securities. Also known in more formal terms as "fully subscribed".
Pour-Over Will
A will established by an individual who has already taken the necessary steps to set up a trust, so that upon the death of the individual, all of his or her assets are to be transferred - or "poured over" - to the trust. By doing so, the individual ensures that his or her estate has an explicit direction to shift assets into the trust.
Power Of Attorney
A legal document giving one person (called an "agent" or "attorney-in-fact") the power to act for another person (the principal). The agent can have broad legal authority or limited authority to make legal decisions about the principal's property and finance. The power of attorney is frequently used in the event of a principal's illness or disability, or when the principal can't be present to sign necessary legal documents for financial transactions.
Power of Attorney of Property
A legal document transferring the legal right to the attorney or agent to manage and access the principal's property in the event the principal is unable to do so themselves.
Power Ratio
Measures a media company's revenue performance in comparison to the audience share it controls. You need to know three numbers in order to make this calculation work:
1. Total market revenue
2. The company's revenue
3. The audience share
Pre-arranged Trading
Trading that occurs between brokers through an expressed or implied agreement or understanding.
Pre-Emptive Right
The right of a company's existing common shareholders to have the first chance to purchase shares in a company's future stock issue.
Pre-Market
Trading done before the regular market opens
Pre-Money Valuation
A slang phrased that refers to the value of a company's stock before it goes public. The term is often used by venture capitalists.
Also known as "pre-money".
Pre-Settlement Risk
The risk that one party of a contract will fail to meet the terms of the contract and default before the contract's settlement date, prematurely ending the contract.
This type of risk can lead to replacement-cost risk.
Pre-Syndicate Bid
A bid entered by a syndicate manager or underwriter in the Nasdaq system to stabilize the price of a Nasdaq security prior to the effective date of a registered secondary offering. The term "penalty bid" is also used.
Precious Metals
Valuable metals such as gold, iridium, palladium, platinum and silver.
Predatory Dumping
A type of anti-competitive event in which foreign companies or governments price their products below market values in an attempt to drive out domestic competition. This may lead to conditions where one company has a monopoly in a certain product or industry. Antitrust or competition laws forbid predatory dumping in many countries such as the U.S. and the European Union.
Also referred to as "predatory pricing".
Preferred Dividend Coverage Ratio
A coverage ratio that measures a company's ability to pay off its required preferred dividend payments. A healthy company will have a high coverage ratio, indicating that it has little difficulty in paying off its preferred dividend requirements.
Preferred Equity Redemption Stock - PERC
Preferred stock with special provisions limiting the value of its convertible shares and the mandatory redemption value at maturity.
Preferred Redeemable Increased Dividend Equity Security - PRIDES
First introduced by Merrill Lynch, PRIDES are synthetic securities consisting of a forward contract to purchase the issuer's underlying security and an interest bearing deposit. Interest payments are made at regular intervals, and conversion into the underlying security is mandatory at maturity.
Preferred Stock
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as "preferred shares".
Preliminary Prospectus
A first draft registration statement filed by a firm prior to proceeding with an initial public offering of securities. The document, filed with the Securities & Exchange Commission, is intended to provide pertinent information to prospective shareholders about the company's business description, management, strategic initiatives, financial statements and ownership structure
Premium
1. The total cost of an option.
2. The difference between the higher price paid for a fixed-income security and the security's face amount at issue.
3. The specified amount of payment required periodically by an insurer to provide coverage under a given insurance plan for a defined period of time. The premium is paid by the insured party to the insurer, and primarily compensates the insurer for bearing the risk of a payout should the insurance agreement's coverage be required.
Premium Bond
A bond that is priced higher than its par value
Premium Put Convertible
A convertible bond with an additional put feature that allows it to be redeemed at a premium sometime during its life.
Prenuptial Agreement
A type of contract created by two people before entering into marriage. This contract could outline each party's responsibilities and property rights for the duration of the marriage. More commonly, prenuptial agreements outline terms and conditions associated with dividing up financial assets and responsibilities if the marriage dissolves.
Prepackaged Bankruptcy
When acompany prepares a reorganization plan that is negotiated and voted on by creditors and shareholders before the company actually files for bankruptcy.
Prepaid Expense
An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future.
Prepaid Interest
The interest that a debtor pays before the first scheduled debt repayment. For taxation purposes, most kinds of prepaid interest are expensed over the life of the loan.
For mortgage loans, prepaid interest can also be the interim interest that accrues from the settlement day to the beginning of the first mortgage period.
Prepayment
1. The payment of a debt obligation prior to its due date.
2. The excess payment over a scheduled debt repayment amount.
Prepayment Risk
The uncertainty related to unscheduled prepayment in excess of scheduled principal repayment.
Prepetition Liability
A term that refers to liabilities that arise prior to a company filing of bankruptcy. A company has to petition for bankruptcy protection once this is done, liabilities fall into two categories: prepetition, or those that arise prior to petition, and post-petition, those that arise after petition. These two types of liabilities are often shown on the balance sheets of companies in bankruptcy protection
Present Situation Index
A subindex that measures overall consumer sentiments toward the present economic situation and is used to derive (about 40% of) the Consumer Confidence Index, a widely used economic indicator. The sub-index is compiled from data gathered from a survey of 5,000 households on questions regarding current business and employment conditions. Also known as "Current Situation Index".
Present Value - PV
The amount that a future sum of money is worth today given a specified rate of return.
Preservation Of Capital
An investment strategy whose primary goal is to prevent the loss of an investment's total value
Presidential Election Cycle (Theory)
A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a new U.S. president, and then after the first year, the market improves until the next presidential election.
Press Release
If it's an earnings press release, the release will discuss the financial results of the company for the recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist you in your research, such as the company's web address.
Press Release
If it's an earnings press release, the release will discuss the financial results of the company for the recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist you in your research, such as the company's web address.
Price
The amount of money a security most recently traded for.
Price and Volume Chart
Daily, weekly or monthly basis graphs that show a stock's price and volume history. Used by most professional investors today to assist in the timing and selection of stocks.
Price Bars
Blue or pink colored marks that represent price history (high/low/close). The amount of trading history each bar represents is based on the period of a chart (i.e., weekly, daily, intraday). The length of each vertical bar illustrates a stock's high/low price range. The small intersecting horizontal slash indicates the current price or where a stock closed at the end of official market hours.
A Price Bar will be presented in blue if the price of the most recent trade is equal to or greater than the previous period's last price, or it may be pink if it is less than the previous period’s price.
Price bars, like price quotes, are updated throughout market hours on a 20-minute delayed basis for all stocks listed on NASDAQ, NYSE and AMEX exchanges. This update schedule will often result in the length, location of the horizontal slash, and coloring of a Price Bar to change during market hours.
Price Basing
A method of pricing commercial commodity transactions that bases these prices on related futures contract prices. This method is used by commodity producers, processors, merchants and consumers.
Price By Volume Chart - PBV
A horizontal histogram plotted on the chart of a security, which corresponds to the volume of shares traded at a specific price level. Price by volume histograms are found on the Y-axis and are used by technical traders to predict areas of support and resistance.
Price Change
The difference between the latest price and its previous closing price. Price Change presented in blue font is an indication the price is equal to or greater than its previous close. A pink font color represents a current price that is below the previous close. When viewing a daily or intraday chart, the difference in price is a reference to the prior day's closing price.
For a weekly chart, font coloring reflects the relationship between the current price and the price recorded at the previous week’s close.
For Daily Graphs Online subscribers with monthly charts, font coloring reflects the relationship between the current price and the price recorded at the previous month's close.
Price information is presented on a 20-minute delayed basis for all stocks listed on the NASDAQ, NYSE and AMEX exchanges. Prices for all other stocks are updated after the market close. Price information does not reflect after-hours trading. All prices, including those stocks trading on Canadian exchanges, are reported in U.S. dollars.
Price Discovery
A method of determining the price for a specific commodity or security through basic supply and demand factors related to the market.
Price Elasticity Of Demand
A measure of the responsiveness of the quantity demanded of a good to a change in its price. It is calculated as:
Price Fixing
Establishing the price of a product or service, rather than allowing it to be determined naturally through free market forces. This procedure is often an illegal practice.
Price Improvement
Attaining a higher bid price, if you are selling a stock, or a lower ask price, if you are buying a stock, than the price quoted at the time your order was placed.
Price Line, 200-Day Moving Average
Presented as a black line, it represents the average price over the previous two-hundred trading sessions. It is calculated by summing the closing price over the last 200 trading sessions and dividing by 200. On a Weekly Chart, it is calculated by summing the closing price over the last 40 week trading sessions and dividing by 40.
Price Line, 50-Day Moving Average
Presented as a red line, it represents the average price over the previous fifty trading sessions. It is calculated by summing the closing price over the last 50 trading sessions and dividing by 50. On a Weekly Chart, it is calculated by summing the closing price over the last 10 week trading sessions and dividing by 10.
Price Maker
A monopoly or a firm within monopolistic competition that has the power to influence the price it charges as the good it produces does not have perfect substitutes.
Price Multiple
Any ratio that uses the share price of a company in conjunction with some specific per-share financial metric in order to evaluate a company's financial situation. The share price is typically divided by a chosen per-share metric to form a ratio.
Price Peak/Valley Points
Displays high and low points on Daily. High and Low Price points are measured over a 19-period interval. For example, on a Daily graph, a High Price point is marked on the date where there has been no higher price the 9 days prior to that date and the 9 days following that date.
Price Range, 52-Week High/Low
Indicates the highest and lowest price the stock has reached in the last 52 weeks of trading. Price range data includes intra-day highs and lows.
Price Range, Calendar Year High/Low
Calendar year high/low prices for an equity. Historical prices are adjusted for dividends and splits.
Price Rate Of Change - ROC
A technical indicator that measures the percentage change between the most recent price and the price "n" periods in the past. It is calculated by using the following formula:
(Closing Price Today - Closing Price "n" Periods Ago) / Closing Price "n" Periods Ago
ROC is classed as a price momentum indicator or a velocity indicator because it measures the rate of change or the strength of momentum of change.
Price Relative to Book Value
Calculated by dividing the current stock price by the per share book value (total shareholders' equity for fiscal year-end divided by common shares outstanding).
Price Risk
The risk that the value of a security or portfolio of securities will decline in the future.
Price Scale
Numeric scaling on a chart grid used to visually determine the value of a Price Line or Price Bar. The numeric interval is based on arithmetic scaling for daily and intraday charts, and logarithmic scaling for weekly charts.
Price Skimming
A product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
Therefore, the skimming strategy gets its name from skimming successive layers of "cream," or customer segments, as prices are lowered over time.
Price Swap Derivative
An obligation made by one company to secure the declining value of another company's assets through the commitment of shares.
Price Target
1. A projected price level as stated by an investment analyst or advisor.
2. A price that, if achieved, would result in a trader recognizing the best possible outcome for his or her investment. This is the price at which the trader would like to exit his or her existing position so that he or she can realize the most reward.
Price Tension
The phenomenon by which the seller of a particular good, service, or security desires to maximize the selling price, while the buyer desires to minimize the purchasing price. Generally speaking, the greater the price tension within a particular market, the greater the bid-ask spread.
Price Transparency
The accessibility of information on the order flow for a particular stock, allowing knowledge of the quantities of stock being offered and the bids at the various price levels. Also referred to as "market depth".
Price Value of a Basis Point - PVBP
A measure used to describe how a basis point change in yield affects the price of a bond
Price, % Off 52-Week High
The percentage a stock's current price is below its 52-week high price
Price, Current/Close
The dollar value at which a stock most recently traded or closed. Price information is presented on a 20-minute delayed basis for all stocks listed on the NASDAQ, NYSE and AMEX exchanges. Prices for all other stocks are updated after the market close. Price information does not reflect after-hours trading.
A price quote presented in blue font is an indication the price is equal to or greater than its previous close. A pink font color represents a current price that is below the previous close. When viewing a daily or intraday chart, the change reference is to the prior day's trading session. For a weekly chart, font coloring reflects the relationship between the current price and the price the previous week’s close.
All prices, including those stocks trading on Canadian exchanges, are reported in U.S. dollars.
Price, Percentage Off High
The percentage difference of a stock's latest price to its 52-week high(includes intra-day prices). This figure is updated throughout the trading session on a 20-minute delayed basis for all stocks listed on the NASDAQ, NYSE and AMEX exchanges. This data item is updated for all other stocks after the market close.
Price-Based Option
A derivative financial instrument in which the underlying asset is a debt security. Typically, these options give their holders the right to purchase or sell an underlying debt security (usually a bond) or to receive cash payment based on the current value of the underlying debt security
Price-Earnings Ratio - P/E Ratio
A valuation ratio of a company's current share price compared to its per-share earnings.
For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95).
EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and the estimates of the next two quarters.
Also sometimes known as "price multiple".
Price-Earnings Relative
A price-earnings ratio of a stock divided by the price-earnings ratio of a market measure, or index, such as the S&P 500 or Wilshire 5000.
Price-Taker
1. An investor whose buying or selling transactions are assumed to have no effect on the market.
2. A firm that can alter its rate of production and sales without significantly affecting the market price of its product.
Price-to-Book Value
Compares a stock's value in the market (determined by the current stock price) to the value of total company assets less total company liabilities (book value). Based on the '45-Year Study of the Greatest Stock Market Winners', this measurement did not prove to be significant among winning stocks.
Price-to-Earnings Growth Ratio (PEG)
Calculated by dividing a stock’s forward P-E ratio by its projected three-to-five year annual earnings growth. Value investors use this ratio to uncover “undervalued” companies, or companies trading at a discount to their projected growth. Generally speaking, the higher the PEG, the more “expensive” the stock.
Price-To-Innovation-Adjusted Earnings
A variation of the price-to-earnings ratio (P/E ratio) that takes a company's level of spending on research and development (R&D) into account. It is calculated by adding any expenditure on R&D back to earnings and then calculating the P/E ratio for that company.
Price-To-Research Ratio
A measure of the relationship between a company's market capitalization and research and development (R&D) expenses.
Price-To-Sales Ratio - Price/Sales
A ratio for valuing a stock relative to its own past performance, other companies or the market itself. Price to sales is calculated by dividing a stock's current price by its revenue per share for the trailing 12 months:
The ratio can also be referred to as a stock's "PSR".
Price/Earnings (P/E) Ratio
Theoretically measures the value of a stock by dividing the current price by its earnings per share over the last twelve months.
When a stock's P/E ratio is high, it is considered by the majority of investors as pricey or overvalued. Stocks with low P/Es are typically considered a good value. However, through his studies of the biggest stock market winners, William J. O'Neil found the opposite to be true: the higher the P/E, the better the stock. The average P/E of the best winners over the last fifteen years at the initial buy point prior to their huge price increases was 31 times earnings. These P/Es went on to expand more than 100% to over 70 times earnings as the stocks significantly increased in price.
Price/Earnings (P/E) Ratio, Current and Relative to S&P500
Current price-to-earning ratio and its relation to the P/E ratio of the stocks making up the S&P500 index. The P/E ratio is computed daily using the most recent closing price and the latest trailing 12 months of earnings. Stocks with a P/E ratio of 300 or greater are considered statistical outliers and are excluded from this calculation. A measure of "1.5xSP" means the stock's P/E ratio is 50% above the P/E ratio of the S&P 500 index.
For companies reporting Funds From Operations, this figure is presented as "P/F". Relative value with the P/E of S&P500 index is not presented as fund from operations results is not directly comparable to earnings per share data.
Price/Earnings (P/E) Ratio, Quarterly High/Low Range
Calculated by dividing the company's highest and lowest prices for the quarter by the latest trailing 12-months of earnings. Companies that report Funds From Operations will present this data as "P/F" instead of "P/E".
Price/Earnings To Growth - PEG Ratio
A ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows
Price/Growth Flow
A measure formulated to identify companies that are producing solid earnings and investing a large amount in research and development (R&D). This measure is calculated as the following:
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