P&S (Purchase and Sale Statement)
| A statement sent by a commission house to a customer when any part of a futures position is offset, showing the number of contracts involved, the prices at which the contracts were bought or sold, the gross profit or loss, the commission charges, the net profit or loss on the transactions, and the balance.
|
Pacific Clearing Corporation (PCC)
| The clearing corporation of the Pacific Stock Exchange.
|
Pacific Stock Exchange (PSE)
| This exchange operates in San Francisco and Los Angeles.
|
Paper Profit or Loss
| The profit or loss that would be realized if open contracts were liquidated as of a certain time or a certain price.
|
Par
| (1) Refers to the standard delivery point(s) and/or quality of a commodity that is deliverable on a futures contract at contract price. Serves as a benchmark upon which the base discounts or premiums for varying quality and delivery locations. (2) In bond markets, an index (usually 100) representing the face value of a bond.
|
Par Value
| A value that a corporation assigns to its security for bookkeeping purposes.
|
Parity
| A theoretically equal relationship between farm product prices and all other prices. In farm program legislation, parity is defined in such a manner that the purchasing power of a unit of an agricultural commodity is maintained at its level during an earlier historical base period.
|
Participating Preferred
| Preferred stock whose holders may "participate" with the common shareholders in any dividends paid over and above those normally paid to common and preferred stockholders.
|
Pass-Through
| Security in which the periodic interest and principal are passed from a mortgagor to an investor through an intermediary.
|
Pass-Through Security
| Instrument representing an interest in a pool of mortgages. Pass-throughs pay interest and principal on a monthly basis.
|
Path Dependent Option
| An option whose valuation and payoff depends on the realized price path of the underlying asset, such as an Asian option or a Lookback option.
|
Pay/Collect
| A shorthand method of referring to the payment of a loss (pay) and receipt of a gain (collect) by a clearing member to or from a clearing organization that occurs after a futures position has been marked-to-market. See Variation Margin.
|
Payment-in-Kind
| Refers to an alternative to cash payments to producers of various commodities under the U.S. Department of Agriculture acreage control program authorized by Congress in 1985. The payments consisted of generic certificates which could be exchanged for commodities held in government warehouses or redeemed for equivalent monetary value.
|
Pegged Price
| The price at which a commodity has been fixed by agreement.
|
Pegging
| A form of price stabilization; typically used to stabilize a country’s currency by making it fixed to the exchange rate with another country.
|
Penny Stocks
| Extremely low-priced securities that trade over the counter.
|
PEPS (Personal Equity Plans)
| These allow investment in a number of shares and carry various tax benefits, including the receipt of dividends without paying income tax on the income and sales free from capital gains tax on the profit.
|
PERQS
| Performance Equity-Linked Redemption Quarterly Pay Securities, a service mark of Morgan Stanley. PERQs are intermediate equity-linked debt instruments representing either senior or subordinated debt of the issuer. Unlike conventional debt, the maturity date is not fixed, but rather dependent on the price of common stock to which the security is "linked". These debt PERQs are not to be confused with Preferred stock PERQ-Preferred Exchangeable Redemption Cumulative Securities.
|
Phantom Interest
| The yearly accreted interest that a zero-coupon security is presumed to pay each year you hold it even though payment of interest isn’t made until the zero matures.
|
Philadelphia Stock Exchange (PHLX)
| An equities and options exchange located in Philadelphia.
|
PIKs
| Payment-in-kind bonds.
|
PINES
| Public Income Notes, represent general, unsecured, unsubordinated obligations of a company that are sold to the general public in small amounts usually $25, trade on the stock exchanges, pay fixed specified quarterly interest payments, are redeemable at par plus accrued interest at the option of the company after a specified period (generally 5 years), and mature in 30 to 50 years. PINES trade flat on the markets (the price does not include accrued interest in the trading price). PINES rank equally with the company's other unsecured and unsubordinated debt.
|
Pink Sheets
| Daily publication providing dealer names and quotes on penny stocks. It is actually printed on pink paper.
|
Pip (or Points)
| The term used in currency market to represent the smallest incremental move an exchange rate can make. Depending on context, normally one basis point (0.0001 in the case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY).
|
Pit
| A specially constructed arena on the trading floor of some exchanges where trading in a futures contract is conducted. On other exchanges the term "ring" designates the trading area for a commodity. See Ring.
|
Pit Brokers
| See Floor Broker.
|
Plus-Tick Rule
| SEC rule that states that no short sale may be made when the last trade on the security was a minus tick.
|
Point
| A measure of price change equal to 1/100 of one cent in most futures traded in decimal units. In grains, it is of one cent; in T-bonds, it is one percent of par. See Tick.
|
Point Balance
| A statement prepared by futures commission merchants to show profit or loss on all open contracts by computing them to an official closing or settlement price, usually at calendar month end.
|
Point-And-Figure
| A method of charting which uses prices to form patterns of movement without regard to time. It defines a price trend as a continued movement in one direction until a reversal of a predetermined criterion is met.
|
Political Risk
| Changes in a country’s governmental policy, which may have an adverse effect on an investor`s position.
|
Pool
| See Commodity Pool.
|
Pork Bellies
| One of the major cuts of the hog carcass that, when cured, becomes bacon.
|
Portfolio
| The different securities owned in an account of client.
|
Portfolio Insurance
| A trading strategy which attempts to alter the nature of price changes in a portfolio to substantially reduce the likelihood of returns below some predetermined level for an established period of time. This can be achieved by moving assets among stocks, cash and fixed-income securities or, with the advent of stock index futures contracts, by hedging a stock-only portfolio by selling stock index futures in a declining market or purchasing futures in a rising market. The objective is to create an exposure similar to that of a stock portfolio with a protective purchased put option.
|
Position
| An interest in the market, either long or short, in the form of one or more open contracts. Also, "in position" refers to a commodity located where it can readily be moved to another point or delivered on a futures contract. Commodities not so situated are "out of position." Soybeans in Mississippi are out of position for delivery in Chicago, but in position for export shipment from the Gulf.
|
Position Limit
| The maximum position, either net long or net short, in one commodity future (or option) or in all futures (or options) of one commodity combined which may be held or controlled by one person as prescribed by an exchange and/or by the CFTC.
|
Position Limits
| The maximum number of option contracts that may be held on the same side of the market for a particular security. The number may vary depending on the security.
|
Position Trader
| A commodity trader who either buys or sells contracts and holds them for an extended period of time, as distinguished from the day trader, who will normally initiate and offset a futures position within a single trading session.
|
Positioning
| An approach to trading in which the trader either buys or sells contracts and holds them for an extended period of time, as distinguished from Day Trading, in which the trader will normally initiate and offset his position within a single trading session.
|
Positive Carry
| The cost of financing a financial instrument (the short-term rate of interest), where the cost is less than the current return of the financial instrument. See also Carrying Charges and Negative Carry.
|
Posted Price
| An announced or advertised price indicating what a firm will pay for a commodity or the price at which the firm will sell it.
|
Prearranged Trading
| Trading between brokers in accordance with an expressed or implied agreement or understanding, which is a violation of the Commodity Exchange Act and CFTC regulations.
|
Preemptive Right
| A right, sometimes required by the issuer's corporate charter, by which current owners must be given the opportunity to maintain their percentage ownership if additional shares of the same class are issued. Additional shares of the soon-to-be issued security are offered to current owners in proportion to their holders before the issue can be offered to others. Usually one right is issued for each outstanding share. The rights are used to subscribe to the additional shares at a predetermined cash amount.
|
Preference Shares
| These are normally fixed-income shares whose holders have the right to receive dividends before ordinary shareholders but after debenture and loan stockholders have received their interest.
|
Preferred Stock
| Stock that represents ownership in the issuing corporation and that has prior claim on dividends. In the case of bankruptcy, preferred stock has a claim on assets ahead of common stockholders. Preferred stock is junior to the issuing entity's debt obligations but senior to common stock in the payment of dividends and the liquidation of assets. The dividend can be fixed or floating and is usually stated as a percentage of par value. Preferred stock usually has no voting rights and frequently has a mandatory or optional redemption provision. The expected dividend is part of the issue’s description.
|
Premium
| (1) the amount a price would be increased to purchase a better quality commodity; (2) refers to a futures delivery month selling at a higher price than another, as "July is at a premium over May;" (3) cash prices that are above the futures price, such as in foreign exchanges. If the forward rate for Italian lira is at a premium to spot lira, it is selling above the spot price. See Contango, Discount; (4) the money, securities or property the buyer pays to the writer for granting an option contract.
|
Premium Bond
| A note or bond selling at a price above par.
|
Prepayment
| A premature payoff of a loan. Prepayments can be made for the total or partial value of the loan.
|
Price Basing
| A situation where producers, processors, merchants or consumers of a commodity establish commercial transaction prices based on the futures prices for that or a related commodity (e.g., an offer to sell corn at 5 cents over the December futures price). This phenomenon is commonly observed in grain and metal markets.
|
Price Discovery
| The process of determining the price level for a commodity based on supply and demand factors.
|
Price Limits
| The maximum price advance or decline from the previous day's settlement price permitted for a contract in one trading session by the rules of the exchange. See also Variable Limits.
|
Price Manipulation
| Any planned operation, transaction or practice calculated to cause or maintain an artificial price.
|
Price Movement Limit
| See Limit (Up or Down).
|
Price Spread
| A spread in which the two options have the same expiration date but have different exercise or strike price.
|
Price Transparency
| Every market participant has equal access to the description of quotes.
|
Price/Earnings Ratio
| The current share price divided by the last published earnings per share, where earnings per share is net profit divided by the number of ordinary shares.
|
Primary Dealer
| Any of 40 firms recognized by the Treasury Department as eligible to bid on Treasury and agency securities when they are initially issued and to make a market for secondary buyers.
|
Primary Market
| (1) For producers, their major purchaser of commodities; (2) in commercial marketing channels, an important center at which spot commodities are concentrated for shipment to terminal markets; and (3) to processors, the market that is the major supplier of their commodity needs.
|
Prime Rate
| Interest rate charged by major banks to their most credit-worthy customers.
|
Principal
| (1) Sole proprietor, general partner, officer or director, or person occupying a similar status or performing similar functions, having the power to exercise a controlling influence over the activities of the entity. (2) Any holder or beneficial owner of 10 percent or more of the outstanding shares of any class of stock of the entity. (3) Any person who has contributed 10 percent or more of the capital of the entity. (4) Outstanding balance of a loan.
|
Principals' Market
| A market where the ring dealing members act as principals for the transactions they conclude across the ring and with their clients.
|
Private Company
| A company which is not a public company and does not offer its shares to the general public.
|
Private Placement
| An issue that is offered to a single or a few investors as opposed to being publicly offered.
|
Private Wires
| Wires leased by various firms and news agencies for the transmission of information to branch offices and subscriber clients.
|
Privatization
| Conversion of a state run company to public limited company status often accompanied by a sale of its shares to the public.
|
Privileges
| An early form of agricultural options no longer traded.
|
Probate Price
| The price used to assess the value of shares for inheritance tax purposes. Calculated on the "quarter up" principle. That is, instead of taking the Mid Price in the Official List, the difference between the two prices (bid and offer) given under "quotation" is divided by four, and the result added to the lower of the two prices.
|
Program Trading
| The purchase (or sale) of a large number of stocks contained in or comprising a portfolio. Originally called "program" trading when index funds and other institutional investors began to embark on large-scale buying or selling campaigns or "programs" to invest in a manner which replicated a target stock index, the term now also commonly includes computer aided stock market buying or selling programs, portfolio insurance, and index arbitrage.
|
Prompt Date
| The date on which the buyer of an option will buy or sell the underlying commodity (or futures contract) if the option is exercised.
|
Prospectus
| A document that explains the terms of a new security offering — the officers, the outside public accounting firms, the legal opinion, and so on. Must be given to any customer who purchases new corporate and certain muni issues.
|
Proxy
| A form and a process for voting via the mail, permitting stockholders to vote on key corporate issues without having to attend the actual meeting.
|
Proxy Fight
| An attempt by a dissident group to take over the management of a corporation. The group sends proxies electing them to the board; the current management sends proxies favoring them. The shareholders cast their votes by selecting one proxy or the other.
|
Public
| In trade parlance, non-professional speculators as distinguished from hedgers and professional speculators or traders.
|
Public Elevators
| Grain-storage facilities, licensed and regulated by state and federal agencies, in which space is rented out to whomever is willing to pay for it; some are also approved by the commodity exchanges as regular for delivery of commodities against futures contracts.
|
Public Limited Company (PLC)
| A public company limited by shares and having a share capital, and which may offer shares for purchase by the general public. Only PLC’s may qualify for listing or trading on the USM on the London Stock Exchange.
|
Public Market
| The listed exchanges through which zero-coupon investments can be purchased and sold.
|
Public Offering Date
| The first day the new issue is offered to the public, on or shortly after the effective date.
|
Purchase and Sale Statement (P&S)
| A statement sent by a Futures Commission Merchant to a customer when a futures or options position has been liquidated or offset. The statement shows the number of contracts bought or sold, the prices at which the contracts were bought or sold, the gross profit or loss, the commission charges and the net profit or loss on the transaction. Sometimes combined with a Confirmation Statement.
|
Purchase Price
| The amount paid to purchase a Treasury or agency obligation.
|
Put
| An option contract that entitles the holder to sell a futures contract of an underlying common instrument at a stated price (the "striking price")on or before a fixed expiration date.
|
Put Option
| An option that gives the option buyer the right to sell (go "short") the underlying futures contract at the strike price on or before the expiration date.
|
Puts
| Option contracts which give the holder the right but not the obligation to sell a specified quantity of a particular commodity or other interest at a given price (the "strike price") prior to or on a future date. Also called "put option," they will have a higher (lower) value the lower (higher) the current market value of the underlying article is relative to the strike price.
|
Pyramiding
| The use of unrealized profits on existing futures positions as margin to increase the size of the position, normally in successively smaller increments.
|
