Education Glossary

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Definitions Starting with "p"

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Term Definition
Par Value

Stated value or face value of a bond.

Parabolic SAR Indicator

Designed by Welles Wilder, this lagging indicator employs a "stop and reverse" strategy through the use of Trailing Stops and identifying a Trend Reversal.

Pattern

Graphic formations of a financial instrument's price movements on a chart.

Pennant

A price chart pattern resembling a pole with a flag (pennant), the pattern identifies a strong trend and is characterized by increasing lower highs and higher lows.

Penny Stock

Any stock share trading below $5 per share.

Pink Sheet

Daily publication by the National Quotation Bureau that lists Over-the-Counter stocks including the Dealers who trade them.

Pip

Unit of price for foreign currency -- refers to digits added or subtracted from the fourth decimal place.

Pivot Point

A technical analysis indicator used to gauge overall market trend. Calculated through an average of the high, low and close for the previous trading day.

Point and Figure

A technical analysis charting technique that plots price movements without time as a parameter. Easily identifiable by vertical columns of Xs and Os. Xs represent rising prices while Os represent falling prices.

Portfolio

The totality of an investor's holdings in stocks, bonds, futures, mutual funds and real estate.

Position Limit

The highest amount of futures or options contracts set by the Exchange,  that any one investor may hold on an underlying security.

Positive Directional Indicator

An attribute of the Average Directional Index (ADX) that quantifies the occurrence of an uptrend.

Preemptive Right

A clause for select shareholders of a corporation that provides the right to maintain percentage ownership of a company through purchasing a proportionate amount of shares of any future shares issuance of the security.

Preferred Stock

A type of stock ownership that provides a fixed dividend and has a higher hierarchy in the payment of dividend over common stockholders.

Premium

The complete cost of an option.

Price Action

The fluctuation in value for a security's price.

Price Weighted Index

A stock index where each stock impacts the value of the index proportionate to it's price per share.

Price/Earnings Ratio

A company valuation tool that measures current share price against per-share earnings. It's a good indicator for investor demand for the company's shares.

Prime Rate

The rate of interest that U.S. banks collect from their best rated customers.

Profit Margin

A corporate evaluative formula that divides Net Income by revenue for a specified period.

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