Education Glossary

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Definitions Starting with "p"

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Term Definition

A type of option contract that provides the holder the right to to sell a specified amount of an underlying asset at a set price within a specific time period.


A prevalent retracement in a trending market before continuing in the same direction.


A designated agent authorized to take legal action on behalf of another party. Often used by shareholders to transfer voting rights to a member of company management to represent the shareholder's interests at a shareholders' meeting.


Legal document that provides details about a securities offering to the general public.

Program Trading

Automated trades representing large blocks of securities executed by institutional traders via a computerized platform.

Profit Warning

Company announcement indicting that actual profits are likely to be lower than forecasted projections.

Profit Margin

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

Prime Rate

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

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.

Price Weighted Index

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

Price Action

The fluctuation in value for a security's price.


The complete cost of an option.

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.

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.

Positive Directional Indicator

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

Position Limit

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


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

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.

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.


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

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