Resources

P/E

Price Earnings Ratio; shows the multiple of earnings at which a stock sells and determined by dividing current stock price by current earnings per share.

PAID-IN CAPITAL

Represents the excess of funds received for stock of a corporation in excess of its book value.

PAR

Equal to the nominal or face value of a security; A bond selling at par is worth an amount equivalent to its original issue value or its value upon redemption at maturity.

PARITY

Equality; the value of one currency in terms of another.

PAYMENT DATE

The date on which a dividend or bond interest payment is scheduled to be delivered.

PAYROLL EMPLOYMENT

Payroll employment is a measure of the number of people being paid as employees by non-farm business establishments and units of government.

PENSION FUND

A fund set up to pay the pension benefits of workers after retirement.

PETRODOLLARS

Foreign exchange reserves of oil producing nations arising from oil sales.

PHYSICAL COMMODITY

A commodity is food, metal, or another fixed physical substance that investors buy or sell.

PIP

The smallest price unit in a currency (0.0001 of a unit).

PIT

A specific area on the trading floor that is designed for the trading of commodity, index, currency or interest rate futures.

PLAZA ACCORD

The 1985 Plaza Hotel agreement by the G5 to lower the dollar.

POINT

Minimum fluctuation or smallest increment of price movement; One percent on an interest rate.

PORTFOLIO

A collection of investments, real and/or financial.

POSITION

The net of the total commitments in a given currency.

POWER OF ATTORNEY

A written authorization allowing a person to perform certain acts on behalf of another, such as moving of assets between accounts or trading for a person's benefit.

PREFERRED SHARES

Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders.

PREMIUM

The amount by which a forward rate exceeds a spot rate; the margin paid above the normal price level.

PRESENT VALUE

The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future.

PRICE EARNINGS RATIO

See P/E above.

PRICE GAP

Gaps occur when opening price movements create a blank spot on the chart. This occurs when the high of the day is below the low of the previous day or when the low of the day is above the high of the previous day.

PRIMARY DEALER

Usually refers to the select list of securities firms that are authorized to deal in new issues of government bonds.

PRODUCER PRICE INDEX

PPI; An inflationary indicator published by the U.S. Bureau of Labor Statistics to evaluate wholesale price levels in the economy.

PROFIT TAKING

The action taken by investors to sell when prices are rising or to purchase when prices are declining in order to secure gains.

PROGRAM TRADING

Trades based on signals from computer programs, usually entered directly from the trader's computer and executed automatically.

PUT OPTION

Gives the right but not the obligation to sell currencies or instruments at the option exercise price within a predetermined time period.