| P | Fifth letter of Nasdaq stock symbol specifying issue is the company's first class of preferred shares. |
| P & I | Stands for principal and interest on bonds or mortgage-backed securities. |
| P&L | Profit and loss statement for a trader. |
| P&S | Purchase and sale statement. A statement provided by the broker showing change in the customer's netledger balance after the offset of any previously established positions. |
| P/B | See: Price to book ratio |
| P/E | See: Price/earnings ratio |
| P/E effect | That portfolios with low P/Estocks exhibit higher averagerisk-adjusted returns than those with high P/E stocks. Related: Value manager. |
| P/E ratio | Current stock price divided by trailing annualearnings per shareor expected annual earnings per share. Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25.50 = 10 times $2.55. XYZ stock sells for ten times earnings. |
| P/S | See: Price to sales |
| P2P | Business slang, usually used in reference to startups or internet startup,refers to "path to profitability.". |
| PA | The two-character ISO 3166 country Code for PANAMA. |
| PAB | The ISO 4217 currency code for the Panama Balboa. |
| PAC | See: Planned amortization class |
| PAC | See: Preauthorized checks |
| PAC Bond | Stands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. |
| Pacific Stock Exchange | Used for listed equity securities. Regional exchange located in Los Angeles and San Francisco; only U.S. exchange open between 4:00 and 4:30. |
| Package mortgage | A mortgage on a house and property in the house. |
| Pac-Man strategy | Takeover defense strategy in which the prospective acquiree retaliates against the acquirer'stender offer by launching its own tender offer for the other firm. |
| PAD | See: Preauthorized electronic debits |
| Paid in surplus | See: Paid-in capital |
| Paid up | When all payments that are due have been made. |
| Paid-in capital | Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. It would also include surplus resulting from recapitalization. |
| Paid-up policy | A life insurance policy in which all premiums that are due have been paid. |
| Painting the tape | Illegal practice by traders who manipulate the market by buying and selling a security to create the illusion of high trading activity and to attract other traders who may push up the price. |
| Paired off | Used for listed equity securities. Matched buy and sell market orders, usually pertaining to the pre-opening market picture in a stock, or MOC orders (especially relating to futures/optionsexpirations). |
| Paired shares | Stock of two companies under the same management that are sold as one unit with one certificate. |
| Pairoff | A buyback to offset and effectively liquidate a prior sale of securities. |
| Panic buying or selling | Rapid trading of stocks or bonds in high volume in anticipation of sharply rising or falling prices, usually after unexpected news is released. |
| Paper | Money marketinstruments, commercial paper, and other. |
| Paper dealer | A brokerage firm that buys and sells commercial paper to make a profit. |
| Paper gain (loss) | Unrealized capital gain (loss) on securities held in a portfolio based on a comparison of current market price to original cost. |
| 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-typically $1000/bond. See: Discount, premium. |
| Par bond | A bondtrading at its face value. |
| Par value | Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date. |
| Par value of currency | The official exchange rate between two countries' currencies. |
| Parallel bonds | Fixed income instrumentsdenominated in the respective currencies of the countries where they are placed. |
| Parallel loan | A process whereby two companies in different countries borrow each other's currency for a specific period of time, and repay the other's currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans. |
| Parallel shift in the yield curve | A shift in economic conditions in which the change in the interest rate on all maturities is the same number of basis points. In other words, if the three month T-bill increases 100 basis points (one %), then the 6-month, 1-year, 5-year, 10-year, 20-year, and 30-year rates all increase by 100 basis points as well. Related: Non-parallel shift in the yield curve. |
| Parameter | A model is a combination of variables, such as GDP growth, and coefficients which multiply these variables. The coefficients are often estimated from the data. The coefficients are called parameters. |
| Parent company | A company that controlssubsidiaries through its ownership of voting stock, as well as runs its own business. |
| Pari passu | Refers to the equal ranking of securities. |
| Paris Bourse | National stock market of France. |
| Paris Interbank Offer Rate (PIBOR) | The deposit rate on interbanktransactions in the Eurocurrency market quoted in Paris. |
| Parity | For convertibles, level at which a convertible security'smarket price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered only as an equityinstrument (Conversion ratio times common price). See: Conversion value. For international parity, U.S.$ price of a foreign stock's last sale in an overseas market (Local currency stock price times forex rate times ADR ratio). For listed parity, condition whereby no party has floorpriority, and matching thus occurs. For options parity, dollar amount by which an option is in the money. See: Intrinsic value. |
| Parity value | Related: Conversion value |
| Parking | Putting money into safe investments such as money market investments while deciding where to invest the money. |
| Parking violation | Often used in risk arbitrage. Illegal holding of stock by a third party, or the financing of such a stock, in which the third party's sole reason for holding the stock is to conceal ownership or control of a raider, thus sidestepping the Williams Act requirements of 5% holding limits. See: Rule 13d. |
| Parol contract | A contract that is oral rather than written. Contracts for the disposition of land must be written. |
| Part B prospectus | See: Statement of Additional Information |
| Partial | Used in the context of general equities. Trade whose size is only part of the total customer indication/order, usually made to avoid a compromise in price and also to get some business instead of losing the customers inquiry/order to a competitor. |
| Partial compensation | Incomplete payment for the delivery of goods to one party by buying back a certain amount of product from the same party. |
| Partial Vote | When only a portion of the total shares in an account is voted. For example, a broker has 1,000 shares and sends out a card to each of four shareholder clients. If only three of the four client cards are returned to the broker, the broker will submit only 3/4ths(750 shares) of the total 1,000 shares to vote. If the fourth card arrives later, an additional vote can be counted. |
| Participant | A party of a funding. It usually refers to the lowest rank or smallest level of funding. |
| Participant risk | The risk associated with the credit of the participants and possibility of non-performance. |
| Participating buyer/seller | Used for listed equity securities. (1) Customer willing to buy/sell in line with market. (2) Buyer/seller who goes along with another buyer/seller in a percentage order. |
| Participating convertible preferred stock | Preferred stock that can be converted into common stock at the option of the holder. In contrast, to the usual preferred stock, the value of the preferred stock is refunded to the holder. That is, one gets conversion plus the value of the stock. |
| Participating dividend | Dividend received from ownership of participating preferred stock. |
| Participating fees | The portion of total fees in a syndicatedcredit that go to the participating banks. |
| Participating GIC | A guaranteed investment contract whose policyholder is not guaranteed a crediting rate, but instead receives a return based on the actual experience of the portfolio managed by the life insurance company. |
| Participating life insurance policies | Life insurance that pays dividends to policyholders depending on the company's success as provided by few claims and profitableunderwritings and investments. |
| Participating preferred stock | Preferred stock that provides the holder with a specified dividend plus the right to additional earnings under specified conditions. |
| Participation | The amount of loan or bondissue taken directly from another direct lender or underwriter. |
| Participation agreement | An agreement between lenders about the sharing of the benefits of a loan to a borrower and the sharing of the risks of non-payment. Often a loan will be made by a lender and subsequently sub-participated, without the knowledge of the borrower. |
| Participation certificates (PC) | Used in the context of general equities. Investments representing an interest in a pool of funds or in other instruments, such as foreign securities, that allow participation in the rise or fall of a security or group of securities. |
| Participation loan | A large loan made by a group of lenders, that enables a borrower to obtain financing above the legal lending limit of an individual lender. |
| Partner | Business associate who shares equity in a firm. |
| Partnership | Shared ownership among two or more individuals, some of whom may, but do not necessarily, have limited liability with respect to obligations of the group. See: General partnership, limited partnership, and master limited partnership. |
| Partnership agreement | A written agreement among partners detailing the terms and conditions of participation in a business ownership arrangement. |
| Party in interest | An ERISA-specified individual—such as an administrator, officer, fiduciary, trustee, custodian, or counsel—who is prohibited from making certain transactions involving a retirement plan. A trustee, for example, would be prohibited from using an IRA as collateral for a loan. |
| Pass the book | The process of transferring responsibility for a brokerage firm's trading account from one office to another around the world in order to benefit from trading 24 hours a day. |
| Passing rent | The rent currently payable under the terms of the lease. |
| Passive | Income or loss from business activities in which a person does not materially participate, such as a limited partnership. |
| Passive Activity Loss (PAL) | A loss incurred in participating in passiveinvesting. |
| Passive bond | A bond without any interestyield. |
| Passive income | Income (such as investment income) that does not come from active participation in a business. Specified by the U.S. tax code. |
| Passive Income Generator (PIG) | An investment that favors passive income, such as an income-oriented real estatelimited partnership. |
| Passive investing | Putting money into a profitable business opportunity that is deemed passive by the IRS and thus benefits from tax deductions. |
| Passive investment management | Buying a well diversifiedportfolio to represent a broad-based marketindex without attempting to search out mispriced securities. |
| Passive investment strategy | See: Passive investment management. |
| Passive management | See: Indexing |
| Passive portfolio | A market indexportfolio. |
| Passive portfolio strategy | A strategy that involves minimal expectational input, and instead relies on diversification to match the performance of some marketindex. A passive strategy assumes that the marketplace will reflect all available information in the price paid for securities, and therefore, does not attempt to find mispriced securities. Related: Active portfolio strategy. |
| Pass-through coupon rate | The interest rate paid on a securitizedpool of assets, which is less than the rate paid on the underlyingloans by an amount equal to the servicing and guaranteeing fees. |
| Pass-through rate | The netinterest rate passed through to investors after deducting servicing, management, and guarantee fees from the gross mortgagecoupon. |
| Pass-through securities | A pool of fixed income securities backed by a package of assets (i.e., mortgages) where the holder receives the principal and interest payments. Related: Mortgage pass-through security |
| Patent | The exclusive right to use documented intellectual property in producing or selling a particular product or using a process for a designated period of time. |
| Patent defects | Defects in the construction of a building that are apparent on inspection. Contrast with latent defects. |
| Path-dependent option | An option whose value depends on the sequence of prices of the underlying asset rather than just the final price of the asset. |
| Pattern | A technical chart formation used to make market predictions by following the price movements of securities. |
| Payable date | The date when dividends or capital gains are paid to shareholders or reinvested in additional shares. |
| Payable through drafts | A method of making payment that is used to maintain control over payments made on behalf of the firm by personnel in noncentral locations. The payer's bank delivers the payable through draft to the payer, which must approve it and return it to the bank before payment can be received. |
| Payables | Related: Accounts payable |
| Pay-as-you-go basis | A method of paying income tax in which the employer deducts a portion of an employee's monthly salary to remit to the IRS. |
| Payback | The length of time it takes to recover the initial cost of a project, without regard to the time value of money. |
| Pay-down | In a Treasuryrefunding, the amount by which the par value of the securitiesmaturing exceeds that of those sold. In the context of general equities, paying a lower price in an accumulation of stock. Antithesis of pay-up. |
| Payee | A person receiving payment through any form of moneytransfer method. |
| Payer | The person making a payment to a payee. |
| Paying agent | An agent who makes principal and interest payments to bondholders on behalf of the issuer. |
| Payment | The amount required to repay a loan, including interest and fees. |
| Payment date | The date on which shareholders of record will be sent a check for the declareddividend. |
| Payment float | Company-written checks that have not yet cleared. |
| Payment-in-kind (PIK) bond | A bond that gives the issuer an option (during an initial period) either to make coupon payments in cash or in the form of additional bonds. |
| Payments netting | Reducing fund transfers between affiliates to only a netted amount. Netting can occur on a bilateral basis (between pairs of affiliates), or on a multi-lateral basis (taking all affiliates together). |
| Payments pattern | Describes the collection pattern of receivables. The pattern might describe the probability that a 72-day-old account will still be unpaid when it is 73 days-old. |
| Payments System | Collective term for mechanisms (both paper-backed and electronic) for moving funds, payments and money among financial institutions throughout the nation. The Federal Reserve plays a major role in the nation's payments system through distribution of currency and coin, processing of checks, electronic transfer of funds and the operation of automated clearinghouses that transfer funds electronically among depository intitutions; various private organizations also perform payments system functions. |
| Payoff diagram | In option pricing, a graph of the value of the option position at expiration as a function of the underlying asset price. |
| Payoff profile | The slope of a line graphed according to the value of an underlying asset on the x-axis and the value of a position taken to hedge against risk exposure on the y-axis. Also used with changes in value. See: Risk profile. |
| Payout period | The time period during which withdrawals from a retirement account or annuity are paid. |
| Payout ratio | Generally, the proportion of earnings paid out to the commonstockholders as dividends. Morespecifically, the firm's cash dividend divided by the firm's earnings in the same reporting period. |
| Pay-to-play | Attempts by municipal bondunderwriting businesses to gain influence with political officials who decide which underwriters are awarded the municipality's business. |
| Pay-up | The loss of cash resulting from a swap into higher-priced bonds or the need/willingness of a bank or other borrower to pay a higher rate of interest to get funds. Used in the context of general equities. (1) When an investor who wants to buy a stock at a particular price hesitates and the stock begins to rise; instead of letting the stock go, he "pays up" to buy the shares at the higher prevailing price. (2) Buy shares in a high-quality company at what is felt to be a high, but supportable, price due to its quality. |
| PBGC | See: Pension Benefit Guaranty Corporation |
| PC | See: Participation certificates |
| P-coast | Refers to west coast listed equity securities. See: Pacific Stock Exchange. |
| PE | The two-character ISO 3166 country code for PERU. |
| Peak | The high point at the end of an economic expansion until the start of a contraction. |
| Pecking-order view (of capital structure) | The argument that external financingtransactions costs, especially those associated with the problem of adverse selection, create a dynamic environment in which firms have a preference, or pecking-order of preferred sources of financing, when all else is equal. Internally generated funds are the most preferred, followed by new debt, and debt-equityhybrids. Finally, new equity is at the least preferred source. |
| PEFCO | See: Private Export Funding Corporation |
| PEG Ratio | See: Prospective earnings growth ratio |
| Pegged exchange rate | Exchange rate whose value is pegged to another currency's value or to a unit of account. |
| Pegging | Making transactions in a security, currency, or commodity in order to stabilize or target its value through market intervention. |
| PEN | The ISO 4217 currency code for the Peruvian Nuevo Sol. |
| Penalty clause | A clause found in contract agreements that provides for a penalty in the event of default. |
| Penalty tax | A federal tax that can be applied if a plan holder does not meet certain requirements when making withdrawals from a tax-advantaged retirement plan (for instance, if the plan holder has not reached age 59-1/2). This penalty tax is owed in addition to any income taxes due. |
| Pennant | A chart pattern resembling a pointed flag, with the point facing to the right, which shows a diminishing variance of price. |
| Penny stock | Used in the context of general equities. Stock that typically sells for less than $1 a share, although it may rise to as much as $10/share after the initial public offering, usually because of heavy promotion. All are tradedOTC, many of them in the local markets of Denver, Vancouver, or Salt Lake City. |
| Pension Benefit Guaranty Corporation (PBGC) | A federal agency that insures the vested benefits of pension plan participants (established in 1974 by the ERISA legislation). |
| Pension fund | A fund set up to pay the pension benefits of a company's workers after retirement. |
| Pension liabilities | Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. |
| Pension parachute | A form of poison pill providing that in the event of a hostile takeover attempt, any excess pension planassets can be used to benefit pension plan participants. This prevents the raiding firm from using the pension assets to finance the takeover. In the context of corporate governance, these provisions prevent an acquirer from using surplus cash in the pension fund of the target in order to finance an acquisition. Surplus funds are required to remain the property of the pension fund and to be used for plan participants' benefits. |
| Pension plan | A fund that is established for the payment of retirement benefits. |
| Pension reversion | Termination of an overfunded defined benefit pension plan and replacement of it with a life insurance company-sponsored fixed annuity plan. |
| Pension sponsors | Organizations that have established a pension plan. |
| Penultimate profit prospect (PPP) | The second-lowest-priced of the ten highest-yieldingstocks in the Dow Jones Industrial Average that is said (by authors O'Higgins and Downes) to be the Dow stock with the best possibility of outperforming the average as a whole. |
| People pill | A form of poison pill providing that the entire management threatens to resign in the event of a takeover. |
| Per annum | Yearly. |
| Per capita debt | The total bondeddebt of a municipality divided by the population of the municipality. |
| Per stirpes | A method for distributing the assets of an individual who dies without a valid will. The Latin means for each descendant. |
| PERC | See: Preferred equity redemption stock |
| Percent to double | Percentage that the stock price has to rise (fall) to double the price of the call (put). |
| Percentage financial statement | Balance sheet and income statement represented as percentages. |
| Percentage order | Used for listed equity securities. Marketlimited price order to buy/sell a specified percentage (usually 50%) of sharestraded (sometimes after a fixed number of shares of the stock have already traded). See: participating buyer/seller, "Participate but do not initiate." |
| Percentage premium | Applies mainly to convertible securities. Premium over parity of a convertible bond divided by parity. |
| Perfect capital market | A market in which there are never any arbitrage opportunities. |
| Perfect competition | An idealized market environment in which every market participant is too small to affect the market price by acting on its own. |
| Perfect forecast line | Graph of a slope that matches the forecast of an exchange rate with the actual exchange rate. |
| Perfect hedge | A situation in which the profit and loss from the underlying asset and the hedgeposition are equal. |
| Perfect market assumptions | Conditions under which the law of one price holds. The assumptions include frictionless markets, rational investors, and equal access to market prices and information. |
| Perfect market view (of capital structure) | Analysis of a firm'scapital structure decision, which shows the irrelevance of capital structure in a perfect capital market. |
| Perfect market view (of dividend policy) | Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy. |
| Perfected first lien | A first attachment on an asset that is duly recorded with the relevant government body so that the lender will be able to act on it should the borrowerdefault. |
| Perfectly competitive financial markets | Markets in which no trader has the power to change the price of goods or services. Perfect capital markets are characterized by certain conditions: (1) Trading is cost less, and access to the financial markets is free; (2) information about borrowing and lending opportunities is freely available; and (3) there are many traders, and no single trader can have a significant impact on market prices. |
| Performance Accelerated Restricted Stock Award Plans ("PARSAPs") | Also known as performance-accelerated restricted stock ("PARS") and time-accelerated restricted stock award plans ("TARSAPs"). Grants of restricted stock or restricted stock units which may vest early upon attainment of specified performance objectives. Otherwise, a time-vesting schedule would remain in effect. |
| Performance attribution analysis | The decomposition of a money manager's performance results to explain the reasons why those results were achieved. This analysis seeks to answer questions such as: (1) What were the major sources of added value? (2) Was short-termfactor timing statistically significant? (3) Was market timing statistically significant? and (4), was security selection statistically significant? |
| Performance bond | A financial guarantee, often from an insurance company, for the performance of an obligation. Typically a construction or development obligation. Most developers require or have contractors arrange for a performance bond equal to 10% of the contract value. This is primarily protection against the costs which would be incurred if the contractor became insolvent. |
| Performance bond | A suretybond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement. |
| Performance evaluation | The assessment of a manager's results, which involves, first, determining whether the money manager added value by outperforming the established benchmark (performance measurement) and, second, determining how the money manager achieved the calculated return (performance attribution analysis). |
| Performance fund | A growth-oriented mutual fundinvesting in growth stock and performance stock with low dividends and high risk. |
| Performance index | A risk-adjusted measure of how well a portfolio has performed. |
| Performance measurement | Calculation of the return a money manager realizes over some time interval. |
| Performance shares | Shares of stock paid out to managers only if the company makes certain sales, earnings per share, or other similar criteria. |
| Performance stock | High-growth stock in a company that retains earnings for further growth and therefore pays no dividends, but that an investor feels has significant future potential. |
| Period of digestion | The time period of often high volatility after a new issue is released when the trading price of the security is established by the market. |
| Period-certain annuity | An annuity that provides guaranteed payments to an annuitant for a specified period of time. |
| Periodic call auction | Selling stocks by bid at intervals throughout the day. |
| Periodic payment plan | Accumulation of capital in a mutual fund by making regular payments on a monthly or quarterly basis. |
| Periodic payments | A series of payments from an annuity, qualified retirement plan, or 403(b)(7) account made over a certain term of years. A payment from an IRA, even if over a period of years, is not considered a periodic payment for tax purposes. |
| Periodic purchase deferred contract | A fixed or variable annuitycontract for which fixed-amount premiums are paid either monthly or quarterly, and that does not begin paying out until a time elected by the annuitant. |
| Periodic rate | The monthly effective interest rate. For example, the periodic rate on a credit card with an 18% annual percentage rate is 1.5% per month. |
| PERLS | Principal Exchange-Rated-Linked Securities. |
| Permanent Assets | Fixed assets (plant and equipment) and permanent current assets. |
| Permanent Current Assets | The minimum level of current assets that a firm needs to continue operation. Because some level is always maintained, they are called permanent current assets. |
| Permanent financing | Long-termfinancing using either debt or equity. |
| Permanent spontaneous current Liabilities | The minimum level of spontaneous liabilities that is always maintained by a firm. |
| Permissiable nonbank activities | Financial activities closely related to banking that may be engaged in by bank holdingcompanies (BHCs), either directly or through nonbank subsidiaries. For example, a BHC might own finance companies or engage in mortgage banking. The Federal Reserve Board determines which activities are closely related to banking. Before making such activities permissible, the Board must determine that performance of the activities by bank holding companies is in the public interest. |
| Perpendicular spread | Optionstrategy involving the purchase of options with similar expiration dates and different exercise prices. |
| Perpetual bond | Nonredeemablebond with no maturity date that pays regular interest rates indefinitely. |
| Perpetual inventory | Recordkeeping system in which bookinventory is updated daily. |
| Perpetual warrants | Warrants that have no expiration date. |
| Perpetuity | A constant stream of identical cash flows without end, such as a British consol. |
| Perquisites | Personal benefits, including direct benefits, such as the use of a firm car or expense account for personal business, and indirect benefits, such as up-to-date office decoration. |
| Personal article floater | Insurance policy attachment designed to cover specified personal valuables. |
| Personal exemption | Amount of money a taxpayer can exclude from personal income for each member of the household in calculation of a tax obligation. |
| Personal income | Total income received from all sources, including wages, salaries, or rents, and the like. |
| Personal inflation rate | The inflation rate as it affects a specific individual. |
| Personal property | See personalty. |
| Personal property | Any assets other than real estate. |
| Personal tax view (of capital structure) | The argument that the difference in personal tax rates between income from debt and income from equity eliminates the disadvantage of the double taxation (corporate and personal) of income from equity. |
| Personal trust | An interest in an asset held by a trustee for the benefit of another person. |
| Personalty | Assets other than land, for example money, goods, stocks and securities. |
| PEs | See preliminary enquiries. |
| Petrodollars | Deposits by countries that receive dollar revenues from the sale of petroleum to other countries; the term commonly refers to OPEC deposits of dollars in the Eurocurrencymarket. |
| PF | The two-character ISO 3166 country code for FRENCH POLYNESIA. |
| PFI | See private finance initiative. |
| PG | The two-character ISO 3166 country code for PAPUA NEW GUINEA. |
| PGK | The ISO 4217 currency code for the Papua New Guinea Kina. |
| PH | The two-character ISO 3166 country code for PHILIPPINES. |
| Phantom income | Income from a limited partnership that creates taxability without generating cash flow. |
| Phantom Stock Award | A type of incentive grant in which the recipient is not issued actual shares of stock on the grant date but receives an account credited with a certain number of hypothetical shares. The value of the account increases over time based on the appreciation of the stock price and the crediting of phantom dividends. Payout may be settled in cash or stock. |
| Phantom stock plan | An incentive scheme that awards management bonuses based on increases in the market price of the company's stock. |
| Phase space | A graph which shows all possible states of a system. In phase space we plot the value of a variable against possible values of the other variables at the same time. If a system had three descriptive variables, we plot the phase space in three dimensions, with each variable taking one dimension. |
| Philadelphia Board of Trade (PBOT) | A subsidiary of the Philadelphia Stock Exchange that trades currency futures. |
| Philadelphia Stock Exchange (PHLX) | A securitiesexchange trading American and European foreign currency options on spot exchange rates. |
| Philippine Stock Exchange | Established in 1992 through the merger of the Manila Stock Exchange and the Makati Stock Exchange, the Philippines'only securities market. |
| Phillips Curve | A graph that supposedly shows the relationship between inflation and unemployment. It is conjectured that there is a simple trade-off between inflation and unemployment (high inflation and low unemployment, and low inflation and high unemployment). Named after A.W. Phillips. Obviously, the relation between these important macroeconomicvariables is more complicated than this simple graph would suggest. For a modern treatment, see work of Robert Lucas. |
| PHLX | See: Philadelphia Stock Exchange |
| Phone switching | Transferringmoney between funds in the same mutual fund family by telephone request. There may be a charge associated with these transfers. Phone switching is also possible among different fund families if the funds are held in street name by a participating broker/dealer. |
| PHP | The ISO 4217 currency code for the Philippines Peso. |
| Physical asset | Actual property such as precious metals or real estate. Also called real or tangible assets. |
| Physical commodity | See: Commodity |
| Physical completion | The state in which a project is physically functioning, but not yet fully generating cash flow. |
| Physical option | An option whose underlying security is a physical commodity that is not stock or futures. The physical commodity itself (a currency, treasury debt issue, commodity) - underlies that option contract. See also index option. |
| Physical verification | A procedure auditors use to ensure that inventory recorded in the book is correct by actually checking out the physical inventory. |
| PIBOR | See: Paris Interbank Offer Rate |
| Pickup | The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds. |
| Pickup bond | A bond with a relatively high coupon that is close to the date at which it is callable, meaning that a fall in interest rates will most likely cause early redemption of the bond at a premium. |
| Picture | Describes bid and askedprices a broker quotes for a given security. Used for listed equity securities. Bid and ask prices and quantity information from a specialist or from a dealer regarding a particular security (i.e., "IBM's 1/4 to 1/2, 5m by 10m"). |
| Pie model of capital structure | A model of the debt-equity ratio of the firms, graphically depicted in slices of a pie that represent the value of the firm in the capital markets. |
| Piece | Apply mainly to convertible securities. Increment of bonds that trade in portions of $1000 minimum. Not all bonds can be traded in "pieces," and the increments can vary. |
| Pier | A man made structure extending from the shore against which vessels may lie to load or unload cargo. |
| Piggyback registration | When a securitiesunderwriter allows existing holdings of shares in a corporation to be sold in combination with an offering of new public shares. |
| Piggybacking | A broker who tradingstocks, bonds or commodities in a personal account following a trade just made for a customer. The broker assumes that the customer is making the trade on valuable inside information. |
| PIK | See: Payment-in-kind bond |
| PIK (Payment-in-kind) securities | Highly bonds or preferred stock that pay interest or dividends through additional bonds or preferred stock. |
| PINC | Property income certificate. Essentially the right to receive part of the income from a property or (more likely) a portfolio of properties. The intention was to create a market separate from that for the land and buildings that would have greater liquidity. |
| Pink sheets | Refers to over-the-counter trading. Daily publication of the National Quotation Bureau that reports the bid and askprices of thousands of OTC stocks, as well as the market makers who trade each stock. |
| Pip | Used for listed equity securities. Smallest unit of a currency (i.e., cents for US dollars). |
| PIPE | See: Private Investment in Public Equity |
| Pipeline | The underwriting process that must be completed with the SEC before a security can be offering for sale to the public. |
| Pit | A specific area of the trading floor that is designed for the trading of commodities, individual futures, or option contracts. |
| Pit committee | A committee of the exchange that determines the daily settlement price of futures contracts. |
| PITI | Stands for principal, interest, taxes, and insurance, the four main parts of monthly mortgageobligations. |
| Pivot | Price level established as being significant by market's failure to penetrate or as being significant when a sudden increase in volume accompanies the move through the price level. |
| PK | The two-character ISO 3166 country code for PAKISTAN. |
| PK | A suffix that refers to Pink Sheets |
| PKR | The ISO 4217 currency code for the Pakistani Rupee. |
| PL | The two-character ISO 3166 country code for POLAND. |
| Place | The marketing of new securities, usually through sales to institutional investors. See: Float. |
| Placement | The transfering of securities to a small group of investors. |
| Placement ratio | The percentages of last week's new municipal bondofferings that have been bought from the underwriters, according to the Bond Buyer newspaper. |
| Plain vanilla | A term that refers to a relatively simple derivativefinancialinstrument, usually a swap or other derivative that is issued with standard features. |
| Plain vanilla swap | See: Fixed for floating swap |
| Plan agreement | A document detailing the terms and conditions of a retirement plan such as an IRA. |
| Plan for reorganization | A plan for reorganizing a firm during the Chapter 11bankruptcy process. |
| Plan participants | Employees or other beneficiaries who are eligible to receive benefits from a company's employee benefit plan. |
| Plan sponsors | The entities that establish pension plans, including private business entities acting for their employees; state and local entities operating on behalf of their employees; unions acting on behalf of their members; and individuals representing themselves. |
| Planned amortization class (PAC) |