P

Par

(i) Price of 100%.
(ii) The principal amount at which the issuer of a debt security contracts to redeem at maturity.
(iii) The nominal value of a security.

Par value

The amount, exclusive of interest or premium, due to a security holder at maturity. The face value (par value) of a security is shown on the face of the security's certificate.

Partizipationsscheine

On Swiss exchanges, a bearer security incorporating the same rights as the dividend-right certificate and thus similar to that. It is issued for the purpose of raising capital, and its nominal value is part of the equity of the company.

Passive managers

Fund managers who do not attempt to beat the market. Instead, they try to mirror the performance of a selected market index.

Payment date

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

Penny stocks

Low-priced stocks selling at less than USD1 a share, often highly speculative.

Perpetual

A security without a time limit for redemption.

Pink sheets

A list of securities which are traded by OTC market-makers, published by the National Quotations Bureau; the price quotations for equity securities are published on pink sheets, those of debt securities on yellow sheets.

Pip

1/100 of 1% of the nominal value of a security.

Pit

See Ring

Point

The smallest increment of price movement possible in trading a given futures contract.

Portfolio

A collection of securities held by an investor.

Position limit

The maximum position, either net long or net short, in one commodity future or in all futures of one commodity combined which may be held or controlled by one person.

Preferential form

The London Stock Exchange allows companies offering shares to the public to set aside up to 10% of the issue for applications from employees and, where a parent company is floating off a subsidiary, from shareholders of the parent company.

Preferred ordinary shares

See Preferred stock

Preferred stock

Shares that pay dividends at a specified or sometimes adjustable rate and have preference over ordinary shares (common stock) in the payment of dividends and liquidation of assets.

Premium

(i) Options, the price a put or call buyer must pay to a put or call seller for an option contract.
(ii) The amount by which the market price of a bond exceeds its par value.

Present value

The discounted value of future cash flows.

Price-earnings ratio

Current price of a stock divided by its trailing 12-months earnings.

Primary market

The market relating to the original issue or 1st sale of new securities.

Principal

A dealer who buys or sells stock for his/her own account.

Principal orders

Activity by a broker/dealer when buying or selling for its own account and risk. Also called principal trades.

Principal trades

See Principal orders

Private placement

An issue that is offered to a single or a few investors as opposed to being publicly offered.

Privatisation

The conversion of a state run company to PLC status, often accompanied by a sale of its shares to the public.

Probate price

In the UK, the price used to assess the value of shares for inheritance tax purposes. The probate price is calculated by dividing the difference between the bid and offer prices by 4 and adding the result to the lower of the 2 prices.

Program trade

Program trading is defined as a wide range of portfolio trading strategies involving the purchase or sale of 15 or more stocks having a total market value of USD1 million or more.

Prospectus

A document giving the details that a company is required to make public, to support a new issue of shares.

Proxy

A form which, when completed by the shareholder, grants another person the authorisation or power to vote on his/her behalf at company meetings.

Public Limited Company (PLC)

In the UK, a public company limited by shares and having a share capital, and which may offer shares for purchase by the general public. Only PLCs may qualify for listing or trading on the London Stock Exchange.

Put option

A put option confers the right but not the obligation to sell stock, shares or futures at the option exercise price within a predetermined time period.