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Par:

The nominal or face value of a security. A bond selling at par is worth the same dollar amount as it was issued for, or at which it will be redeemed at maturity, usually $1000. For common stock, the company issuing the stock sets par value. Par value is an assigned amount (usually $1) that is used in computing the dollar value of the company's shares for accounting and reporting purposes. See also BOND.

Parity:

A term used to describe an option contract's total premium when that premium is the same amount as its intrinsic value. For example, when an option's value is equal to its intrinsic value, it is said to be "worth parity." When an option is trading for only its intrinsic value, it is said to be "trading for parity." Parity may be measured against the stock's last sale, bid, or offer.

Pacific Exchange, Inc. (PCX):

The Pacific Exchange operates as one exchange with three trading floors: Stock floor: San Francisco, Options floor: San Francisco and Stock floor: Los Angeles. It is the only SEC-regulated stock exchange on the West Coast. The exchange trades equities, bonds, warrants, and equity and index options.

Payment Date:

Date on which a declared stock dividend or a bond interest payment is scheduled to be made.

Pay-Out Ratio:

The portion of a company's profits that is paid out to the shareholders in the form of dividends.

Penny Stocks:

Extremely low-priced securities that trade over the counter; technically, unlisted equities selling at less than $5.00 per share.

Philadelphia Stock Exchange (PHLX):

The Philadelphia Stock Exchange trades equities, equity options, index options, and currency options. It was the first organized exchange in the United States and founded in 1790.

Pin Risk:

The risk to an investor (option writer) that the stock price will exactly equal the strike price of a written option at expiration; i.e., that option will be exactly at the money. The investor will not know how many of his/her written (short) options he/she will be assigned. The risk is that on the following Monday he/she might have an unexpected long (in the case of a written put) or short (in the case of a written call) stock position, and thus be subject to the risk of an adverse price move.

Pink Sheets:

The daily listing of stocks, prices, and market makers for over-the-counter (OTC) stocks too small in capitalization to be listed in the NASDAQ system.

Portfolio:

All taxable and tax-deferred investment accounts and their contents (appreciating & income producing assets). More broadly, your portfolio holds all your investments.

Position Limits:

The maximum number of option contracts that may be held on the same side of the market for a particular security. The number may vary depending on the security.

Position Trading:

An investing strategy in which open positions are held for an extended period of time, usually six months to a year or more.

Position:

The combined total of an investor's open option contracts (calls and/or puts) and long or short stock. It is an investor's stake in a particular security or market.

Precious Metals Equities Fund:

Mutual fund investing primarily in stocks of companies who mine precious metals, such as gold, silver, platinum, etc. The stock prices of these companies can also reflect the rising or falling values of the precious metals that the company mines.

Preferred Stock:

Stock that pays dividends at a stated rate and has priority over common stock in dividend payments and asset liquidation. Preferred stock does not ordinarily carry voting rights. Participating Preferred Stock allows its owners to share in profits beyond the declared dividend. Convertible preferred stock allows the owner to exchange this stock for a number of common shares.

Premium:

Total price of an option: intrinsic value plus time value.

Premium Bond:

A note or bond selling at a price above par.

Price (52-Week high and 52-Week Low):

The highest and lowest trade prices achieved during the past 52 weeks. Note: Compare current price to the 52-week high or 52-week low to get an estimate of where the stock is trading in its year range.

Price/Book Ratio:

The latest price per share divided by the last fiscal year net asset value (book value) per share, for a given corporation. Used by analysts to determine whether a stock is undervalued or overvalued.

Price/Earnings (P/E) Ratio:

The most commonly used measure of value for both markets and individual stocks. It indicates how many times earnings an investor is willing to pay to own a stock or market index, therefore it is sometimes called the multiple. A trailing P/E is the current price divided by the latest fiscal year's reported earnings per share. While a forward P/E uses an analyst's forecast of next year's earnings in the ratio.

Primary Market:

Also called New Issue Market, it is the market for new issues of securities where the proceeds of sales go to the issuer of the securities.

Prime Rate:

Interest rate that commercial banks charge their most credit worthy customers, such as corporations. This is a useful measure for current lending rates, as most banks charge a few points above prime on mortgages, personal loans, and other less credit worthy customers.

Principal Amount:

The original amount or face value of a investment, typically bonds and CDs, on which interest is earned. Interest is paid based on a percent of the principal (a stated interest or coupon rate). At maturity, the entire principal is returned to investor; however, its purchasing value may be diminished by inflation.

Principal Transaction:

A transaction, in which the brokerage firm buys or sells a security into or out of its own account. Commission is not charged for principal transactions. Instead the transaction is marked up or down before it is entered to the customer's account. See also BROKER/DEALER.

Proceeds:

The amount of money a shareholder receives from a sale of stock minus a broker's commission. Also the money credited to a borrower less costs and fees.

Profit Margin %:

The last fiscal year net income divided by the last fiscal year's sales or revenues for a given corporation.

Prospectus:

A formal written offer to sell securities that states the price of the new issue, delivery date, relevant financial information, business history of the company as well as other information that can help the investor make an informed decision. It must be given to every investor who purchases a newly issued security.

Put Option:

A put option gives the owner the right, but not the obligation, to sell the underlying stock at a given price (the strike price) by a given time (the expiration date). The owner is speculating that the option will go up in value and the underlying stock will go down in value. The purpose can be to either speculate with the option (hope it goes up and sell for a profit) or trade the underlying stock at a locked in price if the stock price goes down enough.