2: An abbreviation used in options listings in newspapers to identify an option as a put options.

See: Put Option

Pacific Stock Exchange

See: Regional Stock Exchanges

Paper Profit (Loss)
Any profit or loss on a security that is not realized because it has not actually been sold.

See: Realized Profit (Loss)

Par
1: The face value or principal value of a bond, usually $1,000 per bond. A bond trading at par is trading at its face value.

See: Face Value

2: A preferred stocks' face value, usually $100 per share. The stock's book value, liquidating value and dividend payments are based on the par value.

See: Book Value; Preferred Stock

3: A common stock's stated value. It is primarily used for bookkeeping purposes and has no relationship to its market value.

See: Common Stock

Parity
A condition that occurs when the market value of a convertible bond is equal to the market value of the common stock.

Partial Delivery
Term used when a seller does not deliver the full amount of shares sold. Partial delivery would occur, for example, if 500 shares were sold and the seller only delivers 400.

See: Fail To Deliver

Par Value

See: Par

Payment Date
Date on which declared stock dividend or bond interest is paid to holders of record.

See: Dividend; Record Date

Payment-In-Kind Securities (PIK)
Bonds and preferred stocks whose interest and dividends are paid in additional bonds or preferred stock.

See: Bond; Preferred Stock

Payout Ratio
The percentage of a corporation's earnings that are paid to shareholders as dividends. For example, a corporation that pays a $.12 dividend out of every $1.00 of earnings has a payout ratio of 12%.

See: Dividend

P/E Ratio
The relationship between a stock's price and its earnings per share. It is calculated by dividing the stock's price per share by earnings per share for a twelve month period. For instance, a stock selling for $25 a share and earning $5 a share is said to be selling at a P/E ratio of 5.

The ratio, also known as the "multiple", gives an investor an approximation of how much they are paying for a corporation's earning power. Low P/E stocks are usually in mature industries. They may be blue chip or out of favor companies. In either case, their growth potential is limited. Companies with high P/E ratios (over 20) are usually up-and-comers that are fast growing. These companies are riskier investments.

See: Blue Chip; Earnings Per Share; Out Of Favor; Risk

Penny Stock
A low priced stock that is traded in the over-the-counter market. It typically sells for less than $1 a share. Penny stocks are very volatile and speculative.

See: Over The Counter; Risk; Speculation; Volatility

Pension Fund
A fund that is set up to pay pension benefits to retired employees of a corporation, government entity, or to other organizations. The fund's earnings are tax deferred until withdrawn by the retiree, who is then responsible for paying taxes on the amount withdrawn.

See: Legal List; Prudent Man Rule; Rate Of Return; Tax Deferred

Performance Fund
A mutual fund whose goal is to achieve maximum growth of capital--sometimes called "aggressive growth funds". The fund invests in companies that are in high growth cycles. Such companies typically do not pay dividends as its earnings are plowed back into the firm for expansion. Although these funds have a higher risk than a growth or balance fund, it is not considered to be speculative.

See: Aggressive Growth Fund; Growth Fund; Growth Stock; Mutual Fund; Risk/Reward Ratio; Speculation

Perpetual Warrant
A warrant that gives the holder the right to buy a fixed number of common shares of stock at a fixed price. It does not have an expiration date.

See: Subscripton Warrant

PFD (Preferred Stock)
An abbreviation that is commonly used on order tickets to indicate a preferred stock. A preferred stock is a type of capital stock that pays dividends at a set rate (at the time of issuance). Dividend payments to preferred holders must be made before common stock dividends can be paid. Preferred stocks usually do not have voting rights.

See: Capital Stock; Cumulative Preferred Stock; Non-Cumulative Preferred Stock; Voting Right

PHLX
Abbreviation for the Philadelphia Stock Exchange.

See: Regional Stock Exchanges; Stock Exchange

PIK Securities (Payment-In-Kind)
Bonds and preferred stocks whose interest and dividends are paid in additional bonds or preferred stock.

See: Bond; Preferred Stock

Pink Sheets
A National Quotations Bureau daily publication that lists market maker's bid and asked prices from the prior day for over-the-counter securites. Equity securites are printed on long pink paper, hence the name. Debt securities are printed on long yellow sheets, hence their name, yellow sheets.

See: Asked Price; Market Maker; National Quotation Bureau; Over The Counter; Yellow Sheets

P&L (Profit And Loss Statement)
A summary of a corporation's revenues, costs, and expenses within an accounting period--also called an "Income Statement".

See: Balance Sheet; Financial Statement; Income Statement

Pledge
The transfer of property, such as securities, to a creditor (or lender) as collateral for an obligation--such as securities bought on margin or a bank loan. "Assign" differs from pledge (or hypothecate) as an assignment involves a transfer of title, whereas pledging does not.

See: Assign; Collateral; Hypothecation; Margin

Plus
1: A sign used to indicate that a transaction for a particular security was at a higher price than the previous transaction.

2: A fractional variation used to indicate a Treasury note or bond that is being quoted in 64ths. For instance, 93.16+ means 93 and 33/64th of par. The numerator is 2 times 16 plus 1; 64 is the denominator.

See: Treasuries

3: In newspaper stock listings, a + in the change column means that the closing price of a security is higher than the previous day's close by the amount in the column.

See: Closing Price

Plus Tick
Security transaction executed at a price higher than the preceding transaction in the same security--also called an "uptick". For each security in which its last price is higher than the preceding transaction, a plus sign is displayed next to its price at the trading post on the floor of the NYSE. Short sales can only be executed on upticks or zero plus ticks.

See: Sell Short; Uptick Rule; Zero Plus Tick

PMV (Private Market Value)
The aggregate value of a corporation if it is broken into individual operations and each piece is given its own stock price--also called "breakup value" or "takeover value". Analysts look for corporations with high PMV relative to its current market value to identify potential takeover targets and bargains. It differs from the corporation's liquidating value because it does not include going-concern value.

See: Fundamental Analysis; Going Concern Value; Takeover; Target Company

POA (Power Of Attorney)
Written document that permits a third party to do transactions on the behalf of the person signing the document. Depending on the specifications within the document, a power of attorney may be full or limited.

See: Trading Authorization

Point
1: In stocks, a point equals $1. If ABC shares rise 1 1/4 points, each share has risen $1.25.

2: In bonds, a point equals $10 since a bond is quoted as a percentage of $1,000. A bond that rises 2 1/2 points gains 2.5% of 1,000, or $25. Thus, a bond that advances from 89 to 91 1/2 means a gain in dollar value from $890 to $915.

3: In market averages, the point is a unit of movement in an average. It is not equivalent to any dollar value. For example, if the Dow-Jones Industrial average rises from 4236 to 4258.5, it has risen 22.5 points.

POP
See: Public Offering Price

Portfolio
The holdings of more than one stock, bond, cash equivalent or other asset by an individual or institution. A portfolio may be designed to achieve the investors goals--such as obtaining maximum returns or reducing risk through diversification.

See: Diversification; Risk; Risk/Reward Ratio

Portfolio Turnover
A measure of the trading activity in the fund's portfolio of investments. In other words, how often securities are bought and sold.

Position Building
The accumulation of a long or short position in such a manner as to not push the security's price up or down. This method of slowly building a large position is used by institutional investors.

See: Institutional Investor; Long Positon; Short Position

Positive Yield Curve
On debt securities of similar quality, a condition in which the yields on long term securities are higher than the yields on short term securities. Typically, short term interest rates are lower than long term rates--those who invest their money for longer periods are taking more risk.

See: Debt Securities; Long Term; Negative Yield Curve; Risk; Short Term; Yield

Post
A structure shaped like a horseshoe that is located on the floor of the NYSE. Specific securities are traded at each post. Monitors surrounding the post display quotations for the securities traded at that particular post.

See: Floor; New York Stock Exchange

Power Of Attorney (POA)
Written document that permits a third party to do transactions on the behalf of the person signing the document. Depending on the specifications within the document, a power of attorney may be full or limited.

See: Trading Authorization