Choose a letter above or browse financial terms for the currently selected letter below. Click on the term name to see any articles that are related to the term.

Paper Profit (loss)

A profit (or loss) that has not yet been realized because the security is still held.

Par

A security’s dollar amount, as stipulated by the issuing institution. Par value for a bond is the face (maturity) value.

Participating Preferred

Preferred stock that pays an additional dividend (participating dividend) based on common stock dividend payments.

Penny Stocks

A highly speculative stock selling for less than five dollars per share.

Point

A unit of financial measurement. Stock points are one dollar per share. Debt instrument points are one percent of face value. Loan or mortgage points are one percent of the loan amount.

Portfolio

An individual or institution’s collection of assets (financial and/or real).

Position

The number of securities contracts either owned (long) or owed (short).

Preferred Stock

A security that usually pays a fixed dividend and that gives the holder a claim on corporate earnings and assets that is superior to that of holders of common stock.

Premium

Amount paid for a stock above its par value.

Price-to-earnings Ratio

Common measure of a stock’s price. Determined by dividing the current stock price by current earnings per share (adjusted for stock splits) for one year. If a stock is trading at $20 per share and is earning $2 per share, its P/E ratio is 10.

Primary Distribution

Another term for initial public offering (IPO).

Prime Rate

A commercial bank’s lowest interest rate, charged to their most credit-worthy customers.

Principal

The total amount of money being borrowed or loaned. The person affected by a broker’s actions.

Privatization

The act of returning government-owned to privately held.

Probate

The review of a will by a legal authority to determine validity, as well as the process of distributing a deceased person’s property to heirs.

Product Cycle

The time needed to bring new and/or improved products to the market.

Profit-taking

When investors sells stocks that have appreciated since purchase to realize profits. Typically followed by a market downturn.

Program Trading

Trades based on directions issued from computer applications and executed automatically.

Prospectus

A formal written offer to sell securities that sets forth the plan for a proposed business enterprise, or the facts concerning an existing one that an investor needs to make an informed decision.

Proxy

Written power of attorney given by a shareholder of a corporation, authorizing someone to vote on his or her behalf at corporate meetings.

Proxy Statement

Material information required by the Securities and Exchange Commission to be given to a corporation’s stockholders as a prerequisite to solicitation of votes. It is required for any issuer subject to the provisions of the Securities Exchange Act of 1934.

Public Offering

The sale of registered securities in the public market through an underwriter.

Put

An option granting the right (but not the obligation) to sell a security at a specified price on or before a specific date.

Put Price

The price at which an asset will be sold if a put option is exercised. Also called the strike price.