PAYMENT DATE Date on which a declared stock dividend or a
bond interest payment is scheduled to be made.
PHONE SWITCHING In mutual funds, the ability to transfer
shares between funds in the same 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
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
POINT AND FIGURE CHART A price-only chart that takes into
account only whole integer changes in price, i.e., a 2-point
change. Point and figure charting disregards the element of
time and is solely used to record changes in price.
PREFERRED STOCK A security that shows ownership in a
corporation and gives the holder a claim, prior to the claim
of common stockholders, on earnings and also generally on
assets in the event of liquidation. Most preferred stock
pays a fixed dividend, stated in a dollar amount or as a
percentage of par value. This stock does not usually carry
PREMIUM The price of an option contract, determined on the
exchange, which the buyer of the option pays to the option
writer for the rights to the option contract.
PRICES Price of a share of common stock on the date shown.
Highs and lows are based on the highest and lowest intraday
PRICE/BOOK RATIO Compares a stock's market value to the
value of total assets less total liabilities (book).
Determined by dividing current price by common stockholders
equity per share (book value), adjusted for stock splits.
Also called Market-to-Book.
PRICE/EARNINGS RATIO Shows the "multiple" of earnings at
which a stock sells. Determined by dividing current price by
current earnings per share (adjusted for stock splits).
Earnings per share for the P/E ratio is determined by
dividing earnings for past 12 months by the number of common
shares outstanding. Higher "multiple" means investors have
higher expectations for future growth, and have bid up the
P/E RATIO EQUATION Assume Y Co sells for 30 per share and
has earned 3 per share this year. 30 = 10 times 3 Y stock
sells for 10 times earnings.
PRICE/SALES RATIO Determined by dividing stock's current
price by revenue per share (adjusted for stock splits).
Revenue per share for the P/S ratio is determined by
dividing revenue for past 12 months by number of shares
PRIMARY MARKET The first buyer of a newly issued security
buys that security in the primary market. All subsequent
trading of those securities is done in the secondary market.
PROFIT MARGIN Indicator of profitability. Determined by
dividing net income by revenue for the same 12-month period.
Result is shown as a percentage.
PROGRAM TRADING Trades based on signals from computer
programs, usually entered directly from the trader's
computer to the market's computer system and executed
PROSPECTUS Formal written document to sell securities that
describes the plan for a proposed business enterprise, or
the facts concerning an existing one, that an investor needs
to make an informed decision. Prospectuses are used by
Mutual Funds to describe the fund objectives, risks and
other essential information.
PROXY Document intended to provide shareholders with
information necessary to vote in an informed manner on
matters to be brought up at a stockholders meeting. Includes
information on closely held shares. Shareholders can and
often do give management their proxy, representing the right
and responsibility to vote their shares as specified in the
PUT OPTION An option contract that gives the holder the
right to sell (or "put"), and places upon the writer the
obligation to purchase, a specified number of shares of the
underlying stock at the given strike price on or before the
expiration date of the contract.
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