Glossary of Stock Market
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P/E Ratio - Price-Earnings Ratio
PE ratio or PE multiples is the ratio arrived by dividing Current market Price by Earnings per share of that stock.
Par Value
The face value or the price of a share, debenture, or bond that is written on the certificate. It is not the market price.
Pay In
The designated day on which the members pay securities and fund to the clearing house.Par Value
The face value of a bond.
Pay Out
The designated day on which the Clearing House effects payment and deliveries to the membersPension Fund
A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees.
Payout Ratio
Percentage of earnings paid out in dividends.
Penny Stocks
This term is typical to the USA stock markets. Low-priced issues, often highly speculative, selling at less than $1 a share. Frequently used as a term of disparagement although some penny stocks have developed into investment-caliber issues. In India they are called low-Capped stocks and BSE has a separate index for them. It is not unusual, When a bull market is raging, to find the index for these stocks outpacing the Sensex. These stocks offer larger returns but at higher risk.
Poison Pill
Steps taken by a corporation to thwart a hostile takeover attempt. For instance, a company could issue rights to purchase shares at a substantial discount after a merger, or it might issue preferred shares giving holders the right to redeem their shares at a discount after a merger.
Pledge
To deposit securities with a lender as security for money borrowed.
Poop And Scoop
A highly illegal practice occurring mainly on the Internet. A small group of informed people attempt to push down a stock by spreading false information and rumors. If they are successful, they can purchase the stock at bargain prices.
Portfolio
The group of assets - such as stocks, bonds and mutuals - held by an investor.
Preferred Stock
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.
Debt instruments. Preferred shareholders are paid a head of common stock holders in the event the corporation is liquidated. Convertible preferred shares can be converted into common stock according to predetermined conditions. Mostly these types of stocks pay a fixed dividend regardless of corporate earnings and have priority over common stock in the payment of dividends. However, it carries no voting rights, and should earnings rise significantly the preferred holder is stuck with the same fixed dividend while common holders collect more. The fixed income stream of preferred stock makes it similar in may ways to bonds. It is like a fixed deposit in a bank. You are stuck with a fixed return regardless of how high interest rates climb. On the other hand, If interest rates fall, you can congratulate yourself on a wise decision.
Premium
The difference between the higher price paid for a fixed-income security and the security's face amount at issue.
For bonds and preferred stock, the premium is the amount by which the price exceeds the face, or par value. For options markets, the premium is synonymous with the options price. In other words, you have to pay a little extra upfront if you want to be shielded from the fluctuations of enquiry stock.
Price Target
A projected price level as stated by an investment analyst or advisor.
Private Company
A company whose ownership is private.
Pro-Rata
Used to describe a proportionate allocation.
Profit Taking
The action of selling stock to cash in on a sharp rise. This action pushes prices down temporarily.
Public Company
A company that has issued securities through an initial public offering and which are traded on at least one stock exchange.
Public Offering
The sale of equity shares or other financial instruments by an organization to the public in order to raise funds for business expansion and investment.
Pump And Dump
A scheme attempting to boost the price of a stock through recommendations based on false, misleading, or greatly exaggerated statements.
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