Paid in Capital
The difference between par or
book-keeping, value of a security and the amount realized from the sale or
distribution of those shares by the company.
Paid up Capital
The amount of capital, both
equity and preference, paid up by the shareholders against the capital
subscribed to by them.
Paper Profits/Paper Loss
Unrealized profit/loss that exist
only on paper because the investor has not finalized the transaction by
actually selling the securities.
Par Value
Means the face value of
securities.
Pari Passu
A term used to describe new issue
of securities which have same rights as similar issues already in existence.
Partial Tender Offer
A tender offer for less than all target shares; specifies a
maximum number of shares to be accepted, but does not announce bidder’s plans
with respect to the remaining shares.
Participating Preference Shares
The right of certain preference shareholders to participate
in profits after a specified fixed dividend contracted for is paid.
Participation right is linked with the quantum of dividend paid on the equity
shares over and above a particular specified level.
Partly Paid
Shares on which full nominal value has not been called up.
Pay In/Pay Out
The days on which the members of a Stock Exchange pay or
receive the amounts due to them are called pay in or pay out days respectively.
Payment netting
Settling payments due on the same date and in the same
currency on a net basis.
Penny Stocks (U.S.)
Generic term for very low priced
stocks- sometimes selling at a few pennies per share sometimes for a dollar or
two- in speculative companies.
Persons acting in concert (PAC)
Individual(s) /company(ies)/ any
other legal entity(ies) who are acting together for a common objective or for a
purpose of substantial acquisition of shares or voting rights or gaining
control over the target company pursuant to an agreement or understanding
whether formal or informal.
Pig
Operators who get killed by the
speculators.
Pink Sheets
Listing of Over the Counter
Stocks, the dealers who trade them and the prices at which these dealers are
willing to buy and sell. Printed daily on loud pink newsprint and found in
brokerage house and many banks.
Placing Power
The ability of the financial
institutions to place securities with the investor.
Plain vanilla transactions
The
most common and generally the simplest types of derivatives transaction. Plain
vanilla is a relative concept, and no precise list of plain vanilla
transactions exists. Transactions that have unusual or less common features are
often called exotic or structured.
Players
A diverse range of intermediaries
and institutional investors active in the capital market. This includes
securities firms, broker dealers, commercial banks, merchant banks, unit
trust/mutual fund etc.
Poison Pill (U.S.)
A defence technique when a
company issues to its shareholders a special preferred dividend stock which is
convertible, after a takeover, into the acquirer’s shares. The successful bidder
thus faces the prospect of heavy dilution.
Poison Put
A provision in some new bond
issues designed to protect bondholders against takeover-related credit
deterioration of the issuer. Following a triggering event, bond holders may put
their bonds to the corporation at an exercise price of 100-101 percent of the
bond’s face amount.
Ponzi Scheme
A classic contrick that has been
repeated many times both before and since Charles( Carlo) Ponzi gave it its
name in the 1920s. The scheme begins with a crook setting up as a deposit
taking institution. The crook invites the public to place deposits with the
institution, and offers them a generous rate of interest. The interest is then
paid out of new depositors’ money, and the crook lives well off the old deposits.The
whole scheme collapses when there are not enough new deposits coming in to
cover the interest payment due on the old ones. By that time the modern day
Ponzi hopes to be living under an alias in a hot country with few extradition
laws.
Pooling
The basic concept behind mutual funds in which a fund
aggregates the assets of investors who share common financial goals. A fund
uses the investment pool to buy a diversified portfolio of investments and each
mutual fund share purchased represents ownership in all the funds underlying securities.
Pools
A pool is essentially the same type of practice as a
matched order, but involves more than one person colluding to generate
artificial market activity.
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
A collection of securities owned by an individual or an
institution (such as a mutual fund) that may include stocks, bonds and money
market securities.
Portfolio investment
Investment which goes into the
financial sector in the form of treasury bonds and notes, stocks, money market
placements, and bank deposits. Portfolio investment involves neither control of
operations nor ownership of physical assets.
Portfolio manager
Any person who pursuant to a contract or agreement with a
client ,advises or directs or undertakes on behalf of the client (whether as
discretionary portfolio manager or otherwise) the management or administration
of a portfolio of securities or the funds of the client as the case may be.
Portfolio Turnover
A measure of the trading activity in a funds investment
portfolio – how often securities are bought and sold by a fund.
Position limit
The maximum number of listed option contracts on a single
security which can be held by an investor or group of investors acting jointly.
Position netting
The netting of payment instructions in respect of
obligations between two or more parties, but which neither satisfies nor
discharges those original obligations.
Position trading
Type of trading involving the
holding of open positions for an extended period of time.
Preferred Stock / Preference Shares
Owners of this kind of stock are
entitled to a fixed dividend to be paid regularly before dividend can be paid
on common stock .They also exercise claims to assets, in the event of
liquidation, senior to holders of common stock but junior to bondholders.
Holders of preferred stock normally do not have a voice management.
Preferential allotment
Further issue of shares /
securities convertible into equity shares at a later date, to a select group of
persons in preference to all the existing shareholders of the company.
Premium
If an investor buys a security
for a price above its eventual value at maturity he has paid a premium for it.
Price Band
The range within which the price
of a security or the index of a currency is permitted to move within a given
period.
Price discovery
A general term for the process by
which financial markets attain an equilibrium price, especially in the primary
market. Usually refers to the incorporation of information into the price
Price Earning Ratio
The ratio of the market price of
the share to earnings per share. This measure is used by investment experts to
compare the relative merits of a number of securities.
Price rigging
When persons acting in concert
with each other collude to artificially increase or decrease the prices of a
security, the process is called price rigging.
Price sensitive information
Any information which relates
directly or indirectly to a company and which if published is likely to
materially affect the price of securities of the company.
Prime Rate
The interest rate on loans, which a bank is charging its
best, most credit-worthy business customers. This interest rate affects all
borrowers - not merely those who actually pay the prime rate because the level
of the prime rate and the direction in which it is moving tend to determine
other interest rates.
Profit Taking
Realizing profits by closing out an existing position
Programme Trading
A technique, which uses decision
rules, usually programmed on a computer, to generate trading decisions
automatically.
Proprietary Fund (sub account)
A fund where in the ownership of the funds is that of the
Foreign Institutional Investor.
Prospectus
Any document described or issued as a prospectus and
includes any notice, circular, advertisement or other document inviting
deposits from the public or inviting offers from the public for the
subscription or purchase of any shares in, or debentures of, a body corporate.
Proxy
One who votes for and on behalf of a shareholder at a
company meeting.
Proxy Battle
A battle between a company and some of its own
shareholders. It starts with a group of dissident shareholders soliciting
proxies in order to force through a shareholder resolution.
Public Announcement
A public announcement is an announcement made in the
newspapers by the acquirer primarily disclosing his intention to acquire shares
of the target company from existing shareholders by means of an open offer.
Public Issue
An invitation by a company to public to subscribe to the
securities offered through a prospectus.
Public Securities Trust
Pooled unit trust which invest unit holders money in
government and semi government securities.
Puffing advertisement
Advertising or planting some news in the newspaper or in
any media in respect of a proposed corporate action and later taking the stand
that the Board of directors did not approve the proposed corporate action or
news about financial results, given in misleading or distorted manner intended
to generate or induce trading in the scrip.
Pump and dump
A highly illegal practice occurring mainly on the internet.
A small group of informed people buy a stock before they recommend it to
thousands of investors. The result is a quick spike in the price followed by an
equally quick downfall. The people who have bought the stock early sell off
when the price peaks.
Put-Call Parity Relationship
The relationship between the price of a put and price of a
call on the same underlying with the same expiration date, which prevents
arbitrage opportunities.
Put Option
An option that gives the right to sell a fixed number of
securities at a specified price (the strike price) within a specified period of
time.
