Paper Trading
Hypothetical trades that does not involve real money transactions. Paper trading is a risk-free way to learn trading and/or investing.
Parabolic SAR
Indicator that sets trailing price stops for long or short positions. Referred to as the "stop-and-reverse indicator", Parabolic SAR is more popular for setting stops than for establishing direction or trend. If the trend is up, buy when the indicator moves below the price.
Passive Management
Mutual fund management style in which the fund manager simply attempts to replicate the return of a market index, usually by holding the securities that comprise the index.
Penny Stock
Stock that usually sells for less than $1 per share, though the price may rise above $1 per share. Penny stocks are very risky due to their lack of widely available information and poor liquidity.
Percentage Price Oscillator
Indicator based on the difference between two moving averages expressed as a percentage. The PPO is derived by subtracting the longer moving average from the shorter moving average and then dividing the difference by the longer moving average.
Percentage Volume Oscillator
Percentage difference between two moving averages of volume expressed as a percentage. The PVO is found by subtracting the longer volume moving average from the shorter volume moving average and then dividing the difference by the longer moving average.
Percent Investment Advisors Bullish
Measurement of stock market bullish sentiment. When 35% of Investment Advisors are bullish, the market is considered oversold and a reading of 55% is considered to be overbought.
Pivot Point
Point which resistance is pierced and the stock price begin to rise past the prior resistance level.
Positive Reversal
When RSI forms a lower low and the security forms a higher low.
Premium
Payment that a policy owner makes when purchasing an insurance policy or an annuity. Premium also can refer to an amount by which the sale price of a bond or stock exceeds the par, or face, value.
Price Alert
A notification sent (usually via email and/or text message) when a stock reaches the price that an investor has set. The goal here is for the investor to take an action (close position/open position) after receiving the Price Alert.
Price/Earnings Ratio
Price of a stock divided by the company earnings per share ie: stock selling at $30, with earnings of $3 per share for the previous year, has a P/E ratio of 10 (30/3 = 10).
Price Oscillator
Indicator based on the difference between two moving averages that is expressed as either a percentage or in absolute terms.
Price Patterns
Patterns that appear on price charts seeking predictive values. Patterns are divided into reversal or continuation patterns.
Primary Beneficiary
Beneficiary that is designated first in line to inherit a financial asset following an individual's death. Individuals typically name primary beneficiaries for life insurance, annuities, employer-sponsored retirement plans, individual retirement accounts, and other assets. Secondary, or contingent, beneficiaries inherit assets if the primary beneficiary dies or declines the inheritance.
Prospectus
The official document that describes a mutual fund to prospective investors. A prospectus contains information required by the SEC, such as investment objectives and policies, risks, services, and fees.
Psition Trading
Style of trading characterized by holding open positions for longer than a day.