200 terms

Dictionary: P

P and L watching: Managing a trade by the money on the screen rather than by the chart, which is the fastest route to cutting winners and widening losers.
P-hacking: Adjusting the data, sample, or test until a result crosses the significance threshold, then presenting it as if the analysis was planned.
p-value: The probability of seeing a result at least as extreme as yours if the null hypothesis were true. Small means surprising, not necessarily true or profitable.
P/E ratio: Share price divided by earnings per share; how many years of current earnings you are paying for.
Painting the tape: Executing trades, often between colluding accounts, to produce a misleading printed record of activity or price that lures other participants into a security.
Pairs trading: Going long one security and short a related one when their historical price relationship stretches, expecting the spread to revert.
Palladium futures (PA): NYMEX contracts on 100 troy ounces of palladium, a thin and violently volatile market driven by petrol autocatalyst demand and Russian and South African supply.
Panic selling: Exiting on fear rather than on a rule, typically at the worst available price and in the last stage of a move down.
Paper hands: Selling at the first sign of trouble or a small profit; the opposite of diamond hands.
Paper trading: Simulated trading with fake money on real prices, used to practice execution and test rules without risk.
Par value: A nominal legal value printed in the charter, often a fraction of a cent for common stock, with almost no relationship to market price.
Par yield curve: The curve of coupon rates at which bonds of each maturity would price exactly at par; the shape most commonly shown as the yield curve.
Parabolic SAR: A dot trailing above or below price that accelerates as a trend extends, designed by Welles Wilder as a stop and reverse mechanism.
Parameter: A number in a trading rule that you chose rather than derived, such as a lookback length, a threshold, or a stop distance.
Parameter optimisation: Searching parameter space for the settings that maximise some objective; useful for mapping the landscape, dangerous as a way to choose settings.
Parameter plateau: A broad region of parameter values that all produce similar, decent results; the shape you want instead of a single sharp peak.
Parameter sensitivity: How much a strategy's results change when you nudge its inputs; a robust strategy degrades gracefully, a fitted one collapses.
Parametric VaR: Value at risk computed from a volatility estimate and an assumed distribution, usually the normal one - fast to calculate and reliably too small.
Parasocial guru: A trading personality the audience feels they know personally, which converts entertainment into trust that was never earned.
Parent order: The full size a trader wants done, held by an algorithm or broker and never exposed to the market in one piece.
Parity: An option trading at exactly its intrinsic value, with no time value left; the floor for an in-the-money contract.
Parkinson volatility: A range-based estimator using the high and the low of each bar. Roughly five times more efficient than close-to-close, but it ignores gaps.
Partial fill: An execution that satisfies only part of an order, leaving the remainder working, cancelled or expired depending on the order's instructions.
Participation rate: The proportion of an underlying's gain that a structured note passes to the investor, which can be below, at, or above 100% depending on the other features.
Participation rate (POV): An algorithm setting that trades a fixed share of whatever volume actually prints, speeding up in active markets and pausing in quiet ones.
Passporting and reverse solicitation: The EU mechanism letting a firm authorised in one member state serve clients across the bloc, and the narrow exception allowing service to a client who approached the firm entirely on their own.
Patience: Waiting without drifting - staying engaged through the periods where nothing qualifies, which is most of the time.
Pattern day trader (PDT) rule: A FINRA rule requiring US margin accounts under $25,000 to make no more than three day trades in any five-business-day period.
Payment date: The day the dividend cash actually arrives in shareholder accounts, typically two to six weeks after the record date.
Payment for order flow (PFOF): Compensation a broker receives from a market maker for routing customer orders to it.
Payoff diagram: A chart of profit and loss at expiration against the underlying price; the standard way to see what a structure actually does.
Payoff ratio: Average win divided by average loss, which sets how often you need to be right to break even.
Payout split: The percentage of profits a funded prop trader keeps, commonly 80% to 90%, with the firm taking the rest.
PCE price index: The inflation measure the Federal Reserve actually targets, published with the monthly personal income and outlays report; it usually runs a few tenths below CPI.
Peak-end rule: Remembering an experience mostly by its most intense moment and its ending, which distorts how you recall a trading day or a whole month.
Peer review group: A small, closed group of traders who review each other's execution rather than sharing calls.
PEG ratio: The price-to-earnings multiple divided by the expected earnings growth rate; a rough attempt to compare companies growing at different speeds.
Pegged order: An order whose limit price automatically tracks a reference such as the bid, the ask or the midpoint, re-pricing as the market moves.
Pennant: A small symmetrical triangle that forms directly after a sharp move, with both boundaries converging over just a handful of bars.
Penny increment program: An exchange scheme letting selected option classes quote in $0.01 steps instead of $0.05 or $0.10, tightening spreads on the most liquid names.
Penny stock: A very low-priced stock, commonly under $5 and often traded over the counter, with wide spreads, heavy dilution, and frequent promotion schemes.
Pension obligation: The present value of retirement payments promised to employees, netted against the assets held in the pension fund to give a surplus or deficit.
Percent above moving average: The share of stocks in an index trading above a given moving average, most often the 50 or 200 day, used as a breadth gauge.
Percent B: A normalised reading of where price sits within the Bollinger Bands, where 1 is the upper band, 0 is the lower band and 0.5 is the middle.
Percent return versus R: Two units for scoring trades: percentage of account, which mixes in sizing decisions, and R, which isolates the quality of the trade.
Percent volatility sizing: Sizing so that a typical daily move in the instrument, not a chart stop, costs a fixed percentage of equity.
Percentage Price Oscillator: MACD expressed as a percentage of the slower moving average, so readings can be compared across instruments at different price levels.
Perfectionism: Requiring flawless execution and the perfect entry, which produces missed trades, harsh self-judgement, and eventual avoidance.
Performance anxiety: Anxiety about executing well that interferes with executing well, strongest when the outcome is watched, reported, or deadlined.
Performance attribution: Decomposing a return into its sources: market exposure, sector or factor tilts, timing, selection, and residual. It tells you whether the reason you made money is the reason you thought.
Performance bond: The exchange's own name for futures margin: a deposit guaranteeing you can meet your obligations, not borrowed money.
Performance fee: A share of gains paid to the manager, usually subject to a high-water mark and sometimes a hurdle, charged on top of a base management fee.
Performance reporting: The presentation of investment results, where choices about period, fee basis, benchmark and composition can change the picture without changing a single trade.
Permabear: Someone who is bearish in all conditions, whose eventual correctness in a downturn is presented as foresight.
Permabull: Someone who is bullish in all conditions, so their view carries no information about the current market.
Permutation test: A significance test that scrambles the link between signal and outcome many times to see how often chance alone produces your result.
Perpetual futures (perps): Crypto derivative contracts with no expiry date that track the spot price through a periodic funding payment between longs and shorts.
Perpetuity growth rate: The rate at which cash flows are assumed to grow forever after the forecast period, capped in practice by long-run economic growth.
Personal circuit breaker: A hard, mechanical stop on your own trading - a loss limit, a trade count, or a platform lockout - that acts without requiring your agreement.
Petrocurrency: A currency whose value is closely tied to oil, either because the country exports it in size or because oil revenues dominate its government finances.
PFIC basics: A punitive US regime for foreign pooled investments, catching most non-US listed funds and ETFs held by US persons, with heavy default taxation and annual reporting.
Phantom liquidity: Displayed size that vanishes rather than trades, inflating apparent depth and making a book look far more absorbent than it is.
Phillips curve: The proposed inverse relationship between labour market slack and inflation; the theoretical basis for believing that cooling the jobs market cools prices.
Physical delivery: Expiry method where the short delivers the actual commodity to the long, through exchange-approved locations and grades.
Physically settled option: A contract that delivers the actual underlying — usually 100 shares — when exercised or assigned.
Piercing line: A two-candle bullish pattern where a red candle is followed by a green candle that opens lower and closes above the midpoint of the red body.
Pin bar: A bar with a long shadow and a small body at the opposite end, showing that price probed a level and was rejected.
Pin risk: The risk of not knowing whether a short option that finishes exactly at the strike will be assigned, leaving an unhedged stock position over the weekend.
Pink sheets: The lowest-disclosure tier of OTC trading, where companies may file little or no financial information.
Pip: The standard unit of price change in forex, usually the fourth decimal place (0.0001), or the second for yen pairs.
Pip value: The money a one-pip move is worth on your position, set by trade size, the quote currency, and the rate used to convert into your account currency.
Pip value on crosses: Working out what a pip is worth when neither currency in the pair is your account currency, which requires a second conversion rate.
PIPE: A private placement of shares by a listed company to selected institutions, usually at a discount, with the shares registered for resale shortly afterwards.
Pipette: One tenth of a pip, the fifth decimal place on most pairs and the third on yen pairs, added so brokers can compete on sub-pip spreads.
Pit trading: The original method of futures trading, conducted by shouting and hand signals in tiered octagonal pits on an exchange floor.
Pivot point: A set of levels calculated from the prior period's high, low and close, giving a mechanical central price and support and resistance bands.
Plan abandonment: Dropping the written plan mid-session and trading on impression, usually after a loss or a missed move.
Plan of reorganization: The document filed in a Chapter 11 case that sets out the restructured balance sheet and exactly what each class of creditor and shareholder receives.
Planning fallacy: Systematically underestimating how long things take and how much they cost - including how long it takes to become consistently profitable.
Platinum futures (PL): NYMEX contracts on 50 troy ounces of platinum, quoted in dollars per ounce with a tick of $0.10 worth $5.
Plaza Accord: The 1985 agreement among five major governments to weaken the US dollar through coordinated intervention, and the clearest example of official action successfully moving an exchange rate.
PM settlement: Settlement based on the closing price on expiration day, so the contract trades right up to the final bell.
PMI (Purchasing Managers' Index): A monthly survey of business activity where a reading above 50 signals expansion and below 50 signals contraction.
Pod shop: A multi-strategy firm organised as many small independent teams, each running its own book under strict risk limits, with the platform providing capital, financing and technology.
Point and figure: A time-free chart of X columns for rising prices and O columns for falling prices, where a new column starts only after a set reversal.
Point of control (POC): The single price level where the most volume traded within a volume profile.
Point value: The dollar value of a one-point move in a futures contract, equal to the contract multiplier.
Point-in-time data: Data stored as it was known on each historical date, including the wrong first estimates, rather than as it looks after later corrections.
Poison pill: A defence that lets all shareholders except a hostile bidder buy new shares cheaply, massively diluting anyone who crosses an ownership threshold.
Polarity principle: The idea that once a level breaks, it tends to reverse roles: broken support acts as resistance, and broken resistance acts as support.
Policy lag: The delay between a change in the policy rate and its full effect on output and inflation, conventionally described as long and variable and usually put at 12 to 24 months.
Politically exposed person (PEP): A person entrusted with a prominent public function, plus close family and associates, treated as higher risk for corruption and subject to enhanced due diligence.
Poor man's covered call: A long deep in-the-money LEAPS call standing in for 100 shares, with a short near-dated out-of-the-money call sold against it.
Portfolio beta: The capital-weighted average beta of your holdings, expressing the whole book's sensitivity to the benchmark.
Portfolio heat: The total amount you would lose if every open position hit its stop at the same time.
Portfolio margin: A risk-based margin regime that sets requirements from a stress test of the whole portfolio rather than fixed percentages per position, rewarding genuine hedges.
Portfolio turnover: The proportion of a portfolio traded over a year, used as a proxy for trading costs and, in taxable accounts, for how much gain is likely to be realised.
Portfolio volatility: The standard deviation of the whole book's returns, which is lower than the weighted average of position volatilities unless everything is correlated.
Position effect (open vs close): The flag on an options order stating whether it opens a new position or closes an existing one; it drives open interest and margin.
Position Greeks: The Greeks of a whole position or account, scaled by contract count and multiplier, rather than the per-share numbers shown on a chain.
Position limit: A cap on how many contracts one participant may hold in a derivative, imposed by exchanges or regulators to limit manipulation and concentration risk.
Position limits: Hard caps on how many contracts one trader or related group may hold in a product, set by exchanges and the CFTC.
Position netting: An account model in which all trades in one instrument combine into a single position with one average entry price, rather than existing as separate tickets.
Position size creep: Size drifting upward over weeks without a decision, usually after good results, until the normal position is far larger than the plan.
Position size rounding: Always rounding the calculated quantity down, so rounding error reduces risk instead of adding to it.
Position sizing: Deciding how many shares or contracts to trade so that the distance to your stop equals your chosen dollar risk.
Post-only order: An order that must add liquidity: if it would trade immediately against a resting order, it is re-priced or cancelled instead.
Post-reorganization equity: The fresh shares issued when a company exits Chapter 11, usually handed to former creditors; they are a different security from the old cancelled stock.
Post-trade review: A structured look back at a closed trade, scoring what you did rather than what you got.
Potential GDP: The level of output an economy can sustain with labour and capital fully but not over-employed; the sum of labour force growth and productivity growth over time.
POV algorithm: An execution schedule that targets a fixed share of whatever volume prints, so it works faster when the market is busy and pauses when it is quiet.
Pre-announcement: A company releasing results or revised expectations ahead of the scheduled date, almost always because the deviation from guidance is too large to hold back.
Pre-market routine: A fixed sequence before the session that sets levels, size, limits, and state, so the first decision of the day is not made cold.
Pre-market session: Trading before the 09:30 open, typically from 04:00, with thin volume, wide spreads, limit orders only at most brokers, and no exchange auction pricing.
Pre-mortem: Imagining the trade or the quarter has already failed, then writing down why, before you commit.
Pre-tax income: Profit after interest but before income tax; the base that the effective tax rate is applied to.
Pre-trade risk check: Automated limits applied before an order reaches the market — maximum size, price bands, notional caps, message rates and duplicate detection.
Precedent transactions: Valuing a company by the multiples paid in past acquisitions of similar businesses, which normally sit above trading multiples because of the control premium.
Preferred stock: A share class that ranks ahead of common stock for dividends and liquidation, usually pays a fixed rate, and usually has no vote.
Premium: The price of an option, quoted per share and paid per contract of 100 shares.
Premium (bond trading above par): A bond whose market price is above face value, which happens when its coupon is higher than the yield the market currently demands.
Premium and discount to NAV: The gap between a fund's market price and its net asset value, small and short-lived in ETFs and often large and permanent in closed-end funds.
Prepaid expenses: Costs paid in advance that have not yet been consumed, such as insurance premiums, software licences and rent, carried as a current asset until used.
Prepayment risk: The risk that mortgage borrowers repay early, usually to refinance when rates fall, handing the investor cash back at exactly the wrong moment.
Presale: Selling tokens before public trading begins, usually at a discount to insiders and early backers, with lock-ups that vary widely.
Present bias: Weighting how you feel right now above what you decided earlier, which is how yesterday's plan loses to today's impulse.
Present value: What a future sum is worth today once discounted for the time and risk involved in waiting for it.
Price action: Reading the raw movement of price itself, usually bar by bar, without relying on calculated indicators.
Price banding: An exchange filter that rejects orders priced too far from the current market, protecting against fat fingers and runaway algorithms.
Price discovery: The process by which competing orders reveal what an asset is currently worth, concentrated in venues and moments where real risk is transferred.
Price feed aggregation: Combining quotes from many venues, often by median, so no single exchange outage, wick or manipulated market sets the on-chain price.
Price impact: How far your own order moves the price, measured against the price before you traded. On an AMM it is a function of trade size relative to pool depth.
Price improvement: Executing better than the prevailing best quote — buying below the national offer or selling above the national bid — usually in fractions of a cent per share.
Price to free cash flow: Market cap divided by free cash flow; how many years of current cash generation the market is paying for the equity.
Price to tangible book: Market cap divided by tangible book value; a balance-sheet valuation used mainly for banks, insurers and asset-heavy businesses.
Price-time priority: The most common matching rule: better prices trade first, and among orders at the same price the one that arrived earliest fills first.
Price-to-book ratio: Share price divided by book value per share; a rough gauge of how much the market pays above accounting net worth.
Price-to-sales: Market cap divided by revenue; an equity-level revenue multiple that ignores the debt sitting between the shareholder and the sales.
PRIIPs KID: A standardised three-page European disclosure for packaged retail investment and insurance products, showing risk on a 1 to 7 scale, performance scenarios and aggregated costs.
Primary dealer: A bank or broker-dealer approved to trade directly with the New York Fed, obliged to bid at every Treasury auction and to make markets in government securities.
Primary peg: A pegged order that tracks the near side of the market: the bid for a buy, the ask for a sell, usually with a small offset.
Primary trend: In Dow Theory, the major multi-month or multi-year direction of the market, which secondary reactions interrupt but do not end.
Prime broker: A bank that lends its credit standing to a fund so the fund can trade with many counterparties while settling everything through one relationship.
Prime of prime (PoP): A firm that holds a prime brokerage relationship and resells institutional-grade liquidity and credit to smaller brokers and funds.
Principal-protected note: A structured note that returns at least the original amount at maturity if the issuer remains solvent, while paying a capped or participation-based return linked to a market.
Printing: Making money quickly and easily, as if the account were a printer; also, a trade or price appearing on the tape.
Prior day high and low: The previous session's extremes, among the most widely watched intraday reference levels because everyone can see them without drawing anything.
Priority fee: The extra amount per unit of gas paid directly to the block producer to get your transaction included sooner.
Private credit: Lending to companies outside public bond markets and outside banks, usually through funds that originate and hold floating-rate loans to mid-sized borrowers.
Private equity: Investment in companies that are not publicly listed, usually through closed-end partnerships with a ten-year life that buy, hold and eventually sell operating businesses.
Private key: The secret number that authorises spending from an address; whoever holds it controls the funds, permanently and without appeal.
Private mempool: Sending a transaction directly to block builders instead of the public queue, so bots cannot see it in advance and trade against it.
Private placement: A sale of securities to a limited group of accredited or institutional buyers without a public offering, exempt from full registration but restricted on resale.
Private placement (Regulation D): The main US exemption from securities registration for private offerings, chiefly Rule 506(b) with no advertising and 506(c) with advertising to verified accredited investors only.
Pro forma: Figures restated as if something had already happened or had never happened, such as a full year of an acquisition or the removal of a disposed division.
Pro rata matching: An allocation rule that fills every resting order at a price level in proportion to its size rather than by time priority.
Pro-rata allocation: A matching rule that splits an incoming order across all resting orders at a price in proportion to their size, rather than filling the earliest first.
Probabilistic Sharpe ratio: The probability that a strategy's true Sharpe ratio exceeds some benchmark, given the observed Sharpe, the sample length, and the return distribution's shape.
Probability of backtest overfitting: An estimate of how often the strategy you would have chosen in sample turns out to be below median out of sample.
Probability of default (PD): The estimated chance a borrower defaults over a stated horizon, derived from ratings history, structural models, or implied from credit spreads.
Probability of expiring in the money: The modelled chance that an option finishes with intrinsic value at expiration; close to its delta, and what most platforms display.
Probability of profit: The modelled chance a position is profitable at expiration, accounting for the premium paid or received rather than just the strike.
Probability of touch: The chance the underlying trades at a given strike at any point before expiration; roughly double the probability of expiring beyond it.
Probability weighting: The systematic tendency to overweight rare events and underweight likely ones when they are stated as probabilities.
Process goals: Targets defined by behaviour you control - following the plan, sizing correctly, taking only listed setups - rather than by money.
Process over outcome: Judging a trade by whether it followed the plan rather than by whether it made money, because good decisions and good results are different things in the short run.
Producer price index (PPI): A measure of prices received by domestic producers, covering goods and services at the wholesale stage; watched as an input cost gauge and for the components that feed PCE.
Productivity: Output per hour worked; the ultimate source of rising living standards and the variable that determines how fast wages can grow without causing inflation.
Professional client classification: A regulatory category for clients who meet experience, portfolio and activity tests, and who can therefore be offered higher leverage without the retail protections attached.
Profit factor: Gross profits divided by gross losses over a set of trades; above 1.0 is profitable, and 1.5 to 2.0 is considered solid.
Profit giveback: Returning an open gain to the market, which hurts more than an equivalent loss because the peak has become your reference point.
Profit target: The gain required to pass a prop-firm evaluation, usually 6% to 10% of the account size.
Profitability factor: The finding that firms with higher operating profitability relative to assets have earned higher returns than low-profitability firms with similar valuations.
Proof of reserves: A published cryptographic demonstration that a custodian holds assets matching customer balances, usually a Merkle tree of accounts plus signed wallet addresses.
Proof of stake: A consensus system where block producers are chosen in proportion to coins they lock up, and lose those coins for cheating.
Proof of work: A consensus system where block producers spend electricity searching for a valid hash, making history expensive to rewrite.
Prop firm (proprietary trading firm): A company that gives traders access to its capital, or a simulated version of it, in exchange for a fee and a share of profits.
Prop firm fee model: The revenue structure behind an evaluation-based prop firm: challenge fees, monthly platform charges, reset fees and data fees, offset against payouts to successful traders.
Property, plant and equipment: Land, buildings, machinery and vehicles the company uses to operate, carried at purchase cost less accumulated depreciation.
Prospect theory: The finding that people evaluate gains and losses against a reference point, feel losses about twice as hard, and distort small probabilities.
Prospective Plantings report: The USDA's end-of-March survey of what farmers intend to plant, which sets the supply expectations the new-crop contracts trade against all summer.
Prospectus: The formal offering document delivered to buyers of a registered security, describing the issuer, the terms, the risks and the fees, with liability attaching to material misstatements.
Protected quote: A displayed, immediately accessible, automated quotation at the top of an exchange's book, which other venues are forbidden to trade through.
Protective put: Buying a put against shares you own to cap the downside, like an insurance policy with a deductible and a premium.
Protocol treasury: The pool of assets a protocol controls, usually governance tokens plus accumulated fees, spent on development, incentives and liquidity.
Proxy fight: A campaign to win shareholder votes and replace some or all of a company's directors, usually run by an activist investor.
Proxy statement: The filing that sets out what shareholders are being asked to vote on, plus executive pay, board details, and large ownership stakes.
Public key: The shareable half of a key pair, derived from the private key, used to verify signatures and generate an address.
Puell multiple: Daily miner revenue in dollars divided by its own 365-day average, used to judge whether issuance-driven sell pressure is unusually high or low.
Pullback: A temporary move against the prevailing trend before it resumes.
Pump: A sharp, promoted advance in price driven by coordinated buying and hype rather than by information.
Pump and dump: A scheme where promoters inflate a thin asset's price with hype and coordinated buying, then sell to the buyers they attracted.
Pump group: An organised group that coordinates buying an illiquid asset to spike the price, then sells into the demand the spike attracts.
Purchasing power parity (PPP): The idea that exchange rates should eventually settle where the same basket of goods costs the same in both countries, making it a long-run anchor rather than a trading signal.
Purged cross-validation: Cross-validation that deletes training observations whose labels overlap in time with the test set, removing a common source of leakage.
Put option: A contract giving the buyer the right, but not the obligation, to sell 100 shares at a set strike price before expiration.
Put-call parity: The no-arbitrage relationship linking a call, a put, the stock and a bond: call minus put equals stock minus discounted strike.
Put-call ratio: Put volume divided by call volume over a period, used as a contrarian sentiment gauge; more reliable in aggregate equity data than in single names.
Putable bond: A bond the holder may sell back to the issuer at a set price on set dates; the investor is long an option, so the bond yields less than a comparable bullet.
Pyramiding: Adding to a winning position in decreasing increments while raising the stop, so total open risk stays capped.

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