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P/B Ratio
see Price to Book.
P/E Ratio
see Price to Earnings.
Pairs Trade
2 equities spread bets placed (normally) in the same sector but in opposing directions. Eg buying RBS and selling Barclays, the Pairs Trade makes money if RBS outperforms Barclays in either a bull or bear market.
Par Value
Face value of a security.
Partial Fill or Part Fill
Where the client has specified that they wish only part of their stake filled on a closing order.
Penny Shares
Firms with a low market capitalisation. Many shares on smaller exchanges such as AIM are penny shares.
PIGS
Portugal, Italy, Greece, Spain (not always deemed to be a complementary acronym).
PIIGS
Portugal, Italy, Ireland, Greece, Spain (not always deemed to be a complementary acronym).
Pip
Percentage in Point. This is normally used in FX trades and refers to the last quoted digit of a foreign exchange rate.
Point / per Point
Also referred to as a pip or tick. These terms refer to the smallest unit movement required to alter the profit/loss on your bet by the full stake amount. A bet per point on the FTSE is a bet for each point the FTSE moves. A bet per point on Shell is a bet for each penny the Shell share price market moves. A bet per point on Gold is a bet for each $0.10 (10¢) the Gold market moves. Also see Unit Risk.
Portfolio
A collection of investments.
Power of Attorney
Authorising someone to spread bet on your behalf. Same as Authority to Deal.
Pre-market
Spread betting companies will make a market on certain products even before they have opened in the underlying market. For example the FTSE 100 opens at 8am but spread betting companies may quote their prices from 7am. Not all markets are offered in pre-market, usually only the biggest and most popular ones. These markets often come with wider spreads.
Preferred Stock
Companies raise capital through the issue of two basic types of stock (common stock and preferred stock). Preferred stock has elements of both debt and equity. Technically a form of equity investment, preferred stock also has fixed income and call provisions. Preferred stockholders have legal priority over common stockholders in respect of earnings and in the event of bankruptcy.
Premium (i)
The amount by which one contract month differs from another month in the same instrument, eg December FTSE is trading at 6300 whilst March is at 6350 thus March is at a premium of 50 over December.
Premium (ii)
When a derivative is trading above the current market price it is said to be trading at a premium. A futures market that is trading above the level of the spot market is said to be trading at a premium.
Price-to-Book (P/B)
This reflects a company's ability to grow its net asset base and generate higher returns on equity. The P/B ratio compares a company's share price with its book value of equity, also referred to as 'shareholders funds' or 'total assets less total liabilities'. A high P/B ratio may suggest that a company is overvalued or that investors are willing to pay a premium over a company's 'accounting book value'.
Price-to-Earnings (P/E)
The P/E reflects a company's ability to generate profits. It compares a company's share price with its latest annual earnings per share. A high ratio may mean that a company is overvalued or could reflect investors' willingness to pay a premium on every unit of earnings. A low P/E ratio can suggest that a company is relatively undervalued. A low P/E does not always mean that a stock is a good buying opportunity, in some circumstances it can suggest that a company is close to bankruptcy.
Price-to-Sales (P/S)
A way to value a company's share price in light of potential profitability. This measure is based on revenue rather than earnings. It is therefore often used to value young, fast growing and possibly loss making companies. With new companies there is often little or no historical profit data which means a P/S ratio is used to derive estimated value rather than a P/E ratio.
Product Group
This describes the type of market eg Equities, Indices, Commodities, Forex etc.
Profit Warning
Normally an unexpected announcement of negative news in relation to a company's balance sheet.
ProSpreads
A spread betting company based in Gibraltar. Regulated by the Financial Services Commission. Also see ProSpreads Review.
Pull an Order
Cancel an order.
Put or Put Option
A financial derivative instrument used in options trading. A put would give an investor the right, but not the obligation, to sell shares at a fixed price up to a predetermined date. The opposite of a 'put' is a 'call'.
£1 per point: Start trading £1 per point/tick & an initial deposit of £30
Multiple markets: Forex , Commodities, Indices & Equities
Risk Warning - Spread betting carries a high level of risk to your capital & you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seek financial advice where necessary & make sure spread betting meets your investment objectives.
(1) The FTSE Rolling Daily Spread is 1 tick during market hours & 4 ticks out of hours. 1 Tick is defined as a full FTSE point. See our Product Information for more details. (2) The above information is correct at time of writing. (3) Tax Law can change.
FinancialSpreads.com is a trading name of London Capital Group Ltd which is authorised & regulated by the Financial Services Authority (FSA). Registered address: is 4th Floor, 12 Appold Street, London EC2A 2AW. All information correct at time of publication.
Risk Warning:
Spread Betting carries a high level of risk
to your capital and you can lose more than your initial investment,
it may not be suitable for all investors. Ensure you only
speculate with money that you can afford to lose and that you fully
understand the risks involved and seek independent financial advice where necessary.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
