| Par: |
Par
refers to a price of 100, e.g., "Stock XYZ rallied over par today,
closing at 101 5/8."
|
| Pennant: |
A
short-term congestion pattern (perhaps one to three weeks) that narrows
into the form of a small triangle. (Pennants are essentially shorter
duration triangle patterns.) See also Flag.
|
| Pit: |
The
area on the trading floor where trading is conducted by open outcry. |
| Pivot: |
When
a market is rallying and today's low is lower than the low of the highest
day in the rally, that high becomes a pivot, or swing high. When a market
is declining and today's high is higher than the high of the lowest
day, then that low becomes a pivot, or swing low.
|
| Point
and Figure Chart: |
Point
and figure chart. The point and figure chart differs from other price
charts in that its time axis is not constant--prices are not plotted
day by day or week by week, etc. Instead, point-and-figure charts
use columns of ascending Xs and descending Os to portray up moves
and down moves (of a certain magnitude), respectively, in a market.
For
example, every X might represent a .5 point rise (referred to as the
"box size") in the stock's price. Price declines would only
be denoted by a column of Os if price fell, say, 1.5 points (three
boxes, referred to as the "reversal amount"). In this case,
if the stock rose from 25 to 25.5 to 26 to 26.5, you would add three
Xs to your column of Xs, one for each .5 point rise from 25 to 26.5.
If it rose only a quarter point or a half-point, or declined only
a point, you would do nothing. Only when price dropped by 1.5 points
or more would you stop adding ascending Xs and start a column of descending
Os immediately to the right.
The
larger the box size and reversal amount you use, the less sensitive
your chart will be to smaller price fluctuations. Because a one-point
move (or whatever increment you use for your box size) may occur in
one hour or two days, the price action depicted in a point-and-figure
chart is independent of time.
|
| Position: |
This
is the specific instance of a chosen “strategy”.
An option position is an investment comprised of one or more
options.
|
| Position
Limit: |
The
maximum number of speculative contracts one can hold as determined by
theCFTC and/or the exchange where the contract is traded.
|
| Position
Trader: |
A
trader who either buys or sells contracts and holds them for an extended
period of time, as distinguished from a day trader. |
| Prearranged
Trading: |
Trading
between brokers in accordance with an expressed or implied agreement
or understanding. Prearranged trading is a violation of the Commodity
Exchange Act. |
| Price
Discovery: |
The
process of determining the price of a commodity by trading conducted
in open outcry at an exchange. |
| Price
Limit: |
The
maximum advance or decline, from the previous day's settlement price,
permitted for a contract in one trading session. Also referred to as
Maximum Price Fluctuation. |
| Premium: |
This
is the price of an option contract. |
| Pullback: |
A
shorter-term countertrend move. Pullbacks offer opportunities to enter
existing trends. See also Corrections. |
| Purchase
and Sale Statement (P&S): |
A
statement sent by a Futures Commission Merchant to a customer when a
futures or options position has been liquidated or offset. The statement
shows the number of contracts bought or sold, the prices at which the
contracts were bought or sold, the gross profit or loss, the commission
charges and the net profit or loss on the transaction. Sometimes combined
with a Confirmation Statement. |
| Put: |
This
option contract conveys the right to sell a standard quantity of a specified
asset at a fixed price per unit (the striking price) for a limited length
of time (until expiration). |
| Put/Call
Ratio: |
This
ratio, used by many as a leading indicator, is computed by dividing
the 4-day average of total put volume by the 4-day average of total
call volume. |
| Pyramiding: |
The
use of unrealized profits on existing positions as margin to increase
the size of the position, normally in successively smaller increments. |