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Term Definition: # |
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Parity (1) Foreign exchange dealer's slang for your price is the correct market price. (2) Official rates in terms of SDR or another pegging currency. 
Parities The value of one currency in terms of another. 
Pip/Point The smallest price unit for any foreign currency (e.g. for USD/CHF one point [or pip] equals .0001 Swiss francs, and for USD/JPY one point [or pip] equals 0.01 Japanese yen).
Posted Margin The part of the margin balance that is posted to Delta Stock in support of the customerís open position and unrealized losses.
Political Risk The uncertainty in return on an investment due to the possibility that a government might take actions that are detrimental to the investor's interests.
Profit Taking The unwinding of a position to realize profits.
Profit/Loss or "P/L" or Gain/Loss The actual gain or loss in US dollars resulting from trading activities on closed positions, plus the theoretical gain or loss on open positions that have been marked to market.
Price Transparency Describes quotes to which every market participant has equal access. 
Par: (1) The nominal value of a security or instrument.(2) The official value of a currency.
Parallel rate of exchange: The unofficial rate of exchange operating in a parallel market which may or may not be officially condoned.
 
Paris: A term for USDFRF Spot Rate.
Paris Club: Informal grouping of governments run by the Bank of France which meets on an ad hoc basis to seek agreement on measures to be taken when a country is unable to repay its foreign government to government borrowings on time.
Parity: (1) Foreign exchange dealers' slang for your price is the correct market price.(2) Official rates in terms of SDR or other pegging currency.
Parities: The value of one currency in terms of another.
Parity Grid: A term used in the context of the European Monetary System which consists of the upper, central and lower intervention points between member currencies.
Partly Paid: In the United Kingdom, the full issue price of a gilt is often paid in either two or three installments. The initial payment is made upon application and the remaining payment(s) is made within a few months.
Payment date: The date on which a dividend or bond interest payment is scheduled to be paid.
Plaza Accord: The 1985 Plaza Hotel agreement by the G5 to lower the dollar.
Pegged: A system where a currency moves in line with another currency, some pegs are strict while others have bands of movement.
Petrodollars: Foreign exchange reserves of oil producing nations arising from oil sales.
PIBOR: Paris Inter-bank Offered Rate.
Pip: See point (0.0001 of a unit)
Pit: See Ring.
Point: (1) 100th part of a per cent, normally 10,000 of any spot rate. Movement of exchange rates are usually in terms of points. (2) One percent on an interest rate eg from 8% -9%. (3) Minimum fluctuation or smallest increment of price movement.
Portfolio insurance: An option hedging strategy to protect long cash market positions
Position Account: See Conversion Account.
Position Clerk: A clerk who assist the dealer in recording a dealers position and ensures that all deal tickets are completed and transferred to the back office or input into the books in a position keeping system.
Position limit: The maximum position, either net long or net short, in one future or in all futures of one currency or instrument combined which may be held or controlled by one person.
Position: The netted total commitments in a given currency. A position can be either flat or square ( no exposure), long, (more currency bought than sold), or short ( more currency sold than bought).
Producer Price Indices: See wholesale price indices.
Pre-Spot Dates: Quoted standard periods that fall between the transaction date and the current spot value date. See value dates.
Premium: (1) The amount by which a forward rate exceeds a spot rate (2) The amount by which the market price of a bond exceeds its par value.(3) Options, the price a put or call buyer must pay to a put or call seller for an option contract. (4) The margin paid abo
Primary date: Issue date, date when payment is received by issuer.
Primary Reserves: Gold related monetary reserves, being gold, SDR, etc.
Prime Rate: (1) The rate from which lending rates by banks are calculated in the US. (2) The rate of discount of prime bank bills in the UK.
Principal: A dealer who buys or sells stock for his/her own account.
Profit Graph: A graphical representation of the profits to a given options strategy for different underlying asset prices
Profit Taking: The unwinding of a position to realise profits
Proxy Hedge: A term to describe when it is necessary to hedge against a currency where there is no market but it follows a major currency, the hedge is entered against the major currency.
Purchase fund: A type of bond whose issuer may retire up to specified amounts of the issue in the open market if the price remains below a certain level.
Put option: A put option confers the right but not the obligation to sell currencies, instruments or futures at the option exercise price within a predetermined time period.
Put call parity: The equilibrium relationship between premiums of call and put options of the same strike and expiry.
Pyramiding: The use of cash generated by positive variation margins on a futures position to increase the size of the position, each reinvestment in successively smaller increments

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