Growth Investing Stock Market Glossary
From A for ‘Asset’ to Z for the ‘Zero-Coupon Yield Curve’ — your comprehensive guide to everything that matters in the markets.
P/E ratio (Price-Earnings Ratio)
The relationship between stock price and earnings per share as a classic multiple.
P&L (Profit And Loss)
Short designation for profit and loss statement as well as trading result of a portfolio.
P2P credit (Peer-to-Peer)
Lending between individuals via platforms without traditional bank intermediation.
PaaS (Platform As A Service)
Providing a development and runtime environment as a service, relevant for tech evaluations.
Paasche-Index
Price index with current quantities as weights for measuring inflation.
PAC (Protective Advance Clause)
Contract clause in securitizations to protect senior tranche creditors through priority payments.
Pair Trading
Market-neutral strategy with long/short on correlated securities to exploit relative mispricings.
Par Swap Rate
Swap fixed rate, where the fair value of the swap at the beginning is zero.
Par Value (Pariwert)
Face value of a security as the contractual reference quantity.
Par value share
Stock with fixed nominal value instead of share certificate.
Pari Passu
Equal treatment of creditors without preferential treatment.
Parity price (convertible bond)
Course, where the value of the convertible bond corresponds to the converted stock value.
Partial execution
Partial order execution, when the full volume is not immediately available.
Partial profit taking
Realization of a portion of the book profits to reduce risk.
Participation certificate
A security that represents a stake with specific profit or loss rights, often without voting rights.
Participation certificate
Form of participation with profit/loss sharing without voting rights, often with special design.
Pass-Through obligation
Obligation to pass on revenues or benefits to investors.
Payback Period (Amortization period)
Time period until an investment covers its capital outlay through returns.
Payment Agent
Issuer's settlement agent for coupons, redemptions, and corporate actions.
Payment default
Exceeding the payment deadline with possible interest and reminder consequences.
Payment For Order Flow (PFOF)
Remuneration to brokers for forwarding customer orders to specific trading venues.
Payment term
Agreed deadline between performance and payment for deliveries or transactions.
Payment transactions
Totality of processes for transferring monetary amounts between economic entities.
Payment-In-Kind (PIK)
Interest or coupon payment in additional capital instead of in cash.
Payout Ratio (Ausschüttungsquote)
Share of the distributed dividend in earnings per share.
PEG-Ratio
The relationship between P/E ratio and earnings growth as a valuation measure for growth stocks.
PEPP
Pandemic emergency purchase program of the Eurosystem for securities to stabilize financial markets.
Performance
Change in the value of an asset over a period of time.
Performance Attribution
Decomposition of portfolio return into effects from allocation, security selection, and interaction.
Performance Fee
Success-based compensation of a fund above a defined hurdle and high-water mark.
Performance Measurement
Systematic determination and disclosure of returns according to recognized standards.
Perpetual Bond
Bond without maturity with theoretically perpetual coupons.
Perpetuity (Ewige Rente)
Constant cash flow without maturity as a valuation case.
Pfandbrief
Bond issued by German issuers with a high security profile secured by cover pool assets.
PIBOR/PIBOR successor
Historical French interbank interest rate and its replacement by EURIBOR or €STR-based rates.
PIK-Toggle
Clause that allows the issuer to choose between cash and PIK payment.
PIM (Position In Market)
Short term for the position of a position relative to market and liquidity.
PIP (Percentage In Point)
Smallest common price change unit in foreign exchange trading.
Pitchbook
Presentation material from investment banks for client acquisition and transaction structuring.
Pivot point
Technical course level for orientation of supports, resistances, and intraday setups.
Plain-Vanilla
Designation for simple, standardized financial instruments without special features.
Pledge right
Mortgage right on assets in favor of a creditor.
PME (Public Market Equivalent)
Key figure for comparing private equity returns with public markets.
PMI (Post-Merger-Integration)
Integration phase after an acquisition to realize planned synergies.
Point-and-Figure-Chart
Chart method that discretely maps price movements in boxes without a time axis.
Poison Pill
Defense measure against hostile takeovers through dilution or special rights.
Ponzi scheme
Ponzi scheme, where payouts are financed from deposits of new participants.
Portable Alpha
Alpha source, which is set up independently of beta exposure via derivatives.
Portfolio
Compilation of portfolios with defined return/risk profile.
Portfolio Construction
Translation of the strategy into specific weights, limits, and risk budgets.
Portfolio Insurance
Hedging a portfolio's value floor using options or futures.
Portfolio Optimization
Mathematical determination of efficient weights for goal achievement.
Portfolio overlap (Overlap)
Share of identical titles between two portfolios.
Portfolio theory (MPT)
Modern theory on diversification and efficient portfolios according to Markowitz.
Portfolio Turnover
Annual turnover rate of the portfolio from purchases and sales.
Portfolio Value at Risk
Value-at-Risk of a portfolio for a chosen confidence level and holding period.
Portfolio volatility
Fluctuation intensity of portfolio returns over time.
Portfolio-Beta
Weighed beta of all portfolio positions compared to the benchmark.
Position Limit
Upper limit of permissible contract or position sizes per market participant.
Position Sizing
Setting the position size based on risk, volatility, or confidence.
Position Trading
Multi-day to multi-week holding of positions to take advantage of larger trends.
Positive correlation
Concurrency of two variables with tendentially the same sign direction.
Post-Money Valuation
Enterprise value after a financing round including the newly injected capital.
Post-Trade Transparency
Publication of completed transactions after execution.
Pre-IPO
Financing or secondary transactions immediately before an initial public offering.
Pre-Market
Trading phase before the official market opening.
Pre-Money Valuation
Company value before a new financing round.
Pre-trade transparency
Transparency of the available quotes and order books before execution.
Preferred dividend
Preferred or increased dividend that is due to preferred shareholders.
Preferred Return
Preferred minimum interest rate for investors before profit sharing with the manager.
Preferred Stock
Stock with preferential rights such as increased dividend and usually without voting rights.
Preliminary figures
Preliminary, as yet unchecked business figures before the complete report.
Prepayment penalty
Compensation for lost interest in case of early loan repayment.
Present Value
Present value of future payments after discounting.
Price
Price of a security in trading at a specific point in time.
Price Action
Analyze pure price movements and patterns without indicators.
Price ceiling
Regulatorily or contractually defined maximum price limit.
Price development
Temporal course of a price including fluctuations and trends.
Price Discovery (Price Discovery)
Market process of price formation from supply, demand, and information.
Price discrimination
Different pricing for identical goods based on segment, quantity, or timing.
Price floor
Regulatorily or contractually defined minimum price limit.
Price gap
Price range without sales between two periods.
Price Impact
Price change as a result of own order execution.
Price Return
Measurement of returns exclusively based on price changes without distributions.
Price risk
Risk of loss due to unfavorable price movements of an asset.
Price sensitivity
Response of demand or price to changes in relevant influencing factors.
Price target
Analyst assessment of the future price level of a security.
Price to Cash Flow Ratio
Ratio of stock price to cash flow per share as a robust valuation alternative.
Price-To-Book (P/B)
Evaluation metric price to book value per share as an alias for P/B ratio.
Price-To-Cash-Flow (P/CF)
Evaluation metric price to cash flow per share as an alias for P/CF.
Price-To-Free-Cash-Flow (P/FCF)
Evaluation metric: Price to free cash flow per share.
Price-To-Sales (P/S)
Evaluation metric price to sales per share as an alias for P/S ratio.
Price-weighted index
Index, where the weighting is proportional to the absolute price level.
Primary Dealer
Financial institution with direct access to government bond auctions and market-making obligations.
Primary exchange
Stock exchange with reference function for price formation and liquidity of a market.
Primary market
Market for the initial issuance and placement of new securities.
Prime Brokerage
Service package for professional traders with financing, lending, and data.
Prime Rate
Reference interest rate for prime corporate loans in the US banking system.
Principal (capital sum)
Original or outstanding principal amount of a debt position.
Principal-Agent Problem
Conflict of interest between principals and agents in the presence of asymmetric information.
Private Debt
Non-publicly traded debt financing by companies.
Private Equity
Equity capital in non-listed companies.
Private Placement
Offer of securities to a limited group of investors without a public prospectus.
Pro-cyclical
Behavior or policies that amplify existing economic fluctuations.
Probability Of Default (PD)
Probability of default of a debtor within a period of time.
Producer Price Index (PPI)
Producer Price Index as an early indicator for inflation.
Product pipeline
Sequence of planned product or active ingredient launches as growth drivers.
Profit and loss transfer agreement
Contract in corporate law for the transfer of a company's profits to the parent company.
Profit estimation
Prognosis of future company profits by analysts or management.
Profit Factor
Ratio of gross profits to gross losses of a trading strategy.
Profit Margin
Profit margin of a company based on revenue or cost basis.
Profit reserves
Accumulated, undistributed profits in the equity reserves.
Profit Taking
Realization of book profits through partial or full sale.
Profit warning
### Ad-hoc announcement about expected worse results than previously anticipated.
Profit-taking
Realization of book profits through partial or full sale of a position.
Project Finance
Financing of large projects with project cash flows as the primary source of repayment.
Proprietary Trading
Trading on own account of an institution without customer order.
Prospect Theory
Behavioral economic theory with utility function, reference points, and loss aversion.
Prospectus
Legally required document containing essential information about a securities offering.
Prospectus liability
Liability for incorrect or incomplete prospectus information vis-à-vis investors.
Prospectus requirement
Legal obligation to publish a prospectus for public offerings.
Provision
Passive items for uncertain obligations regarding amount or due date.
Proxy Advisory
Voting rights advisory for institutional investors at annual general meetings.
Proxy Fight
Voting battle for control or decisions in a company.
Proxy Statement
Document for exercising voting rights with information on resolutions and remuneration.
PSA speed (Prepayment Speed)
Measure of prepayment speeds in mortgage pools relative to a standard path.
Pump-and-Dump
Manipulation of prices by artificially buying up and then selling off a security.
Purchase price
Average acquisition cost of a position including expenses.
Purchasing Managers' Index (PMI)
Early indicator for the economic situation based on corporate surveys.
Put Spread
Options strategy involving buying and selling puts with different strikes.
Put-Call Ratio
Ratio of traded put to call options as a sentiment indicator.
Put-Call-Parity
Relationship between prices of put and call, spot and bond for the same strike and expiration.
Puttable Bond
Bond with investor's right to early redemption at a predetermined price.
PVBP (Price Value Of A Basis Point)
Present value change per basis point interest rate change as an alias for DV01.
PVGO (Present Value Of Growth Opportunities)
Present value of a company's future growth opportunities.
Pyramiding
Position expansion in the direction of the trend by buying more on confirmation signals.
