Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: P

POINT AND FIGURE CHART

A chart showing movement of investments without considering time. Xs and Os show up and down movement and if the trend shifts a new column is added. The chart is made to

POSITIVE WORKING CAPITAL

When a companies assets exceed its liabilities. There is plenty of liquidity to cover obligatins. Refer to negative working capital.

PREPAYMENT MODEL

The way banks calculate the speed a mortgage will be repaid. A common way is the constant repayment rate model.

PROXY CONTEST

A take over method where an investor presuades the board to vote against the director and create a new board in their favor. This takes a long time and can be prevented

PUT ON THE MINIMUM

An option where the buyer is paid the difference between the strike price and the lowest price. Refer to option on the maximum/minimum, lookback option, and call on the maximum.

PENNY JUMPING

When a manager only fills offers on one side keeping the rest until they see how the market is going to behave. If things go well all are let out but if

POINT BARRIER OPTION

A barrier option whose barrier kicks in at only one time. This time is usually maturity. AKA european barrier option. Refer to partial barrier option.

POSITIVE YIELD CURVE

When short term interest rates are lower than long term rates. This indicates normal market yield. AKA upward sloping yield curve. Refer to kinked and negative yield curve.

PUT ON THE WORST OF NASSETS

An option where the buyer is paid the difference between the strike price and the worse performing asset in a portfolio. Refer to call on the best of nassets, call on the

PENNY STOCK

Stocks sold at less than one dollar. They are sold by companies in financial trouble, new companies, and ones removed from a larger market. The sales are recorded on a pink sheet.

POISON PILL

A takeover prevention strategy that makes stock look bad to the interested buyer. Refer to chewable, flipin, and flipover pill.

POT

A percent of new issue held by the manager to offer to the institutions investors.

PREPETITION PHASE

The time a company is preparing to file for bankruptcy. Directors try to preserve value as the creditors will paid first.

PUFFERY

A questionable practice of downplaying negative business traits and overemphasizing the positive ones.

PUT OPTION

A contract allowing the buyer to sell an asset back at strike price. This occurs at or before the maturity date. They are written based on a broad range of commodity and

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