Dr. Harvey's Financial Glossary

Wednesday, March 17, 2010

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Paired shares: Stock of two companies under the same management that are sold as one unit with one certificate.
Pairoff: A buyback to offset and effectively liquidate a prior sale of securities.
Panic buying or selling: Rapid trading of stocks or bonds in high volume in anticipation of sharply rising or falling prices, usually after unexpected news is released.
Paper: Money market instruments, commercial paper, and other.
Paper dealer: A brokerage firm that buys and sells commercial paper to make a profit.
Paper gain (loss): Unrealized capital gain (loss) on securities held in a portfolio based on a comparison of current market price to original cost.
Par: Equal to the nominal or face value of a security. A bond selling at par is worth an amount equivalent to its original issue value or its value upon redemption at maturity-typically $1000/bond. , premium. See Also: Discount
Par bond: A bond trading at its face value.
Par value: Also called the maturity value or face value ; the amount that an issuer agrees to pay at the maturity date.
Par value of currency: The official exchange rate between two countries' currencies.
Parallel bonds: Fixed income instruments denominated in the respective currencies of the countries where they are placed.
Parallel loan: A process whereby two companies in different countries borrow each other's currency for a specific period of time, and repay the other's currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans.
Parallel shift in the yield curve: A shift in economic conditions in which the change in the interest rate on all maturities is the same number of basis points. In other words, if the three month treasury_bills increases 100 basis points (one %), then the 6-month, 1-year, 5-year, 10-year, 20-year, and 30-year rates all increase by 100 basis points as well. Related: Non-parallel shift in the yield curve.
Parameter: A model is a combination of variables, such as GDP growth, and coefficients which multiply these variables. The coefficients are often estimated from the data. The coefficients are called parameters.
Parent company: A company that controls subsidiaries through its ownership of voting stock, as well as runs its own business.
Pari passu: Refers to the equal ranking of securities.
Paris Bourse: National stock market of France.
Paris Interbank Offer Rate (PIBOR): The deposit rate on interbank transactions in the Eurocurrency market quoted in Paris.
Parity: For convertibles, level at which a convertible_security market price equals the aggregate value of the underlying common stock ; value/worth of the convertible bond considered only as an equity instrument (Conversion ratio times common price). See: Conversion value. For international parity, U.S.$ price of a foreign stock's last sale in an overseas market (Local currency stock price times forex rate times ADR ratio). For listed_security, condition whereby no party has floor priority, and matching thus occurs. For options parity, dollar amount by which an option is in the money. See: Intrinsic value.
Parity value: Related: Conversion value
Parking: Putting money into safe investments such as money market investments while deciding where to invest the money.
Parking violation: Often used in risk arbitrage. Illegal holding of stock by a third party, or the financing of such a stock, in which the third party's sole reason for holding the stock is to conceal ownership or control of a raider, thus sidestepping the Williams Act requirements of 5% holding limits. See: Rule 13d.
Part B prospectus: See: Statement of Additional Information
Partial: Used in the context of general equities. Trade whose size is only part of the total customer indication /order, usually made to avoid a compromise in price and also to get some business instead of losing the customers inquiry /order to a competitor.
Partial compensation: Incomplete payment for the delivery of goods to one party by buying back a certain amount of product from the same party.

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