Glossary

P

• Panic Selling It refers to the market conditions when all investors take fright and start selling due to sudden unfavorable news or rumours, or a Random Walk by shares downwards.
• Passive portfolio management This investment style is exactly opposite of the active portfolio management. In this style the portfolio manager assumes that markets are efficient and all information is already analysed and reflected in the prices of share and there is no scope of finding any undervalued stock.
• Payback period The period of time required for the cumulative expected cash inflow from an investment project to equal the initial cash outflow.
• PDS Public Distribution System.
• Pool Account Member pool account is a Demat account opened by Trading Members and / or Clearing Members of commodity exchanges. This account is opened to facilitate the pay-in and payout process .
• Portfolio It refers to the list of financial assets that are held by an investor. The idea of a portfolio is that investor should invest in a diversified selection of investments.
• Preferred stock A type of stock that promises a fixed dividend but at the discretion of the board of directors. It has preference over common stock in the payment of dividends & claims on assets at the time of liquidation.
• Premium The sum of money that an option buyer pays for the right to acquire the option, and that an option seller receives for incurring the obligation the option entails. Option premiums are expressed as a cost in Rs.per share. The total cost of an option contract for 1,00 shares (referred to as a 'lot') would therefore be 1,00times the premium, e.g. one contract with a premium of Rs.14 would cost Rs.1400 (100x14).
• Present Value The current value of a future amount of money or a series of payments, evaluated at a given interest rate.
• Price / earning ratio The market price per share of a firm's common stock dividend by the most recent 12 months of earning per share.