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| Paid-Up Capital | is defined as the amount of money that shareholders have paid for authorized stock issued by a corporation. |
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| PE price to earnings ratio | Is derived by dividing a stocks market cap by its after tax earnings. It is generally believed that a high P/E is correlated with an overvalued stock. Benjamin Graham used P/E as one of the indicators to purchase stock at a discount. *See value investing. |
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| PEG | Is derived by dividing a company's p/e ratio by its year over year growth rate of earnings. It is believed that the lower the PEG the better, since the purchaser would be spending less money for more growth than a stock with a higher PEG. |
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| Penny Stock | Is characterized by stocks that are less than one dollar per share, often they have a small market capitalization and a short history of operation. |
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| Preferred Shares | A stock that gives certain privileges that common shareholders do not receive. Dividends must be paid to preferred shareholders before common shareholders. And in a bankruptcy or liquidation scenario preferred shareholders would receive compensation before common shareholders. However preferred shareholders do not get the same voting rights that common shareholders do. Moreover to be prudent it is important to investigate the particular preferred shares that you purchase, because they can vary from company to company regarding dividends, voting rights etc. |
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| Purchasing Power |
The amount of goods and services that can be purchased with a specified amount of money. |
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| Put Option | An option that gives the owner of the contract the authority to sell, to the writer of the contract, a predetermined amount of a security for a fixed period of time and for a predetermined price.
This is similar to short selling because the investor hopes that the security will fall in price. Why, you ask? If the price of the security falls and the investor has agreed to sell the security for more than it is trading at, then he can buy the security for a cheap price and sell it for the predetermined price. |
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