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Trading terms glossary
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Price-to-earnings ratio (P/E)
A company’s P/E ratio is calculated by dividing the company’s market value per share by its earnings per share, and is a method for measuring a company’s value.
Learn more about P/E ratios
Learn more about P/E red flags

Parent company
Parent company refers to the entity which has a majority or controlling interest in another company, giving it the right to control the subsidiary’s operations.

Pip
A ‘pip’ is a measurement of movement in Forex trading; it is the smallest amount that a currency can change.

Pip value
The pip value is the value attributed to a single pip move in a Forex (FX) trade.

Purchasing managers index (PMI)
PMI is an indicator of the health of a particular sector within an economy.
Learn more about PMI

Portfolio (Investment portfolio)
Portfolio refers to the collection of assets held by a trader or trading entity, this can include shares, commodities, bonds, derivatives etc.

Position
“Position” refers to an open trade, held by a trader, that is able to incur a profit or loss. Once a trade has been closer or canceled, the trader no longer holds that position. The actual profit or loss of a trade is not realised until the position has been closed.

Position Sizing
Learn more about Position Sizing.

Power of attorney (POA)
Power of attorney gives another person or entity legal authority to act on your behalf. In trading, this means access to financial resources, trading accounts, the ability to open or close trading positions etc. If POA is given to a legal entity, representatives within that entity authorized to act on your behalf will be listed specifically.

Profit and loss (P&L)
A profit and loss statement is a financial report summarizing a company’s gross revenue, expenses and profit. It provides traders and investors with a snapshot of how well a company is operating and it’s potential to generate profit.

Pullback
A pullback is a temporary dip an asset’s otherwise current trend. Not to be confused with a reversal, which is a longer term switch in an assets (previously) trending direction.

Put Option
A ‘Put Options’ is a contract giving a trader the right, but not the obligation, to sell a specific amount of an underlying contract, at a specific price, at a specific time.