Dictionary


Primitive Security, Derivative Security
A primitive security is an instrument such as a stock or bond for which payments depend only on the financial status of its issuer. A derivative security is created from the set of primitive securities in an attempt to yield returns that depend on factors beyond the characteristics of the issuer and that may be related to prices of other assets.
Principal
The person for whom a broker executes an order, or dealers buying or selling for their own accounts. The term principal may also refer to a person's capital or to the face amount of a bond.
Profit Taking
Selling tradables that have appreciated since initial purchase in order to take advantage of the appreciation.
Program Тrading
Trades based on signals from computer programs, usually entered directly from the trader's computer to the market's computer system.
Proxy
The process by which shareholders who cannot attend a fund's annual meeting vote by mail.