Online Forex Trading Words | Forex Dictionary | Definition | Forex Alphabet & Terminology

P

Paper Profit or Loss

The profit or loss that would be realized if open contracts were liquidated as of a certain time or at a certain price.

Payment for Order Flow

As a way to attract orders from brokers, some exchanges or market-makers will pay your broker's firm for routing your order to them – perhaps a penny or more per share. This is called payment for order flow. Payment for order flow is one of the ways your broker's firm can make money from executing your trade. The firm can also make money by internalizing your order.
Upon opening a new account and on an annual basis, firms must inform their customers in writing whether they receive payment for order flow and, if they do, a detailed description of the type of the payments. Firms must also disclose on trade confirmations whether they receive payment for order flow and that customers investors can make a written request to find out the source and type of the payment as to that particular transaction.

Pending Orders report

The Pending Orders report will show all the pending orders that the client has entered over the user specified dates whether the Pending Order is executed or not. Any Pending Order that is cancelled by the client will still be displayed, giving the client a full audit trail of the orders.

Pips

The smallest unit of price for any foreign currency. Digits added to or subtracted from the fourth decimal place, i.e. 0.0001. Also called Points.

Point & Figure Chart

A method of charting that uses prices to form patterns of movement without regard to time. It defines a price trend as a continued movement in one direction until a reversal of a predetermined criterion is met. The chart consists of columns of X's which represent rising prices and O's that reflect falling prices, arranged on a square grid.

Political Risk

Exposure to changes in governmental policy which will have an adverse effect on an investor's position.

Ponzi Scheme

Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture, as the investors expected, and gives investors the impression that a legitimate profit-making business or investment opportunity exists, where in fact it is a mere fiction.

Position

The netted total commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short ( more currency sold than bought).

Position Accountability

A rule adopted by an exchange requiring persons holding a certain number of outstanding contracts to report the nature of the position, trading strategy, and hedging information of the position to the exchange, upon request of the exchange.

Premium

In the currency markets, describes the amount by which the forward or futures price exceed the spot price.

Price Transparency

Describes quotes to which every market participant has equal access.

Principal

A dealer who buys or sells stock for his/her own account.

Profit /Loss or "P/L" or Gain/Loss

The actual "realized" gain or loss resulting fromtrading activities on Closed Positions, plus the theoretical "unrealized" gain or loss on Open Positions that have been Mark-to-Market.

Profit Taking

The unwinding of a position to realize a profit.