Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
PRICE
52 week hi/low prices
• The highest and lowest prices for the stock in the last 52 weeks.
• The price at which a willing buyer and a willing unrelated seller would freely agree
to transact.
Ask price
• This is the price dealers are willing to sell securities at. This is typically higher than
the price dealers are willing to buy securities (called bid price). The difference
between the ask and bid prices is called the bid-ask spread and represents the profit
to the dealer for supplying immediate execution services.
• See Ask.
www.ftpall.com 2|Page
• The average of low prices for the last five years. This represents a possible low
price for a cyclical company (e.g. General Motors) whose stock price tends to
fluctuate in cycles over approximately a five year period.
• The average low Price-Earnings Ratio (PE) for the past five years. Used to
calculate a predicted low price.
• The average of the annual high and low Price-Earning Ratios for a particular time
period, typically calculated over the last five years.
• Gives the lessee the option to purchase the asset at a price below fair market value
when the lease expires.
Basis price
Bid price
• This is the quoted bid, or the highest price an investor is willing to pay to buy a
security. Practically speaking, this is the available price at which an investor can sell
www.ftpall.com 3|Page
Call price
• The price, specified at issuance, at which the issuer of a bond may retire part of the
bond at a specified call date.
• The stated price at which a bond may be repurchased, by use of a call feature,
prior to maturity.
• The repurchase price for a preferred share issue. Generally the stated value plus a
call premium.
Cash price
Clean price
• The CPI, as it is called, measures the prices of consumer goods and services and
is a measure of the pace of U.S. inflation. The U.S. Department of Labor publishes
the CPI very month.
• Abbreviated CPI. A commonly used measure of the increase (or decrease) in costs
of goods and services, published by the U.S. Bureau of Labor Statistics.
Conversion price
• The per-share price that is effectively paid for common shares as the result of
conversion of a convertible security.
Convertible price
• The contractually specified price per share at which a convertible security can be
converted into shares of common stock.
Delivery price
• The price fixed by the Clearing house at which deliveries on futures are in invoiced;
also the price at which the futures contract is settled when deliveries are made.
Dirty price
• Bond price including accrued interest, i.e., the price paid by the bond buyer.
Dollar price
• The strike price in an optional redemption provision plus the accrued interest to the
www.ftpall.com 5|Page
redemption date.
• Is the adjusted level of the option contract exercise price. A key adjustment is for
time value either paid or received.
• The slope of the capital market line (CML). Since the CML represents the return
offered to compensate for a perceived level of risk, each point on the line is a
• The price at which holders of warrants can purchase a specified number of shares
of common shares.
Exercise price
• The price at which the underlying future or options contract may be bought or sold.
• The price at which an option holder may buy or sell the underlying security. Also
called the strike price.
• Amount at which an asset would change hands between two parties, both having
knowledge of the relevant facts. Also referred to as market price.
Fair price
• The equilibrium price for futures contracts. Also called the theoretical futures price,
which equals the spot price continuously compounded at the cost of carry rate for
some time interval.
www.ftpall.com 6|Page
• The quoted newspaper price of a bond that does not include accrued interest. The
price paid by purchaser is the full price.
• Taking a position either long or short that does not involve spreading.
Full price
• Also called dirty price, the price of a bond including accrued interest. Related: flat
price.
Futures price
• The price at which the parties to a futures contract agree to transact on the
settlement date.
High price
• The highest (intraday) price of a stock over the past 52 weeks, adjusted for any
www.ftpall.com 7|Page
stock splits.
Implied price
Invoice price
• An economic rule stating that a given security must have the same price regardless
of the means by which one goes about creating that security. This implies that if the
payoff of a security can be synthetically created by a package of other securities, the
price of the package and the price of the security whose payoff it replicates must be
equal.
Limit price
Low price
• This is the day's lowest price of a security that has changed hands between a
buyer and a seller.
• Also called conversion parity price, the price that an investor effectively pays for
common stock by purchasing a convertible security and then exercising the
conversion option. This price is equal to the market price of the convertible security
divided by the conversion ratio.
• A measure of the extra return, or risk premium, that investors demand to bear risk.
The reward-to-risk ratio of the market portfolio.
Market prices
• The degree to which the prices of assets reflect the available marketplace
information. Marketplace price efficiency is sometimes estimated as the difficulty
faced by active management of earning a greater return than passive management
would, after adjusting for the risk associated with a strategy and the transactions
costs associated with implementing a strategy.
• The maximum amount the contract price can change, up or down, during one
trading session, as fixed by exchange rules in the contract specification. Related:
limit price.
Nominal price
www.ftpall.com 9|Page
• Price quotations on futures for a period in which no actual trading took place.
Offer price
• See: offer.
• See Ask.
Opening price
• The range of prices at which the first bids and offers were made or first
transactions were completed.
• Also called the option premium, the price paid by the buyer of the options contract
for the right to buy or sell a security at a specified price in the future.
Price appreciation
• A ratio that indicates whether the current price meets the target buy zone set in
your analysis. If the Price-Buy Zone Ratio is above 1, the stock is more costly than
your target price.
Price compression
• The limitation of the price appreciation potential for a callable bond in a declining
interest rate environment, based on the expectation that the bond will be redeemed
at the call price.
Price discovery
• Is the process which reflects the interaction of buyers and sellers, supply and
demand, and creates a record of transactions. The financial markets are classic
examples of this behavior. Securities and commodities quickly reflect the relative
www.ftpall.com 10 | P a g e
desirability of ownership.
• The process of determining the prices of the assets in the marketplace through the
interactions of buyers and sellers.
• A company with a large dividend yield will have substantial price support. A large
dividend yield is anything larger than the bank interest rate.
Price elasticities
• The percentage change in the quantity divided by the percentage change in the
price.
Price momentum
Price persistence
www.ftpall.com 11 | P a g e
Price risk
• The risk that the value of a security (or a portfolio) will decline in the future. Or, a
type of mortgage-pipeline risk created in the production segment when loan terms
are set for the borrower in advance of terms being set for secondary market sale. If
the general level of rates rises during the production cycle, the lender may have to
sell his originated loans at a discount.
• The risk that a debt security's price may change due to a rise or fall in the going
Price takers
• Individuals who respond to rates and prices by acting as though they have no
influence on them.
• Also known as Market-to-Book Ratio. Compares a stock's market value to its book
value, calculated by dividing the current price by Common Stockholders' Equity Per
Share (book value). A lower Price-To-Book Ratio might imply a stock is undervalued.
• Is computed by dividing the current share price by the book value per share. Book
value per share is determined by dividing assets less the liabilities (the book value)
by the number of shares outstanding.
• Price per share divided by Cash Flow Per Share. A measure of the market's
expectations regarding a firm's future financial health. Provides an indication of
relative value, similar to the Price-Earnings Ratio.
• Is the relationship between the current price of an equity and its earnings stream.
• Calculated by dividing a stock's current price by its revenues per share. This
• Abbreviated PVBP. Also called the dollar value of a basis point, a measure of the
change in the price of the bond if the required yield changes by one basis point.
Price/book ratio
• Compares a stock's market value to the value of total assets less total liabilities
(book value). Determined by dividing current stock price by common stockholder
equity per share (book value), adjusted for stock splits. Also called Market-to-Book.
• A technique to estimate the firm's share value; calculated by multiplying the firm's
expected earnings per share (EPS) by the average price/earnings (P/E) ratio.
per share for the P/E ratio are determined by dividing earnings for past 12 months by
the number of common shares outstanding. Higher multiple means investors have
higher expectations for future growth, and have bid up the stock's price.
• Measures the amount investors are willing to pay for each dollar of the firm's
earnings; the higher the P/E ratio, the greater the investor confidence in the firm.
Price/sales ratio
• Determined by dividing current stock price by revenue per share (adjusted for stock
splits). Revenue per share for the P/S ratio is determined by dividing revenue for
Priced out
• The market has already incorporated information, such as a low dividend, into the
price of a stock.
Prices
• Price of a share of common stock on the date shown. Highs and lows are based on
the highest and lowest intraday trading price.
Put price
• The price at which the asset will be sold if a put option is exercised. Also called the
strike or exercise price of a put option.
• The ratio of the market price per share of the acquiring firm paid to each dollar of
market price per share of the target firm.
• Are options which have the terms such as price reset to different levels. Often this
technique has been used to grant new and more favorable terms to the holder. For
example, in a declining market for a company's stock, some executives or
www.ftpall.com 14 | P a g e
employees may have their options effectively repriced to lower strikes. Critics claim
that this defeats the purpose of performance based options.
• A type of mortgage-pipeline risk that occurs when a lender commits to sell loans to
an investor at rates prevailing at application but sets the note rates when the
borrowers close. The lender is thus exposed to the risk of falling rates.
Settlement price
Spot price
• The current market price of the actual physical commodity. Also called cash price.
• At the time of issuance of a convertible security, the price the issuer effectively
grants the security holder to purchase the common stock, equal to the par value of
the convertible security divided by the conversion ratio.
• The lowest price (highest yield) accepted by the Treasury in an auction of a new
issue.
Strike price
• The stated price per share for which underlying stock may be purchased (in the
case of a call) or sold (in the case of a put) by the option holder upon exercise of the
option contract.
www.ftpall.com 15 | P a g e
• Is the stipulated price of an option at which level the underlying security, futures, or
commodity will be priced or valued upon exercise.
Striking price
• The price at which the holder of a call option can buy (or the holder of a put option
can sell) common shares at any time prior to the option's expiration date.
Subscription price
• Price that the existing shareholders are allowed to pay for a share of stock in a
rights offering.
• Is a price level where stocks, bonds, currencies, and commodities are expected to
receive buy orders. At its simplest application it is the bid side of a quote. On a more
complex level it refers to the lower boundary of some described trading range.
Transfer price
• Prices that subsidiaries charge each other for the goods and services traded
between them.
• The price at which one unit of a firm sells goods or services to another unit of the
same firm.
Under priced