Trading Glossary

Take a look at our list of the financial terms associated with trading and the markets.
Pandemic Emergency Purchase Programme(PEPP)

During the COVID-19 pandemic in2020, an asset purchase program executed by the European Central Bank is unconventional monetary policy. The aim of the policy is to restore economic activity and raise the inflation rate to the target of 2%.  


This price movement describes a huge wave of the market going up or down in a very short period of time, and the price trajectory is like a parabolic line. When the market comes out of such an event, it often attracts the attention of investors, but in such a situation, it is very difficult to guess the bottom, although investors know that the price in the market has come to an end. 

Parabolic SAR (Stop and Reverse)

A technical analysis indicator that shows changes in the momentum of a price movement, is often used to look for potential inflection points in a trend market. It can be used to find the top of the price and the bottom of the price, and generally as the basis for closing positions for trend trading. The Parabolic indicator adds one point to each candlestick, and if this point goes from above the candlestick to below the candlestick, it indicates that the downtrend may end, and vice versa. 

Passive Order

When investors do not want to actively pursue prices, they will take this way of placing orders. For example, when Microsoft's market buy and sell quote today is 287.15 / 287.16 and investors want to buy passively, the order price will be set below 287.15, such as 287.14, and vice versa, active price chasers will buy directly at 287.16. Of course, the passive order method has its advantages and disadvantages, the advantage is that it has a cost advantage, and the disadvantage is that when the price is gone and does not turn back, it is often in order to save a few cents and miss a large period of trend.  

PE Ratio

Directly reflect whether a company's stock price is reasonable, overvalued or undervalued. The P/E ratio is derived from dividing the stock price by EPS, the higher the P/E ratio, the more likely the stock price is overvalued; The lower the price-to-earnings ratio, the potential to be undervalued. You can directly compare two companies in the same industry to determine which one has the better opportunity to buy or sell. However, the P/E ratio also reflects the company's development potential, often with growth stocks having higher and volatile P/E ratios, while cyclical stocks are lower and stable. In addition, if the company is in the loss phase, the price-to-earnings ratio cannot be applied. 

Pending order

Issues an order to the system that automatically executes an order at a specified price location. When the price of the instrument reaches the target price, a pending order is triggered and is automatically bought or sold at that position at the set volume. Pending orders will remain in effect until executed or cancelled. There are generally two types of pending order tools, namely Stop and Limit. 

Personal Consumption Expenditure Price Index

PCE is personal consumption expenditure, which is a type of inflation data, similar to the CPI price index, reflecting the price level of a domestic package of personal consumption goods. Currently, only the United States releases this data. Some Fed officials believe that the PCE is more reflective of the real price level than the CPI, and uses this as a reference for the inflation rate.

Personal Consumption Expenditures

The amount of consumption expenditure of residents on goods and services reflects the consumption capacity of the people of a country or region. Personal consumption is the basis of economic activity, and personal consumption expenditure can directly reflect the economic situation of the country. 

Philadelphia Fed Index

The index reflects the attitude of 100 manufacturers in Philadelphia, USA, towards the current state of the economy and the pace for the next 6 months. If the data is less than 0, it indicates that the US economic growth rate is slowing down. Since this index is published earlier than the ISM index, it has a certain reference value when predicting the ISM index.  


International media disparagement of Europe's five weaker economies. Alphabetically in order of grape sub- and Italian, Irish, Greek and Spanish. The European debt crisis that began to spread in Greece in 2009 put these five countries on the cusp of the storm, and also showed that external investors are not optimistic about the European economy being affected by these five countries.  


It is most basic unit of measurement used to measure changes in exchange rates. In general, in most currency pairs, such as EUR/USD, GBP/USD... etc., the fourth digit of the decimal point is 1 pip, but if the quote currency is JPY, such as USD/JPY, then the second digit of the decimal point is 1 pip. Today's Forex brokers tend to display more decimal places, such as EUR/USD, which will be displayed to the fifth decimal place, which can also be called micro points. 

Pivot Points

It is a commonly used technical indicator, especially for investors who are reversed during the day, from which potential support and resistance levels can be found. The pivot point itself is calculated as (previous day's closing price + previous day's high + previous day's low)/3, and can be derived from three support points and three resistance points, which investors can use to make entry and exit decisions. 

Portfolio runoff

Refers to a portfolio of various types of assets, in which the total market value of the portfolio is reduced due to the maturity or sale of assets and are not reinvested or replaced.  

Position Fee

Refers to the fees or costs to be paid to hold a position, including interest on the use of leverage or storage and insurance costs for commodities. Inventory fees are very different for different products. In foreign exchange transactions, the common inventory fee refers to the difference between the deposit and loan interest rates between the two countries, which is the fee for holding positions on foreign exchange currency pairs. 


Generally refers to the amount of the futures price exceeding the spot price or the current value of the market. 

Price Action

Price action analysis is a technique used by investors to identify opportunities for trades. It involves analyzing the price of a stock relative to its previous movement. This helps investors determine if a stock is going up or down. The analysis is based on the assumption that a stock price tends to trend towards a certain level. If a stock trends towards a certain level, that suggests the stock is going to go up or down. 

Price Discrimination

Refers to the sale of the same goods provided by the same supplier to different groups of people at different prices, which is used to describe the seller's way of maximizing profitability. Since the cost of commodity production is fixed, maximizing the sales price for different groups of people is one of the keyways to increase revenue. Classic price discrimination is reflected in the cinema, where the prices of children's, adult and student tickets are different, and the ticket prices for different time periods are also different. Behind this is the supply and demand relationship between different groups of people and time, and movie tickets. 

Price Transparency

Describe how easy it is for everyone in the market to get the buy-sell price and related information. The higher the price transparency in a market, the less insider trading in that market and the disclosure of information quickly and clearly. In economics, it is often assumed that market participants have perfect information, so price transparency is complete. 

Prime Broker

Typically a large commercial bank, it provides a range of services to corporate funds such as hedge funds, including clearing, operational support, transaction settlement, and risk management. In the Forex market, the main brokers are providers of high liquidity, including those such as Bank of America, Barclays, Morgan Stanley and Deutsche Bank. Forex major brokers trade with small banks and brokers as their guarantors between banks, since brokerage firms and individual investors cannot complete large trades alone. After trading with clients, the main broker automatically completes hedging transactions between banks to prevent risk.  

Producer Price Index

Looking at prices from a seller's perspective, measuring the price changes in the field of production, reflecting the price of a basket of goods and services needed by enterprises to produce, including the price level of raw materials, semi-finished products and final products. PPI data are susceptible to commodities, especially changes in the prices of materials such as base metals (iron ore or copper), wood and crude oil.

Proof of Stake

It is a consensus mechanism of the blockchain, mainly hoping to replace proof-of-work (PoW), thereby reducing the large number of calculations for mining in order to generate new blocks and reducing the damage to the environment.  

Proof of Work

It is a consensus mechanism of blockchain. As the name suggests, the work is used to prove the amount of work done, bitcoin uses this consensus mechanism to be the most representative. Its consensus protocol is mainly composed of two parts: proof of work and the longest chain mechanism.  

Proxy mode 

Refers to the mode of executing trading orders for the customer's agent, placing the customer's order on the market or helping the customer find a counterparty to match the transaction. Profits are generally made through fees. 

Purchasing Managers' Index

Every month, through the survey of purchasing managers of 5,000 enterprises, the index obtained involves 11 questions such as production volume, product ordering, export ordering, existing orders, finished product inventory, purchase volume, import and purchase price, main material inventory, production and operation personnel and supplier delivery time, etc., and the results are relatively more subjective, reflecting the trend of economic changes, and is an important data in the leading indicators. The PMI index is divided into manufacturing PMI, services (or non-manufacturing) PMI, and sum PMI. Generally, 50% is taken as the boom-bust line of PMI, higher than 50% indicates that the economic expectations are good, and below 50% indicates that the economic outlook is not good.  

Purchasing Power Parity

PPPs derive from the "one-valence law", which states that the price of a commodity should be the same in all countries. The purchasing power parity theory derived from the "one-price law" describes that under the premise of the uniform price of commodities in various countries, the exchange rate of a currency pair should match the purchasing power of the currency in the country. If the inflation rate in country A is higher than in country B, then the currency of country A will depreciate relatively, and the currency of country B will appreciate relatively. The parity theory system contains a large number of assumptions, and attention needs to be paid to the use environment.