P

Parabolic system A stop-loss technical system, based on price and time.

The system was devised to supplement the inadvertent gaps of the

other trend-following systems. Although not technically an oscillator,

the parabolic system can be used with the oscillators. SAR stands for

stop-and-reverse. The stop moves daily in the direction of the new

trend. The built-in acceleration factor pushes the SAR to catch up

with the currency price. If the new trend fails, the SAR signal will be

generated. The name of the system is derived from its parabolic

shape, which follows the price gyrations. It is represented by a

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 138

dotted line. When the parabola is placed under the price, it suggests

a long position. Conversely, a price above the parabola indicates a

short position.

Pennants A continuation formation that resembles the outline of a

pennant. It consists of a brief consolidation period within a solid and

steep upward trend or downward trend. The consolidation itself

tends to be sloped in the opposite direction from the slope of the

original trend, or simply flat. The consolidation is bordered by a

support line and a resistance line, which converge, creating a

triangle. The previous sharp trend is known as the pennant pole.

When the currency resumes its original trend by breaking out of the

consolidation, the price objective is the total length of the pole,

measured from the breakout price level.

Personal Income An economic indicator that consists of the income

received by individuals, nonprofit institutions, and private trust funds.

Some of the components of this indicator are wages and salaries,

rental income, dividends, interest earnings, and transfer payments

(Social Security, state unemployment insurance, and veteran's

benefits).

Philadelphia Stock Exchange (PHLX) The oldest U.S. securities exchange,

it offers currency futures and options on currency futures.

Point-and-figure chart A type of chart that plots price activity without

regard to time. When the currency moves up, the fluctuations are

marked with X's. The moves on the downside are plotted with O's.

The direction on the chart only changes if the currency reverses by a

certain number of pips.

Premium The price of the option paid by the buyer to the seller.

Premium forward spread Forward price that is added to a spot price

to calculate a forward price. It reflects the fact that the foreign

interest rate is higher than the U.S. interest rate for that particular

period.

Prime rate The rate that commercial banks charge customers, which is

based on the discount rate.

Producer Price Index An economic indicator that gauges the average

changes in prices received by domestic producers for their output at

all stages of processing.

Purchasing power parity (PPP) Model of exchange rate

determination stating that the price of a good in one country should

equal the price of the same good in another country, exchanged at

the current rate (the law of one price).

Put-call-forward exchange parity (PCFP) theory A relationship between

a call option and a put option established through the forward

market. The theory holds that the option of buying the domestic

currency with a foreign currency at a certain price X is equivalent to

the option of selling the foreign currency with the domestic currency

at the same price X. Therefore, the call option in the domestic

currency becomes the put option in the other, and vice versa.

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 139

Put ratio backspread A compound option strategy that consists of

short puts with a higher strike price and more long puts with a lower

strike price. The profit is twofold. The maximum upside profit

potential consists of the total premium received. The downside profit

potential is unlimited. The maximum loss potential occurs when the

currency price reaches the lower strike price at expiration.

Parabolic system A stop-loss technical system, based on price and time.

The system was devised to supplement the inadvertent gaps of the

other trend-following systems. Although not technically an oscillator,

the parabolic system can be used with the oscillators. SAR stands for

stop-and-reverse. The stop moves daily in the direction of the new

trend. The built-in acceleration factor pushes the SAR to catch up

with the currency price. If the new trend fails, the SAR signal will be

generated. The name of the system is derived from its parabolic

shape, which follows the price gyrations. It is represented by a

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 138

dotted line. When the parabola is placed under the price, it suggests

a long position. Conversely, a price above the parabola indicates a

short position.

Pennants A continuation formation that resembles the outline of a

pennant. It consists of a brief consolidation period within a solid and

steep upward trend or downward trend. The consolidation itself

tends to be sloped in the opposite direction from the slope of the

original trend, or simply flat. The consolidation is bordered by a

support line and a resistance line, which converge, creating a

triangle. The previous sharp trend is known as the pennant pole.

When the currency resumes its original trend by breaking out of the

consolidation, the price objective is the total length of the pole,

measured from the breakout price level.

Personal Income An economic indicator that consists of the income

received by individuals, nonprofit institutions, and private trust funds.

Some of the components of this indicator are wages and salaries,

rental income, dividends, interest earnings, and transfer payments

(Social Security, state unemployment insurance, and veteran's

benefits).

Philadelphia Stock Exchange (PHLX) The oldest U.S. securities exchange,

it offers currency futures and options on currency futures.

Point-and-figure chart A type of chart that plots price activity without

regard to time. When the currency moves up, the fluctuations are

marked with X's. The moves on the downside are plotted with O's.

The direction on the chart only changes if the currency reverses by a

certain number of pips.

Premium The price of the option paid by the buyer to the seller.

Premium forward spread Forward price that is added to a spot price

to calculate a forward price. It reflects the fact that the foreign

interest rate is higher than the U.S. interest rate for that particular

period.

Prime rate The rate that commercial banks charge customers, which is

based on the discount rate.

Producer Price Index An economic indicator that gauges the average

changes in prices received by domestic producers for their output at

all stages of processing.

Purchasing power parity (PPP) Model of exchange rate

determination stating that the price of a good in one country should

equal the price of the same good in another country, exchanged at

the current rate (the law of one price).

Put-call-forward exchange parity (PCFP) theory A relationship between

a call option and a put option established through the forward

market. The theory holds that the option of buying the domestic

currency with a foreign currency at a certain price X is equivalent to

the option of selling the foreign currency with the domestic currency

at the same price X. Therefore, the call option in the domestic

currency becomes the put option in the other, and vice versa.

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 139

Put ratio backspread A compound option strategy that consists of

short puts with a higher strike price and more long puts with a lower

strike price. The profit is twofold. The maximum upside profit

potential consists of the total premium received. The downside profit

potential is unlimited. The maximum loss potential occurs when the

currency price reaches the lower strike price at expiration.