Par value is the face value, or named value, of a stock or bond. With stocks, the par value, which is frequently set at $1, is used as an accounting device but has no relationship to the actual market value of the stock.

With bonds, par value, usually $1,000, is the amount you pay to purchase at issue and the amount you receive when the bond is redeemed at maturity. Par is also the basis on which the interest you earn on a bond is figured. For example, if you are earning 6% annual interest on a bond with a par value of $1,000, that means you receive 6% of $1,000, or $60.

While the par value of a bond typically remains constant for its term, its market value does not. That is, a bond may trade at a premium, or more than par, or at a discount, which is less than par, in the secondary market. The market price is based on changes in the interest rate, the bond's rating, or other factors

Parabolic SAR, which stands for "Parabolic Stop and Reversal," is a technical indicator used only during trending markets to generate buy and sell signals.

In general, buy signals are generated when the indicator, which appears on a price chart in the form of small dotted lines, moves below the price. Sell signals are typically generated when the indicator moves above the price.

Parabolic SAR is also used as a trailing stop. A trailing stop is a stop-loss level meant to protect your profits if the price drops while you're holding a long position on the stock, and limit losses if the price begins to rise if you've taken a short position.

For example, if you own stock, you'd put a trailing stop below the current price that would move upward if the price continued to climb. However, if the price begins to fall and reaches the trailing stop, a stop-loss would be triggered and your shares would be sold. This helps protect you from further losses.

A market strategy that involves selecting a benchmark index to assure investment performance is the same as the underlying index. Passive investing assures that an investor will not under perform (or outperform) a market index. Passive management is opposite of active management.

Date on which a declared stock dividend or a bond interest payment is scheduled to be paid.

Status indicating the order has been sent, but not filled by a fixed income trader.

Stocks that trade for less than $1 a share are often described as penny stocks. Penny stocks change hands over-the-counter (OTC) and tend to be extremely volatile. Their prices may spike up one day and drop dramatically the next.

A reduction of portfolio performance due to various factors. An example of performance drag occurs when gains within a portfolio are offset by various expenses, such as management fees, transaction costs, research costs, etc. These expenses create a drag or negative effect on the portfolio's performance.

An OTC Bulletin Board stock that is not quoted in the daily newspaper listings of the NASDAQ. "Pink Sheets" is a daily publication of the National Quotation Bureau that details the bid and ask prices of these stocks.

In technical analysis, a pivot point is the level at which prices break through a prior resistance level, or the highest price data points on a price chart. Pivot Points may also be used to signal price reversals.

If a current close is lower than the low on the day with the highest high during an uptrend, it could be a sign that prices will begin to decline. If the current close is higher than the high on the day with the lowest low during a downtrend, it might mean prices will begin to rise. Pivot points are typically useful only during strong trends as they may trigger ineffective signals during weak trends.

The portfolio turnover relates to the frequency with which a money manager is buying and selling securities within a fund portfolio. High turnover translates into higher trading costs, which fund investors must pay. Low portfolio turnover is better because it lessens the impact of trading and tax related costs.

Class of capital stock that pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock usually does not carry voting rights.

1. Amount by which a bond sells above its face (par) value.

2. The cash price that the option buyer pays to the option writer.

The price premium or difference between a fund's net asset value (NAV) and the actual value of its portfolio holdings. Some closed end funds and ETFs may trade at a premium to NAV.

Button available on Scottrade's Order Entry page for all fixed income securities which allows you to view the order prior to submitting it to a broker.

In technical analysis, the Price Rate-of-Change (Price ROC) is used to measure the rate of change of a security's closing prices. This helps point out trends and their strength. It's a centered oscillator, which means it fluctuates above and below a center, or zero, line.

High and low readings may indicate that up- or down-trends may be occurring. And, for some analysts, moves above the zero line could signal an opportunity to buy, and moves below the zero line could indicate a time to sell. This is because prices are expected to rise when Price ROC crosses the zero line from below, and they are expected to decline when it crosses the zero line from above.

Price ROC may also be used to show whether a security is overbought or oversold. Price ROC is the same as the Momentum indicator except that Price ROC is expressed as a percent and Momentum is expressed as a ratio.

The price-to-earnings ratio (P/E) is the relationship between a company's earnings and its share price, and is calculated by dividing the current price per share by the earnings per share.

A stock's P/E, also known as its multiple, gives you a sense of what you are paying for a stock in relation to its earning power. For example, a stock with a P/E of 30 is trading at a price 30 times higher than its earnings, while one with a P/E of 15 is trading at 15 times its earnings. If earnings falter, there is usually a sell-off, which drives the price down. But if the company is successful, the share price and the P/E can climb even higher.

Similarly, a low P/E can be the sign of an undervalued company whose price hasn't caught up with its earnings potential. Conversely, a low P/E can be a clue that the market considers the company a poor investment risk.

Stocks with higher P/Es are typical of companies that are expected to grow rapidly in value. They're often more volatile than stocks with lower P/Es because it can be more difficult for the company's earnings to satisfy investor expectations.

The P/E can be calculated two ways. A trailing P/E, the figure reported in newspaper stock tables, uses earnings for the last four quarters. A forward P/E generally uses earnings for the past two quarters and an analyst's projection for the coming two.

Basic amount invested, exclusive of earnings.

Proration occurs when available cash or shares are not sufficient to fulfill the offer tendered by shareholders during a corporate action. Therefore, a portion of cash and shares are utilized for each offer tendered.

Required by securities laws and issued by mutual fund companies and ETFs, the prospectus is a legal document that discloses the investment objectives of the fund, operating history, fund management, management fees, portfolio holdings, and other related financial data. Brokers are required to give a prospectus to investors before they invest.

The prospectus gross expense ratio figure represents the percentage of fund assets used to pay for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund excluding brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio. The expense ratio for fund of funds is the aggregate expense ratio as defined as the sum of the wrap or sponsor fees plus the estimated weighted average of the underlying fund fees. Often referred to as the Annual Operating Expense, the Prospectus Gross Expense Ratio is collected annually from a fund's prospectus.

The prospectus net expense ratio figure represents the percentage of fund assets, net of reimbursements, used to pay for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund excluding brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio. The expense ratio for fund of funds is the aggregate expense ratio as defined as the sum of the wrap or sponsor fees plus the estimated weighted average of the underlying fund fees. Net reimbursements, the Prospectus Net Expense Ratio is collected annually from a fund's prospectus.

Proxy Voting Notification is a selection made by you as to how you prefer to receive proxy information sent to you. You may choose either U.S. mail or e-mail. The notification method may be changed at any time, but you must allow up to 45 days for a change to take effect.

To change your proxy notification method, click on the My Account tab, click My Information & Preferences, then click Account Preferences. From this page there is a drop-down box that allows you to select your proxy delivery method. Select your preferred delivery method and click the Save Account Preferences button.

The price at which a mutual fund's shares can be purchased. The asked or offering price includes the current net asset value plus any sales charge.

Amount of credit available to a client in a brokerage account for the purchase of additional securities. Purchasing power is determined by the dollar amount of securities that can be margined.

Buying a put option gives you the right to sell the specific financial instrument underlying the option at a specific price, called the exercise or strike price, to the writer, or seller, of the option before the option expires. You pay the seller a premium for the option, and if you exercise your right to sell, the seller must buy.

Selling a put option means you collect a premium at the time of sale. But you must buy the option's underlying instrument if the option buyer exercises the option and you are assigned to meet the contract's terms.

Buyers hope that the price of the underlying instrument drops so they can sell at the exercise price, which is higher than the market price. This way, they could offset the price of the premium, and hopefully make a profit as well. Sellers, on the other hand, hope that the price stays the same or increases, so they can keep the premium they've collected and not have to lay out money to buy.

The put/call ratio, which compares the number of open call and put contracts within a particular class, can help you gauge where the market is headed.