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Indian Market, Regulation & Taxation

PAN

The Permanent Account Number, a ten-character identifier issued by the income tax department and mandatory for securities transactions.

Test: the ten-character alphanumeric identifier is quoted and linked for every securities market transaction and tax filing qualitative Market Psychology & Behavioural Finance

Panic Selling

Selling driven by fear during a sharp decline, without reference to value.

Test: the sale is triggered by the size or speed of the price fall rather than by new information about the asset qualitative Indicators & Oscillators

Parabolic SAR

A trailing stop-and-reverse indicator that plots dots which accelerate toward price as a move extends.

SAR = Prior SAR + Acceleration Factor x (Extreme Point - Prior SAR), with the factor rising by a step each time a new extreme is made ₹ Orders, Execution & Market Structure

Partial Fill

The execution of only part of an order's quantity, with the remainder either resting in the book or cancelled.

Filled Quantity < Order Quantity, with the unfilled balance either resting or cancelled per the order's validity shares Funds, ETFs & Index Investing

Passive Investing

An approach that seeks to match an index's return rather than to beat it, by holding the index's constituents.

Test: security selection is determined by index rules rather than by judgement, and success is measured by tracking rather than by outperformance qualitative Orders, Execution & Market Structure

Pay-In

The stage of settlement at which members deliver securities and funds owed to the clearing corporation.

Test: on the settlement date, net obligations are transferred from members to the clearing corporation by the pay-in deadline qualitative Orders, Execution & Market Structure

Pay-Out

The stage of settlement at which the clearing corporation distributes securities and funds to the members entitled to them.

Test: after pay-in is complete, net entitlements are transferred from the clearing corporation to members and onward to clients qualitative Fundamental Analysis & Valuation

PEG Ratio

The price-to-earnings ratio divided by the expected annual earnings growth rate, used to judge whether growth justifies the multiple.

PEG = Price-to-Earnings Ratio / Expected Annual Earnings Growth Rate (in percent) ratio (x, times) Technical Analysis & Chart Patterns

Pennant

A short converging consolidation following a sharp move, forming a small symmetrical triangle.

Test: a steep prior move, followed by a brief consolidation whose upper and lower boundaries converge qualitative Market Basics & Instruments

Penny Stock

An informal label for a very low-priced share, typically of a small company with thin trading and limited disclosure.

Test: low absolute price per share combined with small market capitalisation and low daily turnover qualitative Economy, Macro & Market Cycles

Per Capita Income

National income divided by population, used as a rough measure of average prosperity.

Per Capita Income = National Income / Total Population ₹ Bonds & Fixed Income

Perpetual Bond

A bond with no maturity date, paying interest indefinitely unless the issuer exercises a call option.

Price = Annual Coupon / Required Yield, for a perpetual stream with no redemption ₹ Derivatives, Futures & Options

Physical Settlement

Settlement of a derivative by actual delivery of the underlying security against payment, rather than by cash difference.

Test: at expiry, an in-the-money contract obliges delivery of Lot Size units against payment of Strike x Lot Size qualitative Technical Analysis & Chart Patterns

Piercing Pattern

A two-candle formation in which a rising candle opens below the prior falling candle's close and closes above its midpoint.

Test: previous candle falls; current Open < previous Low; current Close > midpoint of previous body but below its Open qualitative Fundamental Analysis & Valuation

Piotroski F-Score

A nine-point checklist of year-on-year improvements in profitability, leverage and efficiency, scoring financial strength from 0 to 9.

F-Score = sum of nine binary tests across profitability (4), leverage and liquidity (3), and operating efficiency (2) ratio (x, times) Technical Analysis & Chart Patterns

Pivot Point

A reference price computed from the previous period's high, low and close, with support and resistance levels derived from it.

Pivot P = (High + Low + Close) / 3; R1 = 2P - Low; S1 = 2P - High; R2 = P + (High - Low); S2 = P - (High - Low) ₹ Technical Analysis & Chart Patterns

Point and Figure Chart

A chart that plots columns of Xs and Os for price movement of a set size, ignoring time entirely.

New X or O is added each time price moves one box size; a reversal requires a move of the reversal amount, typically three boxes ₹ Economy, Macro & Market Cycles

Policy Transmission

The process by which a change in the central bank's policy rate passes through to lending and deposit rates in the economy.

Transmission = Change in Bank Lending Rate / Change in Policy Rate, over the period examined % Risk & Portfolio Management

Portfolio

The complete collection of investments held by an individual or institution, considered as one unit.

Portfolio Return = Sum of (Weight of each Holding x Return of that Holding) ₹ Funds, ETFs & Index Investing

Portfolio Management Service

A SEBI-registered service managing a separate portfolio of securities for a single client, with a high minimum investment.

Test: securities are held in the client's own name or demat account and managed under a discretionary or non-discretionary agreement ₹ Funds, ETFs & Index Investing

Portfolio Overlap

The proportion of holdings, by weight, that two funds have in common.

Overlap % = Sum over all common holdings of the minimum of the two funds' weights in that holding % Funds, ETFs & Index Investing

Portfolio Turnover Ratio

The proportion of a fund's portfolio replaced over a year, measuring how actively it trades.

Portfolio Turnover = Lesser of Total Purchases or Total Sales / Average Assets Under Management x 100 % Risk & Portfolio Management

Position Sizing

Deciding how much capital to commit to a single position, based on the loss that would be acceptable if it went wrong.

Position Size = (Account Value x Risk per Trade %) / Risk per Share shares Market Basics & Instruments

Positional Trading

Holding a position for weeks to months, aiming to capture a sustained trend rather than a single swing.

Test: holding period measured in weeks or months, with the exit governed by trend condition rather than by an intraday level qualitative