| 1. | Par | The official value of a currency. |
| 2. | Par Spread | The term used to describe the situation where the bid and ask prices for a forward spread rate are identical. |
| 3. | Paris | Nickname for the US Dollar-French Franc currency pair before the French Franc was converted to the Euro. |
| 4. | Parity | See Purchasing Power Parity. |
| 5. | Partial Lot | Some brokerages allow trading in partial lots, which are fractions of 100,000 units that normally make up a full lot. |
| 6. | Pegged | A system where a currency's value is tied with that of another currency. For example, the Chinese yuan with the US dollar. Most pegs are allowed to deviate within a small band. |
| 7. | Petrodollars | Refers to the forex reserves as a result of oil sold by oil producing nations. |
| 8. | Pip | The smallest upward or downward price movements quoted in forex. In EUR/USD, a movement of 0.0001 is one pip (for example, from 140.005 to 140.004 euro). In USD/JPY, a movement of 0.01 is More… |
| 9. | Point & Figure Charts | Technical analysis graphs that focus solely on price without any consideration of time. |
| 10. | Political Risk | Changes in government policy or to a wider extent, government instability that might have negative effects on the currency. |
| 11. | Position | A trade that is still in effect. See Open Position and Closed Position. |
| 12. | Premium | See Carry. |
| 13. | Premium Spread | Refers to the situation where the bid price of a forward spread rate is greater than the ask price. |
| 14. | Price | The cost of purchasing a second currency in terms of a first currency. |
| 15. | Price Transparency | The ability of all market participants to trade at the same price. |
| 16. | Principal Value | The original amount invested. |
| 17. | Principals | Refers to the major currencies that are traded. |
| 18. | Producer Price Index | An economic indicator that gauges the month-to-month price change that producers receive for their output. |
| 19. | Profit Taking | Closing a position in order to realize a gain. |
| 20. | Purchasing Power Parity | Refers to functional equivalency. It is the relationship between the amount of currency needed to buy a common good in one country and the amount needed to buy the same good in the second More… |
