Cyber*School

abbr. PnL or P&L (Profit&Loss)

abbr. price earnings ratio

Price Earnings Ratio

Papers of identity are a mix of bearer and order documents. In case of papers of identity the debtor is not obliged to pay to the bearer.

Price of a security which corresponds to the nominal value. i.e. 100%.

A stock with the indication of a particular denomination, which refers to a particular interest in the share capital of the company. Contrary non par value share

v. Cross Currency Swap

A security which represents a right to a variable share of the net profit of the company in addition to the fixed interest rate. This variable interest rate is linked to the dividend and shall enter into force in case a defined level of the dividend is achieved.

(PS) participation certificates are bearer instruments through which the investor takes a holding in the assets of a company and his return is additionally linked to the commercial success of the company. They are very similar to the preferred shares, as not all, but some of the rights of the shareholder are also entitled to the holder of a participation certificate.

The participation right entitles to a certain share of the net profit and / or the proceeds of liquidation of a company. The enjoyment right is guaranteed in the so-called participation certificate and does not include a right to vote nor any other rights in the company.

Securities which have an intermediate position between stocks and bonds. It certifies the holder rights of various kinds towards the company. Usually it involves a share of the net income and / or the proceeds of liquidation, but never a partnership in the company. Therefore, the owner has no right to vote at the annual general meeting.

Shares, which were only partly paid.

corresponds to a call option on an interest rate swap,The purchaser of the payer swaption has got the right but not the obligation to buy an exact specified interest rate swap at the strike price on the expiry date, i.e. he concludes a swap in which he pays a fixed interest rate in exchange of a variable one (e.g. EURIBOR). A payer swaption can be used for hedging against raising interest rates.v. swaption

abbr. Propability of Default

Funds that invest primarily or exclusively in fixed income securities.

another designation for bonds

Indication of the price as a percentage of the declared in the security nominal value. Common for debt securities. Contrary Unit Quotation

The rate of return of an investment. Investment funds: Change of share value in per cent in a period of time (distribution, balance of corporate tax taken into account). Only funds with similar assets and strategy of investment are comparable.

A performance Index takes into account (as opposed to a price index), the dividend payments of the companies contained in it and provides indications of the total return of a portfolio (eg ATX50 performance and DAX).

This refers to the review of the liquidity provider (= market maker) whether they fulfill their underwritten commitments.

Period from the date of issue of a security until the maturity (last trading day). The period in which the option is valid.

Bond with an infinite maturity

Rates in foreign exchange markets are usually quoted in 5 digits (e.g. EUR/USD 1.0125; USD/JPY 120.50). The first 3 digits are called big figure and the last 2 digits pips Professional FX-market participants usually quote just the pips of an FX-Rate, whereas the big figure is assumed to be known.

Placement of securities in the investment-seeking audience.

Plain Vanilla is often used in context with financial products that have no special configuration. Example: Plain vanilla options are called options (call or put) which have no additional properties. Contrary Exotic Options

another designation for straight bond

abbr. public limited company

The pool method is a calculation method in the value range of a bank. The customer interest of a particular contract is compared to the average customer interest rate for all liabilities (or assets) page.

another designation for portfolio

All investments in securities held by a customer, a company or a mutual fund.

The person who makes the decisions for the purchase and sale of securities for a portfolio on its own responsibility and in accordance with the agreed guidelines.

The specific involvement in the financial market, ie the rights and obligations of a market participant after a transaction. A position is created by an opening transaction and is terminated by a closing transaction again.

(normal yield curve steep yield curve) A yield curve in which long-term maturities have a higher interest rate than short-term maturities.

see over the counter market (OTC-market)

The PPI is a weighted average of selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This measure can be used for estimating the future inflation rate.

(PRIBOR) interest rate which is determined in Czech crowns and at which banks lend money to each other.

over the counter trading before market opening

A stock with a preferred treatment for the dividend payment (dividend) but which has also some disadvantages. e.g. no voting rights

Exercise before the expiration date (only possible for American options).

another designation for option price

Current value of future cash flows, which are based on the observation date by discounting.

see PVBP also called: DV01 (Dollar value of 01)

abbr. of Prague Interbank offered Rate

see conversion factor

(PER) Specifies how often the earnings per share is included in the course. It is used for the valuation of shares. The higher the PER, the more expensive the security.

Change in value of a share

In contrast to the performance index a price index does not consider any dividends paid by the companies contained in it and is primarily used as a benchmark for the underlying market development (eg ATX).

Ratio at which the current stock price is divided by revenue per share. Sales per share are calculated: Revenue of the past 12 months divided by the number of shares outstanding.

(Vertical spread) Combined option strategy in which options of the same type are bought and sold at the same time and with the same maturities, but with different strike prices. One differentiates between bull spread, which is designed for increasing prices, and bear spread, which is designed for falling prices of the base value.

Determining the issue price

market for newly issued securitiesopposite: secondary market

From the individual returns of circulating debt securities in the primary market an average primary market return is calculated on a regular basis.

short-term interest rate charged by US-banks on borrowers with best creditworthiness

Identifies the sequence for price determination of the market price,in which buy and sell orders are collected up to a specified date. Thereafter, the rate is established, in which the largest turnover is generated.

The wide range of investors. Small investors who invest on their own account capital.

the probability distribution of a variable describes the probability of the variable attaining a certain value

The degree of likelihood that the borrower of a loan or debt will not be able to make the necessary scheduled repayments. Should the borrower be unable to pay, they are then said to be in default of the debt, at which point the lenders of the debt have legal avenues to attempt obtaining at least partial repayment. Generally speaking, the higher the default probability a lender estimates a borrower to have, the higher the interest rate the lender will charge the borrower (as compensation for bearing higher default risk).

PPI (Producer Price Index) The producer price index is a weighted average of the industrial producer prices. An increase of this index can be used as an indicator of the rise in inflation

Surplus of revenue over expenses during the fiscal year

In the profit and loss account in accordance with IAS scheme, income and expenses are recognized. The aim is to determine the annual results.

Positions or departments of a bank, which are in direct contact with the customer, to conclude business and therefore earn income on the market or from customers. These include, for example, Branches, customer service departments, securitie trading or treasury ..

Return on sales. Profit as a percentage of sales. Net profit after tax divided by revenue from a particular 12-month period. Expressed as a percentage.

The profitability of a security investement is calculated by dividing the return of the investemtn with the capital invested.

investments

In case of prolongation bonds it is possible that the duration of the bond is extended. However, this must be explicitly stated in the Terms and Conditions.

(prop trading) This is the trading of securities in its own name and for its own account.

The prospectus informs the public about the business, the company's development, the directors and the members of the Supervisory Board and must include the last balance sheet of the corporation. It also includes the publication of an issue in the authorized journal for the publication of mandatory stock exchange announcements .

Liability of the issuer, the auditor and the responsible bank for the accuracy and completeness of all information in the prospectus.

Legal obligation prior to the issuance of securities to publish a prospectus.

Covered purchase of a put. Purchase of a put to hedge an underlying asset, for which the total risk corresponds with the risk of the put premium paid. The result is the position of a synthetic long call.

abbr. Public Securities Association, today: TBMA (The Bond Market Association)www.bondmarkets.com

The standard legal designation of a company which has offered shares to the general public and has limited liability. A Public Limited Company's stock can be acquired by anyone and holders are only limited to potentially lose the amount paid for the shares.

kind of amortization of a bond, at which the issuer commits himself to buy back a certain part of the issue in the secondary market within a stipulated period, if the price is below a certain level (normally below par). In contrast to sinking fund the bearer of the bond may rely, that there does no amortization take place at prices above par.

ability to purchase goods and services for money

An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. The writer of a put is committed to buy the underlying asset within a specified period of time at an agreed price. This is the opposite of a call option, which gives the holder the right to buy shares.

v. receiver swaption

v. call/put parity

Number of traded put options in relation to the number of traded calls.

abbr: Present Value of a Basispoint The PVBP expresses the change of the value of a financial instrument or an entire portfolio, if the interest rate level changes by 1 basispoint (1/100 of one percentage point) also called: DV01 (Dollar value of 01)