Stock Market Glossary-P

P/E ratio or Price- earnings ratio:
The P/E ratio is calculated by dividing the stock’s market price per share to the firm’s earnings per share,for the most recent 12-month period.

Primary market:
A market for new issues of shares, debentures and bonds, where investors apply directly to the issuer for allotment on a pre-specified basis (price, minimum application amount etc).

Price limit:
The maximum and minimum prices, as specified by the exchange, between which transactions may take place during a single trading session

Reserve cash and carry:
An arbitrage transaction where the trader holds a short position in the underlying asset and a long position in the corresponding futures contract.

Roll over:
Liquidation for a futures position, and the establishment of a similar position in a more distant delivery month. This is also called a switch. When a hedger switches their futures position to a more distant delivery month this can be called ‘rolling the hedge forwards’.