What Are Points? Points can be a percentage of a number or a measurement of the change in a number. Points are used in various contexts in financial matters. They may indicate the interest rate on a mortgage in relation to the prime lending rate or the total size of the fees attached to a
What Is a Poison Pill? “Poison pill” is a colloquial term for a defense strategy used by the directors of a public company to prevent activist investors, competitors, or other would-be acquirers from taking control of the company by buying up large amounts of its stock. Poison pills effectively block the accumulation of stakes above
What Is a Piggyback Mortgage? A piggyback mortgage is additional debt that can include any additional mortgage or loan beyond a borrower’s first mortgage loan, which is secured with the same collateral. Common types of piggyback mortgages include home equity loans and home equity lines of credit (HELOCs). Key Takeaways A piggyback mortgage is any
What Is a Pigovian Tax? A Pigovian (also spelled Pigouvian) tax is a tax assessed against private individuals or businesses for engaging in activities that create adverse side effects for society. Adverse side effects are those costs that are not included as a part of the product’s market price. These include environmental pollution, strains on public healthcare from
What Does PIIGS Mean? PIIGS is a derisive acronym for Portugal, Italy, Ireland, Greece, and Spain, which were the weakest economies in the eurozone during the European debt crisis. At the time, the acronym’s five countries garnered attention due to their weakened economic output and financial instability, which heightened doubts about the nations’ abilities to pay back bondholders and
What Is a Payment-In-Kind (PIK) Bond? A payment-in-kind (PIK) bond refers to a type of bond that pays interest in additional bonds rather than in cash during the initial period. The bond issuer incurs additional debt to create the new bonds for the interest payments. Payment-in-kind bonds are considered a type of deferred coupon bond
What Is Pilot Fishing? Pilot fishing is a type of pre-marketing of an initial public offering (IPO) that involves testing out initial investor sentiment to receive feedback on how the market may respond to an actual issue. Pilot fishing has led to some controversy because it could undermine the role of investment bankers, who provide
What Is PIN Cashing? PIN cashing is a type of fraud in which the use of stolen debit or credit card information allows a thief to gain access to the cardholder’s bank or credit account. Typically, PIN cashing involves the use of an automatic teller machine (ATM) to withdraw funds once the card’s personal identification
What Are Pink Sheets? Pink sheets are listings for stocks that trade over-the-counter (OTC) rather than on a major U.S. stock exchange. Many pink sheet listings are stock shares in companies that cannot meet the requirements for listing on a major U.S. stock exchange like the New York Stock Exchange (NYSE). Most pink sheet listings
What Is a Pip? “Pip” is an acronym for percentage in point or price interest point. A pip is the smallest whole unit price move that an exchange rate can make, based on forex market convention. Most currency pairs are priced out to four decimal places and a single pip is in the last (fourth)
