Spread Betting Glossary: P

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P

Pairs trading
A trading strategy used as a hedge where the trader goes long and short on a pair of instruments relating to the same or linked sectors to either minimise losses or guarantee a profit regardless of market movements.
Partial closing
A strategy used to partially minimise exposure to a given position, executed by ordering a corresponding closing trade for a proportion (but not all) of an open position, as a means of locking in profits or limiting potential losses.
PIP
Percentage in points, used as a unit of measurement for staking and calculating earnings in spread betting. For each PIP a market moves upwards, the trader earns PIP x Stake, with the trader having to pay PIPs x Stake for losing positions.
Premium
The difference in price between the value of an underlying asset and the price commanded, usually determined by the supply and demand in the relevant market.