E

Earnings per share

The total net profit of a company per share.

EDGAR

Electronic Data Gathering, Analysis and Retrieval System - the Securities and Exchange commission's system for the electronic submission by direct transmission, magnetic tape or diskette, of most filings and related correspondence.

Efficient market

A market in which security prices reflect information instantaneously.

Electronic communication network (ECN)

Any electronic system that widely disseminates to third parties orders entered by an exchange market-maker or OTC market-maker, and permits such orders to be executed against in whole or in part.

Equity

The ordinary shares of companies. The ownership interest in a company of holders of its common and preferred stock.

Equity warrant bonds

See Subscription warrant

ETFs

See Exchange traded funds (ETFs)

Eurobonds

A long-term loan issued in a currency other than that of the country or market in which it is issued. There is no withholding tax applied to interest payment. Eurobonds are internationally underwritten and available in bearer form. They are cleared through Cedel and Euroclear and are traded crossborder.

Eurodollar strips

Strips of Eurodollars are the co-ordinated purchase or sale of a series of futures contracts with successive expiration dates. The object is to lock in a yield for a period or term equal to the length of the strip.

Eurodollars

US dollars deposited in a bank (US or non US) located outside the US.

European option

An option that can be exercised only on its expiration date rather than before that date.

European Union Allowance Unit

Allowances issued to installations which have a cap on their emissions under the EU Emission Trading Scheme. Each EUA grants the installation the right to emit one tonne of carbon dioxide during a commitment period.

Ex

The opposite of cum, and used to indicate that the buyer is not entitled to participate in whatever forthcoming event is specified (ex cap, ex dividend, ex rights, etc).

Ex all

The sale of a security without dividends, rights, warrants or other supplementary privileges associated with that security.

Ex capitalisation

A stock or share sold without the right to the capitalisation issue which has been announced.

Ex date

The date, for a benefit event (eg a dividend) used to determine whether the buyer or seller of the security is entitled to the benefit. The ex date divides the cum period from the ex period. Bargains dealt prior to the ex date (during the cum period) are dealt with the benefit attached, unless stated to the contrary as a bargain condition. Bargains dealt after ex date (during the ex period) are dealt without the benefit attached, unless stated to the contrary by a bargain condition.

Ex dividend

A stock or share sold without the right to the recently declared dividend. A stock quoted ex dividend has the amount of the dividend which is about to be paid deducted from the price.

Ex rights

Stock sold without the right to participate in an offer of securities to existing shareholders by a company in proportion to their existing holdings.

Ex warrants

Stock sold with the buyer no longer entitled to the warrants formerly attached to the stock.

Exchange of futures for cash

A transaction in which the buyer of a cash commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way, the opposite hedges in futures of both parties are closed out simultaneously.

Exchange of futures for physicals

A futures contract provision involving an agreement for delivery of a physical product that does not necessarily conform to contract specifications in all terms from one market participant to another, and a concomitant assumption of equal and opposite futures positions by the same participants at the time of the agreement.

Exchange traded commodities (ETCs)

Listed transferable securities that enable investors to buy and sell exposure to commodities through regular brokerage accounts; similar to exchange traded funds (ETFs).
See also Exchange traded funds (ETFs)

Exchange traded funds (ETFs)

Exchange traded funds are collective investment vehicles which track indices - they can allow low cost exposure to the performance of an index as quickly and efficiently as the most liquid stocks.

Ex-dividend date

The date on which a stock goes ex dividend. After this date the right to receive a current dividend will not automatically transfer from the seller of the stock to the buyer.

Exercise

The use of the right to purchase the underlying instrument by the holder of a call, or to sell the underlying instrument by the holder of a put. Upon exercise of an option on a futures contract, an option seller will be assigned (at the exercise price) a futures position opposite to the position acquired by the option buyer. Upon exercise of an option on equity shares, an option seller will be required to deliver shares at the exercise price (in the case of a call option) or purchase shares at the exercise price (in the case of a put option). Exercise of an option on an equity-index contract, either a call or a put, results in a cash settlement based on the difference between the exercise price and the index at the time of exercise.

Exercise notice

The formal notification that the holder of a call (or put) option wishes to buy (or sell) the underlying security at the exercise price.

Exercise price

See Strike price

Exercise value

For a call option, this is the amount by which the strike price is below the underlying investment; for a put option, it is the amount by which the strike price is above the underlying investment.

Exotic option

Any of a wide variety of options with unusual underlying, strike price calculations, strike price determinations, payoff mechanisms or expiration conditions.

Expiration date

(i) Options - the last date after which the option can no longer be exercised.
(ii) Bonds - the date on which a bond matures.

Expiration month

The month in which an option expires.

extraMark

The London Stock Exchange market for innovative investment companies and products, is dedicated to providing investors with special investment opportunities.

Extrinsic value

See Time value