Glossary

E

 

earnings per share     

(EPS) Is the net profit after taxation and preference dividend divided by the number of ordinary shares in issue during the year.

effective date

The date a corporate action is effective and resultant new cash and/or stock are distributed.

elasticity

Sometimes called leverage. It measures the theoretical increase (decrease) in the price of a covered warrant (in percentage terms) based on a 1% move in the underlying asset

Elliott Waves

Named after Ralph Nelson Elliott an accountant, who developed the concept in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves.

entitlement offer

Means an issue of new shares by a company which may be subscribed for in return for agreeing to pay for the allotment of the new share at a set price. This entitlement is not tradeable unlike a rights issue.

EPB

("Equivalent Pension Benefits") Before 1974, some occupational pension schemes provided benefits in place of the then State pension scheme. EPBs are usually very small, and are increasingly rare.

equities

An alternative name for ordinary shares.

equity fund

A fund investing primarily in equities.

european style exercise

An option that may be exercised only on the last trading day. A European style covered warrant allows the holder to exercise the covered warrant only at expiry.

European Savings Directive

Aims to counter cross border tax erasion by collecting and exchanging information about foreign resident individuals recieving savings income outside their resident state.

ex

Meaning "without" this is the opposite of Cum, and is used to indicate that the buyer of a security is not entitled to participate in whatever forthcoming event is specified. Ex cap, ex div, ex rights etc.

ex-dividend

A share sold ex-dividend means the buyer is not entitled to receive the recently declared dividend.

exchange

Generally refers to a recognised stock market, for example, the London Stock Exchange or NASDAQ.

exchange price input code (EPIC)

(Epic Code) A three or four character code, unique to a particular stock, which is used as a systems code when accessing price. Also referred to as stock code.

execution only

Where the stockbroker buys and sells at your request with no advice.

exercise notice

A formal notification that the holder of a call/put option wishes to buy/sell the underlying security at the exercise price.

exercise of warrants

The relinquishing of a warrant at a set date together with a cash payment in return for the resultant security.

exit charges

Some Fund Managers levy charges on certain funds, should you decide to sell your investment within a specified period e.g. five years. This type of charge, which is becoming increasingly rare, may replace - or be in addition to - an initial charge.

expired status

These are orders where your specified limit price has not been met by the expiry date you have selected.

extraordinary general meeting (EGM)

General meeting of a company at which non-routine proposals are voted on by shareholders.

Ex-distribution

The period, which can be no more than two months, immediately before the distribution of income from a fund (excludes cash funds). If you buy a fund during this period, you are not entitled to the next income payment. However, if you sell during this period then you remain entitled to the next income distribution.