TOP

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #

E

Early Withdrawal Penalty - An assessment charged to an investor when they withdraw their money from a fixed-term investment before its maturity. For example, if investors who have a one year certificate of deposit withdraw their money after eight months, the banking institution would assess a penalty.
Earned Income - Wages and salaries received for providing goods and services. Also refers to pension and annuity payments.
Earnings - The net income for a company during the period.
Earnings Before Interest and Taxes (EBIT) - A financial measure defined as revenues less cost of goods sold and selling, and general and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.
Earnings Estimate - A forecast for a company’s net income during a given period. An earnings estimate can come from the company’s management as well as from independent analysts.
Earnings Per Share (EPS) - Net income divided by the number of shares of common stock outstanding.
Earnings Report - A corporate financial statement that reports and nets out all earning and expenses to a profit or loss. It is therefore sometimes referred to as the profit and loss (P&L) statement.
Earnings Yield - Usually the ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price/earnings ratio. It's the total twelve months earnings divided by the number of outstanding shares, divided by the recent price, multiplied by 100.
EE Savings Bond - A zero coupon bond issued directly by the Treasury in par values ranging from $5 to $10,000. Purchased at half of par, EE savings bonds mature in 12 years and are eligible for extended maturity.
Effective Date - The first date after the cooling-off period of a new issue that the security can be offered.
Effective Tax Rate - The flat percentage rate equivalent of a given tax payer's progressive rate. For example, if your taxable income is $55,000 in 1993, the first $22,100 would be taxed at 15%, the next $31,400 at 28%, and the last $1,500 at 31%. The effective rate is approximately 24% applied to the entire $55,000.
Effective Yield - A hypothetical figure that estimates what the yield would be if the money market investor continued to reinvest dividends at the current 7-day yield for one year.
Electronic Commerce - Business that is transacted via the Internet, sometimes referred to as "e-commerce". Electronic Communications Network (ECN) - A computerized trading network that matches client’s buy and sell limit orders. As ECN prices have become widely available to the market, ECNs have gathered a larger share of the Nasdaq market. ECNs allow for the trading of stocks after the close of business for traditional exchanges and markets.
Electronic Funds Transfer - Transferring funds between accounts and firms electronically.
Emerging Growth Stocks - Securities issued by companies with less than $2 billion in market capitalization or annual sales. These companies often have limited product lines, markets, or financial resources, and their stocks can experience more erratic market movements than those of larger companies.
Emerging Market -  A securities market that is of smaller size or that has a short operating history, for example, Greece, Russia, China, and Brazil.
Endorsement - Signature on the back of a stock certificate of the person whose name appears on the face of the same. Makes the certificate negotiable.
Equipment Trust Bonds - Debt instruments that are issued by some corporations that are backed by "rolling stock" (such as airplanes or locomotives and freight cars).
Equity - 1) The value of the common stockholders' ownership in a company as listed on the balance sheet. 2) An investment that involves ownership, as opposed to a loan such as a bond or IOU; often used interchangeably with "stock." 3) With regards to a margin account, the investors portion of ownership.
Equity Funds - Equity funds as a group attempt to offer investors growth or capital appreciation over the long term. Because of the variety of equity securities available, many funds try to target a particular type of equity security.
Equity-Income Funds - Mutual funds that focus on income and invest in large-company stocks that pay big dividends. If equity-income funds generate capital gains, it is usually a case of stocks, purchased at depressed prices, becoming fully valued.
Equivalent Taxable Yield - Calculation of what a taxable investment would have to pay to equal a particular tax-free yield. Can apply an actual investor's current federal or combined tax bracket. Intended to demonstrate the after-tax benefit of investing in municipal securities.
ERISA - Employee Retirement Income Security Act. Law governing the overall administration and operation of most kinds of retirement plans.
Escheatment - Delivery of abandoned property pursuant to state law.
Eurobonds - A long-term loan issued in a currency other than that of the country or market in which it is issued. Interest is paid without the deduction of tax.
Eurodollar Bonds - Securities issued by European banks that pay interest and principal in U.S. dollars and are not registered with the Securities and Exchange Commission (SEC).
Eurodollar CDs - Certificates of deposit held in U.S. dollars by European, British, and Eastern depository institutions and available to U.S. investors.
European Monetary Union (EMU) - A group of European countries creating one currency for the entire region.
Excess Equity - Equity in a margin account above that which is required by Regulation T.
Exchange - The marketplace in which shares, options and futures on stocks, bonds, commodities and indices are traded. Principal U.S. stock exchanges are: New York Stock Exchange (NYSE), American Stock Exchange (AMEX), and the National Association of Securities Dealers (NASD).
Exchange Privilege - A mutual fund feature that allows a shareholder to convert from one fund to another fund within the same mutual fund family. For example, in a bull market an investor placed their money in an aggressive growth fund. If they expected the market to take a downturn, an exchange privilege would allow them to move the money to a conservative fund such as a money market. Mutual funds do not usually charge when an investor takes advantage of an exchange privilege. However, some funds do have specific parameters as to when or how many times an investor may use the exchange privileges.
Exchange Rate - Price at which one country's currency can converted into another country's currency.
Exchange Traded Fund (ETF) - A type of fund that tracks an index, but can be traded like a stock.
Ex-Dividend Date - The first day on which the purchaser of the security is not entitled to the dividend. It is also the day that the price of the security drops to the next highest fraction of the dividend amount.
Execution - The process of completing a securities trade. Settlement (payment and transfer of ownership) occurs between one and five days after an order is executed, depending upon the security traded.
Execution Broker ($2.00 Broker) - Broker who owns memberships on various exchanges and executes trades on the exchanges for other brokers — execution only services on listed exchanges. The name of the clearing broker is "given up" when each trade is executed to industry clearance facilities and the trade is reported back to the introducing firm for the customer and street side processing. The charge for this service used to be $2.00 — thus the name "$2.00 Broker."
Executor - Any individual's) appointed in a will, and confirmed by the court to administrate and distribute assets within the decedent's estate.
Exercise Price - The price per share the holder or owner of a call option would pay to buy the stock from the writer or the price the holder would receive should he sell the stock to the writer when exercising an option. See also Strike Price.
Expense Absorption - Where a mutual fund company manager assumes part or all of a fund's expenses, and/or waives receipt of fees payable to it, intended to boost fund performance.
Expense Limitation - Maximum amount of operational expenses which may be charged against a fund, typically pursuant to an undertaking by the fund's manager or by contractual provision.
Expense Ratio - Percentage of fund assets (per share) paid for operating expenses including advisory feeds, 12b-1 fees, administrative fees and all other costs incurred by the fund. Expense ratios are quoted in the prospectus.
Expiration - The day on which an option contract becomes void.
Expiration Month - The month in which an option or futures contract ceases to exist (expires).
Ex-Rights Date - The date after which stocks are traded without subscription rights.
Extended Maturity - A provision whereby a bond continues to pay interest beyond its stated maturity.
Ex-Warrants Date - The date after which stocks are traded without buyers being entitled to warrants which are to be distributed.