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Earnings Per Share (EPS)
Earnings attributed to ordinary shareholders divided by the number of shares in use.
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Electronic Random Number Indicator Equipment (ERNIE)
Colloquial name for the computer which selects the winners of premium bonds prizes.
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EPIC
A short code used to identify shares traded on the London Stock Exchange, e.g., the EPIC for British Airways is BAY.
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Equity
A common term to describe stocks or shares.
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Estate
All of the valuable things an individual owns, such as real estate, art collections, collectibles, antiques, jewellery, investments and life insurance.
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Ethical Investment
The investment in specific sectors through either personal conviction or the view that such companies have a higher potential, for example, investment in funds or companies supporting ‘green’ issues, or the avoidance of so-called ‘unethical’ areas such as animal experimentation, pollution etc.
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Eurobond
A bond issued and traded on the international market place.
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Euroclear
Founded in 1968, Euroclear provides clearing, settlement and custody for a wide range of internationally traded eurobonds, domestic bonds and equities. Euroclear is one of two International Central Securities Depositories; the other being Clearstream.
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EURONEXT
A pan-European securities and derivatives exchange listing Dutch, French, Portuguese and Belgian securities and derivatives, plus the derivative products traded on LIFFE.
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European-style exercise
An option which may be exercised only on its expiry date.
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Event of Default
A circumstance in which a borrower fails to comply with an agreement on a borrowing, thereby enabling investors to call in the loan. The breaching of any covenant clause will be an event of default. This also includes failure to pay, failure to perform other duties and obligations, false representation, bankruptcy and alienation of assets.
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Exact Interest
Interest based on 365 days, rather than 360 days which is used on some bonds. Also known as actual interest.
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Exchange Delivery Settlement Price (EDSP)
This determines the price for physical delivery of the underlying instrument or the price at which the options contract is cash settled.
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Exchange Minimum Quote Size (EMQS)
The minimum number of lots which any market maker quote shall be good for.
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Exchange rate
The rate at which one currency can be exchanged for another.
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Exchange Traded Funds (ETFs)
Passively managed basket of stocks that mirrors a particular index and that can be traded like ordinary shares. They trade intraday on stock exchanges, like securities, at market determined prices. In essence, ETFs are index funds that trade like stocks.
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Ex-dividend
Literally “without dividend”. Signifies that a buyer of a security, ex-dividend, is not entitled to the dividend or interest payment that has been declared or is due which has not yet been paid. (See also Cum Dividend).
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Exercise an option
Take up the right to buy or sell the stock which is the subject of the option.
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Exercise Notice
A formal notification to the Clearing House that the holder of a call/put option wishes to buy/sell the underlying security at the exercise price.
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Exercise price/ Strike price
The fixed price, per share or unit, at which an option conveys the right to call (purchase) or put (sell) the underlying shares or units.
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Expiry Date
The last day (American-style options) or the only day (European-style options) on which an option may be exercised, and the last day on which expiring series may be traded.
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Extraordinary General Meeting (EGM)
A meeting of shareholders which is held by a company on an ad hoc basis for a particular purpose. A period of notice (usually 20 business days) must be given.