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Financial dictionary terms starting with “e”
The e-CBOT is an automated trading platform for trading futures on the Chicago Board of Trade (CBOT). See More.
E-micro forex futures are currency futures contracts that are a 10th the size of a standard futures contract. See More.
An E-mini is a stock index futures contract that is electronically traded on the Chicago Mercantile Exchange (CME) and is 1/5 the size of a standard stock index futures contract. See More.
Each way refers to a broker's act of earning a commission from both the buyer and the seller in a transaction. See More.
EAFE stands for Europe, Australasia, and the Far East -- a region that is considered the most developed outside of North America. The Morgan Stanley Capital International (MSCI) EAFE index is the most common way to track the performance of stocks in See More.
An early adopter is a person who purchases or tries new products -- typically technology -- before most other consumers. See More.
Early amortization refers to the accelerated repayment of bond principal, generally for an asset-backed security (ABS). See More.
An early call refers to the accelerated repayment of bond principal, normally on an asset-backed security (ABS). See More.
Early exercise refers to a situation in which an option holder has the right to exercise or assign an option before its expiration date. See More.
The early majority is a group of people who purchase or try new products -- typically technology -- after a much smaller population of innovators and early adopters have done so. See More.
Early withdrawal refers to a depositor's or investor's withdrawal of funds from an account before the agreed-upon withdrawal date. Early withdrawals usually incur penalties. See More.
Earmarking refers to the act of setting aside funds for special purposes or specific projects. Companies and governments earmark funds frequently. Note: Earmarking may also be referred to as pork barrel spending. See More.
Earned income is an IRS term for income that is obtained by participating in a business or trade. Earned income typically includes salaries and bonuses, wages, commissions and tips. Union strike benefits are also considered earned income, as are long See More.
The earned income tax credit (EIC) is a tax credit for low-income workers. See More.
An earned premium is the portion of an insurance premium that applies to the expired portion of an insurance policy. See More.
Earned surplus is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, retained capital, or accumulated earnings. See More.
Earnest money is a good faith deposit, typically on a house purchase. It is not the same as a down payment. See More.
Earning potential often refers to the top salary for a particular field or profession. In the finance world, the meaning is not much different: earning potential is the biggest profit a company could potentially make. See More.
Earnings are the corporate profits of a company over a specific time period after taxes and other expenses have been paid. See More.
The earnings allowance is the minimum amount a bank requires a customer to have available in a checking account in order to avoid monthly service charges. See More.
An earnings announcement is a public statement of a company's profits, usually on a quarterly basis. See More.
Earnings before interest after taxes (EBIAT) is a measure of a company's operating performance. EBIAT is a measure of how profitable a company would be if it paid taxes on its operating profit without the benefit of the tax shelter that is create See More.
Earnings before interest and depreciation (EBID) are a post-tax measure of a company's operating performance. See More.
Earnings Before Interest and Taxes (EBIT) measures the profitability of a company without taking into account its cost of capital or tax implications. See More.
Earnings before Interest, Depreciation, and Amortization (EBIDA) are a post-tax measure of a company's operating performance. See More.
Earnings before interest, tax, depreciation and amortization (EBITDA) is a measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to factor in financing decisions, accounting decisions See More.
A variation of EBITDA, EBITDAX is a measure used by natural resource exploration companies to reflect ongoing or core profitability. The acronym stands for earnings before interest, taxes, depreciation, amortization and exploration expense. See More.
Earnings before interest, tax, depreciation, and either restructuring or rent costs (depending on what you're measuring) measures the profitability of a company without taking into account its capital structure, tax rate, or primary non-cash items su See More.
Earnings before interest, tax and depreciation (EBITD) is a pre-tax measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to factor in many financing decisions, accounting decisions, See More.
Earnings before interest, taxes, depreciation, amortization and exceptional items (EBITDAE) are a measure of a company's operating performance. See More.
Earnings before interest, taxes, depreciation, amortization, and special losses (EBITDAL) is a measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to factor in financing decisions, See More.
Earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDAX) is a measure of a company's operating performance in the oil and gas industry. Essentially, it's a way to evaluate a company's performance without having t See More.
Earnings before tax (EBT) measures a company's operating and non-operating profits before taxes are considered. It is the same as profit before taxes. See More.
An earnings call is a public announcement, usually via conference call, of a company's profits, usually on a quarterly basis. See More.
An earnings credit rate (ECR) is a discount a bank gives a depositor on the depositor's bank fees. See More.
An earnings estimate is an estimate of a company's future quarterly or annual profits by a market analyst. See More.
Earnings momentum is a term to describe accelerating or slowing growth in earnings per share (EPS). See More.
The earnings multiplier, also called the price-to-earnings ratio (P/E), is a valuation method used to compare a company’s current share price to its per-share earnings. See More.
The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. The figure can be calculated simply by dividing net income earned in a give See More.
An earnings recast, also called an earnings restatement, is the act of disclosing amended financial statements. See More.
An earnings restatement, also called an earnings recast, is the act of disclosing amended financial statements. See More.
Earnings season refers to the four times per year when most public companies announce their quarterly and/or annual earnings. See More.
An earnings surprise in an unexpected difference between a company's actual earnings per share and analysts' expected earnings per share. See More.
The earnings yield is the ratio of a company's last twelve months (LTM) of earnings per share (EPS) to its stock price. It is the inverse of the price-to-earnings (P/E) ratio. See More.
An earnout is an agreement between the buyer and seller of a business whereby the buyer agrees to pay the seller additional money based on the performance of the business. See More.
An easement in gross is a legal right to use another person's land for as long as the owner owns that land or the holder of the easement dies. See More.
Easy money is a phrase that often refers to the presence of low interest rates. In the context of the Federal Reserve, easy money is a method of helping the economy expand by increasing the money supply. See More.
An easy-to-borrow list is a brokerage firm's list of securities that are available for shorting. See More.
The phrase "eat well, sleep well" refers to the risk-return trade-off that most investors must make. See More.
The term "eat your own dog food" means a company uses its own products and services. See More.
Eating someone's lunch is a business strategy where a company gains market share by aggressively taking it away from a competing company. See More.
Eating stock occurs when a broker/dealer or market maker has to purchase stock because there are not enough buyers. See More.
EBITDA margin is a measurement of a company's EBITDA (its earnings before interest, taxes, depreciation, and amortization) as a percentage of its total revenue. See More.
An ECN broker is a person who uses electronic communications networks to give clients access to buyers and sellers in the currency markets. See More.
Econometricians are economists who use math and statistics to measure economic data. See More.
Economic blight occurs when an area of a town shows visible signs of age, disrepair, and crime. See More.
Economic exposure is the risk that a company's cash flow, foreign investments, and earnings may suffer as a result of fluctuating foreign currency exchange rates. See More.
An economic indicator is an index or other data that suggests whether the economy is expanding or contracting. See More.
An economic moat is a competitive advantage that is difficult to copy or emulate, thereby creating a barrier to competition from other firms. Common economic moats include patents, brand identity, technology, buying power and operational efficiency. See More.
Economic profit is a measure of performance that compares net operating profit to total cost of capital See More.
An economic recovery is a period of economic expansion, typically after a recession. See More.
An economic refugee is a person who moves to another country in search of a higher standard of living. See More.
Economic rent is the minimum amount of money that an owner of land, labor or capital must receive in order to let someone else use that land, labor or capital. See More.
Economic risk is the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country. See More.
An economic tsunami is a set of circumstances that produce an event that triggers considerable distress in the financial markets and/or the economy. See More.
Economic value added (EVA) is an internal management performance measure that compares net operating profit to total cost of capital. Stern Stewart & Co. is credited with devising this trademarked concept. See More.
Economics is the academic study of the production, distribution, and consumption of goods and services. See More.
Economies of scale is a term that refers to the reduction of per-unit costs through an increase in production volume. This idea is also referred to as diminishing marginal cost. See More.
Economies of scope is a term that refers to the reduction of per-unit costs through the production of a wider variety of goods or services. See More.
An economist is a social scientist devoted to the study of the relationship between human behavior and supply and demand. See More.
In its broadest sense, the economy is the organized system of human activity involved in the production, consumption, exchange, and distribution of goods and services. See More.
The EDGAR Public Dissemination Service (PDS) System is an electronic system that receives SEC filings. See More.
An education credit is a tax credit associated with the payment of education expenses during the tax year. See More.
An education IRA, also referred to as a Coverdell Education Savings Account (or Coverdell ESA), is a tax-advantaged savings account intended to help parents and guardians prepare for the expense of their child’s education. See More.
The educator expenses deduction is an IRS deduction that allows teachers to exclude out-of-pocket teaching expenses from income. See More.
EE Bonds are one of two types of savings bond sold by the U.S. Treasury (the other is I Bonds). See More.
The effective annual interest rate is the rate of interest an investor earns in a year after accounting for the effects of compounding. See More.
Effective duration is a calculation used to approximate the actual, modified duration of a callable bond. It takes into account that future interest rate changes will affect the expected cash flows for a callable bond. See More.
The effective tax rate is the average rate at which an individual is taxed on earned income, or the average rate at which a corporation is taxed on pre-tax profits. See More.
For bonds, effective yield is an annual rate of return associated with a periodic interest rate. See More.
An efficiency ratio is a measure of a bank's overhead as a percentage of its revenue. See More.
Different combinations of securities produce different levels of return. The efficient frontier represents the best of these securities combinations -- those that produce the maximum expected return for a given level of risk. The efficient frontier i See More.
To get eighthed is to be outbid or undercut by one-eighth of a dollar (12.5 cents). See More.
An either-or order is a group of limit orders linked together within a brokerage account. If one order is executed, all other linked orders are automatically canceled. See More.
Something is elastic when its price varies with the price of another item. It the business world, the term most often refers to how much the price of a good or service changes when the supply of that good or service changes. The formula for elastic See More.
Elasticity is a measure of how much the quantity demanded of a service or good changes in relation to its price, consumer income, or supply. See More.
The elasticity of supply, also known as price elasticity of supply, measures the responsiveness of the quantity supplied to a change in the price of a good, with all other factors remaining the same. See More.
An election period is a window of time during which a person can take a certain action. In the bond world, the term refers to the period of time a holder of an extendible or retractable bond can extend or retract a bond. In the personal finance world See More.
Electronic commerce is a way of doing business over large electronic networks such as the Internet. Also called e-commerce, electronic commerce greatly facilitates transactions between companies and consumers (B2C), between one company and another (B See More.
Commonly known as an ECN, an electronic communication network is a system for trading financial instruments that takes place outside of the markets and is sanctioned by the Securities and Exchange Commission (SEC). An ECN connects buyers and sel See More.
EDGAR, the Electronic Data Gathering, Analysis and Retrieval system, is an automated system of submission used by public companies required to file forms with the U.S. Securities and Exchange Commission (SEC) See More.
Electronic filing, or e-File, is the online tax return filing system developed by the Internal Revenue Service (IRS) See More.
An electronic funds transfer (EFT) is a transaction that takes place over a computerized network, either among accounts at the same bank or to different accounts at separate financial institutions. See More.
An elevator pitch is a quick explanation of a business idea or other proposal. The term reflects the idea that in the time it takes to ride an elevator, the speaker should be able to summarize the key elements of the idea in a compelling way. See More.
Elves make up a group of analysts and money managers who appeared on the PBS show "Wall Street Week," which was hosted by Louis Rukeyser. See More.
An embargo is a government-instituted prevention of exports to a certain country. In the media world, an embargo is the release of information with the condition that it cannot be published or disseminated before a certain date. Companies often See More.
An embedded option is a provision in a security (typically a bond) that gives either the issuer (the company) or the investor the right to take some action in the future. See More.
An emerging market economy describes a nation's economy that is progressing toward becoming more advanced, usually by means of rapid growth and industrialization. These countries experience an expanding role both in the world economy and on the p See More.
An emerging markets fund is a fund that invests in the securities of companies and governments in developing countries. See More.
Eminent domain is a legal strategy that allows a federal or local government to seize private property for public use. The seizing authority must pay fair market value for the property seized. See More.
The Employee Benefits Security Administration (EBSA) is the branch of the United States Department of Labor responsible for overseeing the administration and planning of employee pension funds by company investment managers. See More.
An employee contribution fund is a company-sponsored plan where employees deposit (contribute) their own money towards a charity. See More.
An employee contribution plan is an employer-sponsored retirement plan where employees deposit (contribute) their own money to a special account. See More.
Th Employee Retirement Income Security Act of 1974 (ERISA) is an American federal statute that protects the retirement assets of Americans by establishing a set of rules that must be followed by fiduciaries to prevent misuse of plan assets. See More.
Employee Share Ownership Trust (ESOT) refers to a plan that assists in acquiring and allocating a company's stock for employees. See More.
Employee stock options (ESOs) are call options on a company's common stock granted to a select group of its employees. Certain restrictions on the option provide a financial incentive for employees to align their goals with those of the co See More.
An employee stock ownership plan (ESOP), also known as a stock purchase plan, is a defined contribution plan whereby an employer invests the fund's assets in its own stock. See More.
An employer identification number (EIN) is a number assigned to businesses by the IRS. It is also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number. See More.
The employment cost index, or ECI, is a quarterly report compiled by the Bureau of Labor Statistics within the U.S. Department of Labor that offers wage and benefit information and provides a leading indicator of potential inflation. See More.
Ending inventory is the book value of inventory at the end of a financial or accounting reporting period. See More.
An endowment is any asset donated to and for the perpetual benefit of a non-profit institution. The donation is usually made with the requirement that the principal remain intact and money earned from investing the principal be used for a specific pu See More.
An enhanced income security (EIS), also known as an income deposit security (IDS), is an exchange-traded security composed of both an issuer's common shares and its subordinated notes. See More.
An enrolled agent (EA) is person who is authorized to represent a taxpayer before the Internal Revenue Service (IRS). See More.
Enterprise multiple is a financial indicator used to determine the value of a company. It is equal to a company’s enterprise value divided by its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). See More.
Enterprise value represents the entire economic value of a company. More specifically, it is a measure of the theoretical takeover price that an investor would have to pay in order to acquire a particular firm. See More.
Enterprise value to cash flow from operations (EV/CFO) is the ratio of the entire economic value of a company to the cash it produces. The formula for EV/CFO is: EV/CFO = (Market Capitalization + Total Debt – Cash)/Cash from Operations Some See More.
An enterprise zone is a geographical area (often a few blocks or miles in a town) with a 0% tax on gains from the sale of assets and property sold in an enterprise zone. See More.
The Equal Credit Opportunity Act (ECOA) is legislation designed to ensure that all qualified people have access to credit. It prevents lenders from rejecting credit applicants based on race, gender, marital status, age, religion, or national origin a See More.
There are various types of equity, but put simply -- equity is ownership. In the trading world, equity refers to stock. In the accounting and corporate lending world, equity (or more commonly, shareholders’ equity) refers to the amount of c See More.
Equity financing is the method of raising capital by selling company stock to investors. In return for the investment, the shareholders receive ownership interests in the company. See More.
An equity fund is an open or closed-end fund that invests primarily in stocks, allowing investors to buy into the fund and thus buy a basket of stocks more easily than they could purchase the individual securities. See More.
An equity income fund is a mutual fund composed largely of dividend-paying stocks. See More.
An Equity Linked Foreign Exchange Option (or ELF-X) is a put option or call option that shelters an investor from foreign exchange risk. It enables an investor to sell a foreign stock position or portfolio at a future date (the expiration date of the See More.
An equity linked note (or ELN) is a debt instrument that varies from a standard fixed-income security in that the coupon is built on the return of a single stock, basket of stocks, or equity index, otherwise known as the underlying equity. See More.
The equity multiplier is a ratio used to determine the financial leverage of a company. See More.
The equity risk premium is the difference between the rate of return of a risk-free investment and the rate of return of an individual stock over the same time period. Since all investments carry varying degrees of risk, the equity risk premium is a See More.
As the name implies, equity-linked securities (ELKS) are hybrid debt securities whose return is connected to an underlying equity (usually a stock). ELKS pay a higher yield than the underlying security and generally mature in one year. At maturity, t See More.
Equivalent annual cost (or EAC) is the cost per year of owning, operating, and maintaining an asset over its lifetime. See More.
An equivalent taxable interest rate (also called equivalent taxable yield) is the return that is required on a taxable investment to make it equal to the return on a tax-exempt investment. The equivalent taxable interest rate is commonly used when ev See More.
Errors and omissions (E&O) insurance is a type of professional liability insurance used by professionals and their firms to protect themselves, their companies, and their employees in the event of claims of negligent action or incorrect work. See More.
Escrow is a financial arrangement whereby a third party holds funds in safekeeping pending the completion of a contract or other obligation. See More.
In the real estate world, mortgage companies use escrow accounts to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are not part of principal and interest. Escrow See More.
An escrow agreement is a certificate from an approved bank guaranteeing that an indicated financial security is deposited at that particular bank. See More.
An estate is all of an individual’s property and financial assets and liabilities at the time of his or her death. See More.
An estate freeze is an estate planning strategy used by an owner to lock in an asset's value and avoid future tax liability when the asset is transferred to a beneficiary. See More.
Estate planning is the act of preparing for the transfer of a person's wealth and assets after his or her death. Assets, life insurance, pensions, real estate, cars, personal belongings, and debts are all part of one's estate. Estate plans must be wr See More.
An estate tax is levied on assets inherited by the heirs to a deceased person's estate. See More.
Euro Interbank Offered Rate (EURIBOR), is the rate at which European banks offer to lend unsecured funds to each other in the euro market. See More.
Euro LIBOR is the interest rate at which banks borrow euros from other banks in the London interbank market. See More.
A eurobank is a financial institution that makes loans and accepts deposits in foreign currencies -- simplifying international trade, transactions and investing. See More.
A eurobond is a bond denominated in a currency not native to the issuer's home country. Eurobonds are commonly issued by governments, corporations, and international organizations. See More.
A eurodollar is U.S. currency held in banks outside the U.S. (typically in Europe). Eurodollars are not the same thing as euros, the currency of the European Union. See More.
Europe, Australasia, Far East (or EAFE) refers to the economically developed regions of the world outside the United States and Canada. See More.
The European Credit Research Institute (ECRI) provides analyses of retail financial services markets within the member states of the European Union. See More.
A European option is a type of put or call option that can be exercised only on its expiration date. See More.
The bearish evening star candlestick formation is a major reversal candlestick pattern. See More.
Event risk is the risk of a negative impact on a company's financial position as a result of an unexpected event like a natural disaster, industrial accident or hostile takeover. See More.
An evergreen option is an employee incentive offered by many companies as a way for the employee to accumulate company shares. See More.
The ex-dividend date is the day on which all shares bought and sold no longer come attached with the right to receive the most recently declared dividend. See More.
An exceptional item is an unusually large and uncommon transaction charge that must be disclosed on the balance sheet in accordance with GAAP. See More.
Excess return, also known as "alpha" or the "abnormal rate of return the portion of a security's or portfolio's return not explained by the overall market's rate of return. Rather, it is generated by the skill of the investor See More.
An exchange rate between two countries' currencies indicates the value of one currency relative to the other. See More.
Exchange-rate risk, also called currency risk, is the risk that changes in the relative value of certain currencies will reduce the value of investments denominated in a foreign currency. See More.
Exchange-traded funds (ETFs) are securities that closely resemble index funds, but can be bought and sold during the day just like common stocks. These investment vehicles allow investors a convenient way to purchase a broad basket of securities in a See More.
An exchangeable bond gives the holder the option to exchange the bond for the stock of a company other than the issuer (usually a subsidiary) at some future date and under prescribed conditions. This is different from a convertible bond, which gives See More.
Excise tax refers to an indirect type of taxation imposed on the manufacture, sale or use of certain types of goods and products. See More.
An exercise price is the price at which the holder of a call option has the right, but not the obligation, to purchase 100 shares of a particular underlying stock by the expiration date. See More.
Existing home sales is an economic indicator released by the National Association of Realtors. The data reflect the number of homes that have previously been constructed (and therefore accounted for by the new home sales indicator) and are now being See More.
An exotic option is any option contract comprising attributes not common to most contracts which result in complicated valuation schemes. It is the opposite of a plain vanilla option. See More.
Expansionary policy, or expansionary monetary policy, is when the Federal Reserve uses tools at its disposal in order to increase the money supply for the purpose of stimulating or growing the economy. See More.
Expectations theory suggests that the forward rates in current long-term bonds are closely related to the bond market's expectation about future short-term interest rates. See More.
The expected family contribution (EFC) is the amount of money that a family is expected to contribute toward a student's college tuition or expenses in a given year. See More.
The expense ratio is the recurring management fees for a mutual fund. A fund company charges its fund holders the expense ratio each year (expressed in terms of a percentage of the fund's assets). The mutual fund firm uses these fees to pay for m See More.
The expiration date is the last day an options contract can be exercised. After that, the contract becomes null and void. See More.
An exponential moving average (EMA) is a moving average for time-series data which places greater weight on more recent data. See More.
Extended trading is the pre-market or after-market trading that occurs on electronic market exchanges either before or after regular stock market trading hours. See More.
External debt, otherwise known as foreign debt, is the component of total debt held by creditors of foreign countries, i.e. non-residents of the debtor's country. See More.
An extra dividend, also known as a special dividend, is a one-time distribution of corporate earnings to company shareholders, typically derived from exceptional performance during a given quarter or period. See More.