Glossary

# 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

Welcome to Firstrade's stock market glossary. Do all the research you want. Use this glossary to look up any financial term.

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Earnings
The net income for a company during the reporting period.

Earnings Before Interest and Taxes (EBIT)
A measure of a firm's earnings performance that is not clouded by debt payments or tax regulations. It is calculated as revenues minus the cost of goods sold and selling, and general expenses.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Also known as operating cash flow. EBITDA is calculated by subtracting cost of sales and operating expenses from revenues. Like the name implies, EBITDA does not take into consideration the interests, taxes, depreciation and amortization costs.

Earnings Growth %
A weighted average of the one-year earnings growth rates of the stocks in the fund. This calculation excludes stocks whose earnings changed from a loss to a gain and stocks whose earnings gains exceeded 999.99%.

Earnings Per Share (EPS)
The net income divided by the number of shares of common stock outstanding.

Earnings Report
A corporate financial statement released by the company quarterly or annually netting all earnings and expenses to a profit or loss.

Earnings Yield
The ratio of earnings per share to the current share price, after allowing for tax and interest payments on fixed interest debt. It is calculated by taking the total twelve months earnings divided by the number of outstanding shares, divided by the recent price, multiplied by 100.

EBIT
See Earnings Before Interest and Taxes.

EBITDA
See Earnings Before Interest, Taxes, Depreciation and Amortization.

ECN
Electronic Communication Network. The electronic system that matches buyers and sellers for the electronic execution of trades. The benefits an investor gets from trading with an ECN include after-hours trading, avoiding market makers (and their spreads), and anonymity (which is often important for large trades).

EE Savings Bond
A zero-coupon bond issued directly by the Treasury in par values up to $10,000. Purchased at half of par, EE savings bonds mature in 12 years and are eligible for extended maturity. Individuals can purchase up to $30,000 EE savings bonds per year.

Effective Date
The first date after the cooling-off period of a new issue on which the security can be offered.

Endorsement
A signature on the back of a negotiable instrument such as a stock certificate or check, matching the name that appears on the face, making the document negotiable.

Equipment Trust Bonds
Debt instruments issued by some corporations that are backed by equipment such as airplanes, locomotives or freight cars.

EPS
See Earnings Per Share.

Equity
The value of the common stockholders' ownership interest in a company, in the form of common or preferred stock.

Equity-Income Funds
Mutual funds that focus on large-company stocks that pay big dividends.

Equity Options
An options contract that gives the holder the right to buy or sell a specified number of shares of stock at a specified price before in a specific time period. One option usually equals 100 shares of stock.

Estimated EPS Growth
The mean estimate of earnings-per-share growth from the Wall Street analysts estimates.

ETF
See Exchange Traded Funds.

Eurobonds
Bonds issued and traded in a currency other than that of the country or market in which it is issued. Interest is paid without the deduction of tax.

European-Style Option
An option contract that can only be exercised on the expiration date.

Excess Equity
Equity in a margin account above the requirement set by Regulation T.

Exchange
The marketplace where stocks, bonds, options, futures and commodities are traded. Major U.S. stock exchanges are: New York Stock Exchange (NYSE), American Stock Exchange (AMEX), and the National Association of Securities Dealers (NASD).

Exchange Traded Fund (ETF)
A type of fund that tracks an index, but can be traded like a stock.

Ex-Dividend Date
1) The day on which the price of a security is reduced to reflect dividend payout. 2) The first day on which the buyer of a security will no longer be entitled to receive the recently announced dividend payment.

Execution
The completion of a securities trade.

Exercise
To utilize the right of the options holder to buy (call option) or sell (put option) the underlying security.

Exercise Price
The stated price per share at which the underlying asset may be traded between the holder and writer of the options contract. Also called strike price.

Expense Ratio
The operating costs, management fees, administrative fees, 12b-1 fees and all other costs incurred by the fund expressed as a percentage of the fund's total asset.

Expiration
The day on which an option contract becomes void.

Expiration Cycle
The cycle of 3 months on which options on a particular security expire. Options are placed in one of three cycles: the January cycle (January, April, July, October), the February cycle (February, May, August, November), or the March cycle (March, June, September, December).

Expiration Date
The last day on which an option may be exercised for American style options. For European options, this is the only date when the option can be exercised.

Expiration Month
The month when an option or futures contract 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 after the stated maturity.

Ex-Warrants Date
The date after which stocks traded are not entitled to warrants which are to be distributed.


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