Super Finance Glossary

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Over 10,000 financial glossary terms...

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Browsing by the letter "E"

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Exercise
Definition: To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security.
Exercise Limit
Definition: Cap on the number of option contracts of any one class of contract that can be exercised within a five-day period contract. There are no restrictions on exercise for the last 10 trading days before expiry. A stock option's exercise limit varies with the volume of the underlying stock.
Exercise Notice
Definition: A broker's notification from a client who wants to exercise a right to buy or sell (depending on the type of contract) the underlying security of the option contract.
Exercise Price
Definition: The price at which the security underlying an options contract may be bought or sold.
Exercise Price (Strike Price)
Definition: The price, specified in the option contract, at which the underlying futures contract, security, or commodity will move from seller to buyer.
Exercise Price Or Strike Price
Definition: The price at which the buyer and seller agree the underlying will be exchanged for, if the option is exercised. The deal is said to be struck at the selected level.
Exercise Settlement Amount
Definition: The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier.
Exercise Value
Definition: The value of an in-the-money option if it was exercised today (before the expiration date). For a call option, this is the difference between the current asset price and the stike price. For a put option, it is the difference between the strike price and the current asset price.
Exercising The Option
Definition: The act of buying or selling the underlying asset via the option contract.
Exhaust Price
Definition: The low price at which a broker must liquidate a client's holding in a stock purchased in a margin account in order to meet a margin call when the client cannot meet the call.
Exit Fee
Definition: See: Back-end load
Exogenous
Definition: Describes facts outside the control of the firm. Converse of endogenous.
Exogenous Variable
Definition: A variable whose value is determined outside the model in which it is used. Related: Endogenous variable
Exotic Option
Definition: Refers to options that are more complex than simple put or call options. For example, a Caput is a call option on a put option. Exotic options trade over-the-counter.
Exotic Options
Definition: Any of a wide variety of options with non-standard payout structures or other features, including Asian options and Lookback options. Exotic options are mostly traded in the over-the-counter market.
Expansion
Definition: Phase of the business cycle as it climbs from a trough toward a peak.
Expatriate
Definition: An employee who is a U.S. citizen living and working in a foreign country.
Expectations Hypothesis Theories
Definition: Theories of the term structure of interest rates, which include the pure expectations theory; the liquidity theory of the term structure, and the preferred habitat theory. These theories hold that each forward rate equals the expected future interest rate for the relevant period. These three theories differ, however, on whether other factors also affect forward rates, and how.
Expectations Theory Of Forward Exchange Rates
Definition: A theory of foreign exchange rates that states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate.
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