Glossary of Stock Market

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E

EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization
EBITDA is a good metric to evaluate profitability

EBIT
Effective before interest and taxes. Also known as operating income.

Effective Interest Rates
The compounded interest rate calculated on the actual inflows and outflows of cash.

EPS - Earnings Per Share
EPS is the earning on each share of a company

ESOP - Employee Stock Ownership Plan
A qualified, defined contribution, employee benefit plan designed to invest primarily in the stock of the sponsoring employer.

Emerging Markets
Developing countries.

EMI
Equated monthly installments to be paid by the borrower in repayment of the loan taken (includes principal and interest). If you think you can save some interest by pre-paying your loan be sure your EMI agreement does not contain a pre-payment penalty. In the bizarre world of loan finance, lenders prefer that you do not repay your loan before the agreed term. They lose interest, you see.

Equities
Another name for shares.

Equity per Share
Shows how much of a company's equity one share represents. If the market price is greater than the equity per share, the market believes that the company will generate extra value. Equity divided by number of shares at the close of the period.

Ex Bonus
A Share is described as ex dividend when the buyer is not entitled for the dividend. The seller remains the beneficiary. The day after dividends is paid!

Ex Rights
A share is described as ex rights when the buyer is not entitled for the Rights. The seller remains the beneficiary. Ex rights shares are cheaper than Cum Rights and offer a good 'buy' opportunity for investment oriented players.

Expiry Date
The date and time after which a writer of an option cannot exercise his rights.

Exposure
When the value of your asset/product pledged with a bank against loan is reduced by market price fluctuation or for other reasons, it increases your 'exposure', that is, the bank feels insecure about the return of the loan. And when a bank feels insecure, what happens in the famous Hollywood movie 'Indecent Exposure' is nowhere the bank could do to you if you do not reduce your exposure.

Exposure Limit
The limit allowed to the broker by his exchange or to the customer by broker. It is the total value up to which one is allowed to hold open positions at any point of time.

Extended Hours Trading

Trades executed before or beyond normal market hours.

Earnings Estimate
An analyst's estimate for a company's future quarterly or annual earnings.

Earnings Surprise
When the earnings reported in a company's quarterly or annual report are above or below analysts' earnings estimates.

Equity Fund
A mutual fund that invests in a broad, well-diversified group of stocks.

Ex-Dividend
The trading of shares when a declared dividend belongs to the seller rather than the buyer.

Exponential Moving Average - EMA
A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data.

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