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
   
Early exercise   A feature of American-style options that allows the owner to exercise an option at any time prior to its expiration date.
   
Earnings per share (EPS)   The portion of net income for a period attributable to a single common share of a company.
   
Earnings statement   A financial statement showing the income and expenses of a business over a period of time. Also known as an income statement or profit and loss statement.
   
Efficient market hypothesis   The theory that a stock's price reflects all available information and reflects its true value.
   
Embedded option   A term used to describe the convertible, retractable, or extendible features of some securities.
   
Equity   In a margin account, this is the difference between the securities owned and the margin loans owed. It is the amount the investor would keep after all positions have been closed and all margin loans paid off.
   
Equity fund   A mutual fund whose portfolio consists primarily of common stocks.
   
Equity options   Options on shares of an individual common stock.
   
Equivalent strategy   A strategy which has the same risk-reward profile as another strategy. For example, a long May 60-65 call vertical spread is equivalent to a short May 60-65 put vertical spread. (See also Synthetic positions.)
   
European-style option   An option which the holder can only exercise on the expiration date.
   
Ex-date/Ex-dividend date   The holder of shares purchased on the ex-date may not participate in an upcoming declaration such as a declared dividend, rights distribution, or stock split. Ex-dividend refers to not being entitled to already-declared dividends. Ex-rights refers to not being entitled to already-declared rights.
   
Exercise   To implement the right under which the holder of an option is entitled to buy (in the case of a call) or sell (in the case of a put) the underlying asset.
   
Exercise notice   The instructions tendered by the option holder, through the investment dealer, which states the holder's decision to activate the rights given in the option contract. Once tenderred, it is irrevocable. The holder of a call will buy the underlying security while the holder of a put will sell the underlying asset.
   
Exercise price   Also called strike price. The price at which an asset underlying a call or put option can be purchased (in the case of call) or sold (in the case of put).
   
Exercise settlement amount   The difference between the exercise price of the option and the exercise settlement value of the underlying asset on the day an exercise notice is tendered, multiplied by the trading unit. This concept applies only to cash-settled derivatives.
   
Expiration cycle  

An expiration cycle relates to the dates on which options on a particular underlying asset expire. Traditionally, there were three cycles. Today, options expire on hybrid cycles which involves a total of six options cycles.

Cycle 1: January, April, July, October (3 months at a time)

Cycle 2: February, May, August, November (3 months at a time)

Cycle 3: March, June, September, December (3 months at a time)

Cycle 4: Three consecutive months and the next month from cycle 3 (4 months at a time)

Cycle 5: Three consecutive months and the next month from cycle 1,2 or 3 (4 months at a time)

Cycle 6: Three consecutive months and the next two months from cycle 3 (5 months at a time)

   
Expiration date   Date on which an option and the right to exercise it, cease to exist.
   
Last trading day   The last business day prior to the option's expiration date during which purchases and sales of options can be made. For equity options, this is generally the third Friday of the expiration month. Note: If the third Friday of the month is an exchange holiday, the last trading day will be the Thursday immediately preceding the third Friday.
   
Expiration month   The month during which the expiration date occurs.
   
Expiration time   The time of day by which all exercise notices must be received on the expiration date.
   
Extendible bond or debenture   A bond or debenture with terms granting the holder the option to extend the maturity date by a specified number of years.
   
Extra   The short form of extra dividend which is an additional (to the regular) dividend paid out by a company.
 
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