Stock Market Help
Here is a list of common financial terms. Click on the letter that corresponds with the first letter of the financial term to get the definition.
Earnings Per Share
The fiscal year earnings divided by common shares outstanding for any given year for a given corporation. The estimated current fiscal year earnings per share includes the actual EPS for quarters that have already been reported plus estimates calculated by the S&P Corporation for any quarters remaining in the fiscal year. Earnings are the principal force behind stock price appreciation.
Equity
The generic term for ownership interest in an asset. In real estate, it is often used to describe the net of the current value and the mortgage balance. It is also used to describe stock and mutual funds, that is, investments that issue ownership shares.
Equity Security
Instrument representing fractional ownership in a corporation. Stocks are equity securities.
European-style Option
European-style is an option contract that can only be exercised on the expiration date.
Ex-Dividend
When a stock trades ex-dividend (without dividend), it means that a new buyer of the security will pay the price with the dividend deducted. Also, the new buyer will not have a tax liability for that dividend as does the buyer who bought on or before the record date (the official date declared by the board of directors to determine who is eligible for the dividend). The actual payment date of the dividend may be a couple of weeks after the record date. If a stock pays a large dividend, you should try to make a purchase after the record date, so to avoid the tax liability on the dividend.
Exchange
The principal exchange in which the stock is traded: NYSE = New York Stock Exchange; AMEX = American Stock Exchange; and OTC = Over the Counter. The OTC, unlike the other two, does not have a physical location. It is a network of security dealers, most of whom are connected by a computer link called NASDAQ (National Association of Securities Dealers Automated Quotation System). OTC stocks are found under the NASDAQ listings of your newspaper.
Exchange Call
NYSE requires a margin account to maintain 25% equity. Equity consists of funds and margin eligible securities in a margin account. When the market value of margined securities is less than the minimum equity, a margin call goes out to the client requesting additional equity, i.e. securities or cash. Exchange calls are due immediately.
Executed Order
Completed buy or sell transactions.
Exercised on an Option Transaction
When you buy an option you have the right to either purchase or sell stock at a predetermined price. When and if you choose to purchase or sell stock at that predetermined price you are said to be "exercising your right".
Extended Hours Trading
An extended trading session (on a matched order basis) for NYSE and AMEX. Lasting from 4:15 p.m. to 5:00 p.m. EST, it uses the closing price of a security at the conclusion of the regular trading day to determine the transaction price of the matched orders. Only securities listed on NYSE and AMEX are eligible for the extended session.