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Terms starting with E

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Derivatives, Futures & Options

European Option

An option that may be exercised only on its expiry date, not before.

Test: exercise is permitted only at expiry; the holder may still close the position by selling it in the market at any time qualitative Fundamental Analysis & Valuation

EV to EBITDA

Enterprise value divided by EBITDA, valuing the whole business against its operating cash generation before capital charges.

EV/EBITDA = Enterprise Value / EBITDA ratio (x, times) Fundamental Analysis & Valuation

EV to Sales

Enterprise value divided by annual revenue, a capital-structure-neutral version of the price-to-sales ratio.

EV/Sales = Enterprise Value / Annual Revenue ratio (x, times) Technical Analysis & Chart Patterns

Evening Star

A three-candle formation of a large rising candle, a small-bodied candle, then a large falling candle closing well into the first body.

Test: candle 1 rises strongly; candle 2 has a small body above it; candle 3 falls and closes below the midpoint of candle 1's body qualitative Risk & Portfolio Management

Event Risk

The risk that a specific identifiable occurrence causes a sudden large move in a security's price.

Test: a scheduled or plausible discrete event exists whose outcome would materially change the security's value qualitative Corporate Actions, Dividends & Governance

Ex-Dividend Date

The first day a share trades without entitlement to a declared dividend.

Theoretical Ex-Dividend Price = Cum-Dividend Price - Dividend per Share ₹ Financial Statements & Accounting

Exceptional Item

A gain or loss that is material and outside the ordinary course of business, disclosed separately so that underlying performance stays…

Test: the item is material in size and unusual in nature or frequency, and is therefore presented on its own line ₹ crore Economy, Macro & Market Cycles

Exchange Rate

The price of one currency expressed in terms of another.

USD/INR = number of rupees required to buy one US dollar ₹ Funds, ETFs & Index Investing

Exchange-Traded Fund

A fund whose units trade on a stock exchange throughout the day at market-determined prices.

Test: units are listed and traded on an exchange, with creation and redemption in large blocks by authorised participants qualitative Funds, ETFs & Index Investing

Exit Load

A charge deducted from redemption proceeds when units are sold within a stated period of purchase.

Exit Load = Redemption Value x Load Percentage, applied if held less than the stated period % Economy, Macro & Market Cycles

Expansion

The phase of the business cycle in which output, employment and incomes are rising.

Test: real GDP, employment and industrial production are rising on a sustained basis from a prior trough qualitative Risk & Portfolio Management

Expectancy

The average result per trade of a strategy, combining win rate with the sizes of wins and losses.

Expectancy = (Win Rate x Average Win) - (Loss Rate x Average Loss) ₹ Funds, ETFs & Index Investing

Expense Ratio

The annual cost of running a fund, expressed as a percentage of its assets and deducted from the NAV.

Expense Ratio = Total Annual Costs / Average Assets Under Management x 100 % Derivatives, Futures & Options

Expiry Date

The date on which a derivative contract ceases to exist and is settled.

Test: the contract's rights and obligations terminate at the close of the stated expiry day, with settlement at the closing reference price days Indicators & Oscillators

Exponential Moving Average

A moving average that weights recent periods more heavily, with weights decaying geometrically into the past.

EMA = Price x k + Previous EMA x (1 - k), where k = 2 / (n + 1) ₹ Derivatives, Futures & Options

Exposure Margin

An additional margin charged on top of SPAN margin as a buffer against risks the scenario model does not capture.

Exposure Margin = a prescribed percentage of contract value, or a multiple of the underlying's volatility, whichever the exchange specifies ₹ Corporate Actions, Dividends & Governance

Extraordinary General Meeting

Any general meeting of shareholders other than the annual general meeting, called to decide urgent business.

Test: the meeting is convened by the board, or on requisition by members holding at least one-tenth of the paid-up capital carrying voting rights qualitative