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Elasticity of an option
Percentage change in the value of an option given a 1% change in the value of the options underlying stock.
Electronic data interchange (EDI)
The exchange of information electronically, directly from one firms computer to another firms computer, in a
structured format.
Electronic depository transfers
The transfer of funds between bank accounts through the Automated Clearing House (A.C.H.) system.
Eligible bankers acceptances
In the BA market, an acceptance may be referred to as eligible because it is acceptable by the Fed as
collateral at the discount window and/or because the accepting bank can sell it without incurring a reserve
requirement.
Elliott Wave Theory
Used in the context of general equities. Technical market timing strategy that predicts price movements
based on historical price wave patterns and their underlying psychological motives. Robert Prechter is a
famous Elliott Wave Theorist.
EM
See: Effective Margin
EM
See: Effective margin
Embedded option
An option that is part of the structure of a bond that provides either the bondholder or issuer the right to take
some action against the other party, as opposed to a bare option, which trades separately from any
underlying security.
Emerging markets
The financial markets of developing economies.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firms common stock on a
preferential basis.
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of employees.
EMS
See: European Monetary System
End-of-year convention
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