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Easing |
A modest decline in price. |
|
Economic Indicator |
A government issued statistic that indicates current
economic growth and stability. Common indicators include
employment rates, Gross Domestic Product (GDP), inflation,
retail sales, etc. |
|
EMS |
Abbreviation for European Monetary System, an agreement
between member nations of the European Union to maintain
an alignment between the exchange rates of their
respective currencies. EURO - the currency of the European
Monetary Union (EMU). A replacement for the European
Currency Unit (ECU). European Central Bank (ECB) - the
Central Bank for the new European Monetary Union. |
|
European Monetary Unit |
The principal goal of the EMU is to establish a single
European currency called the euro, which will officially
replace the national currencies of the member EU countries
in 2002. Currently, the euro exists only as a banking
currency and for paper financial transactions and foreign
exchange. The current members of the EMU are Germany,
France, Belgium, Luxembourg, Austria, Finland, Ireland,
the Netherlands, Italy, Spain and Portugal. |
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Equity |
The amount currently held in a customer’s account
calculated as if all the opened positions will be closed
at the current market quotes. The account is comprised of
unrealized gains, less unrealized losses and plus or minus
storage. |
|
Euro Zone |
The group of 12 countries that have combined their
currencies into a single currency (euro). They still have
separate sovereignties, but also have a combined central
bank (ECB) which handles economic policy issues for them
as one group. |
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Exchange control |
A system for controlling inflows and outflows of foreign
exchange; the devices include licensing multiple
currencies, quotas, auctions, limits, levies and
surcharges. |
|
Exotic |
A less broadly traded currency. |
|
Exposure |
(i) Net working capital - the current assets in a foreign
currency minus current liabilities in the currency;(ii)
Net financial method - the current assets in a foreign
currency minus current liabilities and long-term debt in
the currency;(iii) Monetary/non-monetary method - monetary
assets and liabilities in the foreign currency are valued
at current exchange rates, while non-monetary items are
entered at the relevant historic rates. |
|
Easing: |
Modest decline in price |
|
Economic Indicator: |
A statistics which indicates current economic growth rates
and trends such as retail sales and employment. |
|
ECU: |
European Currency Unit |
|
EDI: |
Electronic Data Interchange |
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Effective Exchange Rate: |
An attempt to summarise the effects on a country's trade
balance of its currency's changes against other
currencies. |
|
EFT: |
Electronic Fund Transfer |
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Either way market: |
In the Euro interbank deposit market where both bid and
offer rates for a particular period are the same. |
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Emu: |
Name of currency that is to be the vehicle for European
monetary union under the Maastricht Treaty. |
|
EMS: |
European Monetary System |
|
End/end: |
Indicates that both the spot and forward maturity, or two
forward maturities in a swap transaction, fall due on the
last business day of appropriate calendar months. |
|
English Auction: |
Bidders buy bonds at the price they bid provided it is
above the stop price. |
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Entrepot: |
A term used for international trade where goods are
shipped to a centre for reexport. Hong Kong engages in
significant amounts of this form of trade. |
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EOE: |
European Options Exchange |
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Epsilon: |
The change in the price of an option associated with a 1%
change in implied volatility( technically the first
derivative of the option price with respect to
volatility). Also referred to as eta, vega, omega and
kappa |
|
ERM: |
Exchange Rate Mechanism |
|
Euro clear: |
A computerised settlement and depository system for safe
custody, delivery of, and payment for Eurobonds. The
settlement convention is three business days after trade. |
|
Euro Rates: |
The rates quoted for Euro-currencies. |
|
Eurobonds: |
A long-term loan issued in a currency other than that of
the country or market in which it is issued. Interest is
paid without the deduction of tax. |
|
Eurocurrency: |
A currency domiciled outside its country of origin
normally held by non residents. |
|
Eurodollars: |
US dollars deposited in a bank (US or non US) located
outside the USA. |
|
Eurofranc: |
Swiss French or Belgian francs traded on the Eurocurrency
market. Normally swiss as the more common currency. |
|
Euromark: |
Deutschmarks traded on the Eurocurrency market. |
|
European Monetary System: |
A system designed to stabilise if not eliminate exchange
risk between member states of the EMS as part of the
economic convergence policy of the EU. It permits
currencies to move in a measured fashion (divergence
indicator) within agreed bands (the parity |
|
European option: |
An option that can be exercised only on its expiration
date rather than before that date. |
|
European Union: |
The grouping formerly known as the European Community, an
organisation wishing to facilitate inter member trade and
economic intergration. |
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Excess Liquidity: |
The maintenance by banks of a higher level of funds than
is normally desirable, usually arising due to a drop in
demand for funds because of economic conditions or
interest rates. |
|
Exchange control: |
A system of controlling inflows and out flows of foreign
exchange, devices include licencing multiple currencies,
quotas, auctions, limits, levies and surcharges. |
|
Exchange Equalisation Account: |
An account controlled by the UK Treasury and managed by
the Bank of England. Its assets include the country's gold
and foreign exchange reserves. Its objective is to manage
the exchange rate in accordance with government policy. |
|
Exchange of futures for cash: |
A transaction in which the buyer of a cash commodity
transfers to the seller a corresponding amount of long
futures contracts, or receives from the seller a
corresponding amount of short futures, at a price
difference mutually agreed upon. In this way, th |
|
Ex-dividend date: |
The ex-dividend date determines who, from a trading
perspective, receives the next coupon payment.
Transactions settled on or after the ex-dividend date are
deemed to be "ex-coupon" and therefore, the buyer does not
receive the next coupon. The seller mus |
|
Exercise notice: |
The formal notification that the holder of a call (or put)
option wishes to buy (or sell) the underlying security at
the exercise price. |
|
Exercise limit: |
A limit on the number of options contracts a holder may
exercise within a specific period. |
|
Exercise price: |
See Strike price. |
|
Exercise value: |
For a call option, this is the amount by which the strike
price is below the underlying investment; for a put
option, it is the amount by which the strike price is
above the underlying investment. |
|
Exotic: |
A less broadly traded currency. |
|
Expiration date: |
(1) Options - the last date after which the option can no
longer be exercised. (2) Bonds - the date on which a bond
matures. |
|
Expiration month: |
The month in which an option expires. |
|
Expiry date: |
The last date on which an option can be bought or sold. |
|
Exposure: |
see position and mismatch. Various methods of calculating
an exposure exist: (i) Net working capital:- The current
assets in a foreign currency minus current liabilities in
the currency; (ii) Net financial method: The current
assets in a foreign currency |
|
Extendible bond: |
A bond with a call provision that gives the issuer the
option to extend the maturity date (if the call is not
exercised) and reset the coupon at any rate. The investor
then may choose to put the bond at the call price or
accept the new coupon. |
|
Extrinsic value: |
See Time value. |
