E

Earnings Per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

If a company earning CHF 10 million in one year had CHF 10 million shares of stock outstanding, its EPS would be CHF 1 per share.

Equities

Also known as stocks or shares.
A financial instrument that represents partial ownership of a company.

European-style Option

Options that can only be exercised at the end of its life, at its maturity.

Exchange

A market where securities, Options, Futures and/or commodities are traded.

Exchange rate

The value of one currency in terms of another. For example, one Argentine dollar might be worth 58 US cents or 70 Japanese yen. Currencies traded freely in foreign-exchange markets have a spot rate (applying to trades settled 'spot', that is, two working days hence) and a forward rate (which is the spot rate adjusted for the interest rate differential between the two currencies until maturity). Countries can determine their exchange rates in several ways:

• A floating exchange rate system, where the currency finds its own level in the market.
• A crawling or flexible peg system, which is a combination of an officially fixed rate and frequent small adjustments that in theory work against a build-up of speculation about a revaluation or devaluation.
• A fixed exchange-rate system, where the value of the currency is set by the government and/or the central bank.

  • Excercise

    An Option is exercised when the right to purchase is invoked or the underlying asset is sold at the price stated in the Option contract.

    Expiration date

    The expiration date is the day on which the Option expires or matures. Options that can only be exercised on the expiration date are called European Options. There are also Options that can be exercised at any time after the creation of the Option contract and up to and on the expiration date, or just at discrete intervals during the contract period. These are respectively called American and Bermudan (also Mid-Atlantic) Options.

    Exposure

    Being subject to risk, such as an exposure to foreign currency exchange-rate fluctuations.

    Exposure coverage

    The percentage of the exposure covered by funds available for margin.