Growth Investing Stock Market Glossary
From A for ‘Asset’ to Z for the ‘Zero-Coupon Yield Curve’ — your comprehensive guide to everything that matters in the markets.
E-mini
Contract family of reduced futures (e.g. S&P 500 E-Mini) with lower nominal values.
Earnings Before Tax
Pre-tax profit as a subtotal in the income statement.
Earnings Call
Telephone/web conference where management and analysts discuss quarterly or annual figures as well as outlook and Q&A.
Earnings Guidance
Expectations for future key figures such as revenue, margin, or EPS published by management.
Earnings per share (EPS)
Profit per share according to IFRS/US-GAAP, often reported as diluted EPS.
Earnings per share (EPS)
Profit per share; key figure for valuation and earnings growth.
Earnings Power Value (EPV)
Valuation approach that estimates the sustainable earnings value of a company based on normalized profits.
Earnings Surprise
Deviation of published results from consensus estimates, often associated with price reactions.
Earnings Yield
Reciprocal of the P/E ratio; relates earnings per share to the price.
EBIT
EBIT as a measure of operational profitability.
EBIT margin
Relationship of EBIT to revenue as a key figure of operational profitability.
EBITDA
Result before interest, taxes, and depreciation as a proxy for operating cash flow.
EBITDA margin
The ratio of EBITDA to revenue as a rough measure of profitability.
Economic calculation (Cost-Benefit)
Comparison of costs and benefits of a measure.
Economic growth
Increase in overall economic production, usually measured by GDP.
Economic Moat
Sustainable competitive advantage that allows above-average returns over the long term.
Economic ownership
Attribution of assets based on dominant use rather than legal form.
Economic Value Added (EVA)
Surplus of the operating result after taxes over the cost of capital as a measure of value contribution.
Eersteinschuss (Initial Margin)
Initial margining for trading derivatives.
Efficient frontier
Amount of optimal portfolios with maximum return for a given risk (Mean-Variance Theory).
Efficient Markets Hypothesis (EMH)
Hypothesis, that prices already reflect available information.
Einzelwertrisiko (Idiosyncratic Risk)
Risk that is specific to a security and can be reduced through diversification.
Emerging Markets
Emerging markets capital markets have a higher growth potential, but also a higher risk/volatility profile.
Emissions prospectus
Legal document with essential information on the securities issuance.
Emissions yield
Yield of a bond based on the issue price.
Endowment Effect
Behavioral economic effect in which ownership increases the subjective evaluation of a good.
Enterprise Value
Market value of the operating business including net financial debt.
Enterprise Value (EV)
Enterprise value as the sum of market capitalization and net financial liabilities (including minorities depending on the definition).
Enterprise Value to Earnings Before Interest and Taxes
Evaluation multiple from Enterprise Value in relation to EBIT.
Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization
Evaluation multiples based on Enterprise Value in relation to EBITDA.
Equity
Equity participation in a company or residual claim of the shareholders.
Equity
Residual size of the balance sheet as the difference between assets and liabilities.
Equity Kicker
Additional right (e.g. warrants) in financings that participates in the increase in stock value.
Equity method (At-Equity)
Balance sheet method for associated companies with proportional contribution to earnings.
Equity ratio
Share of equity in the balance sheet total as an indicator of stability.
Equity Risk Premium (ERP)
Additional expected return of stocks compared to risk-free investments.
Equity Story
Investment narrative of a company with drivers, market, strategy, and financial goals.
Ereignisfenster
Time period for an event used to measure abnormal returns.
Ertragskennzahl
Collective term for key figures that describe the performance and margin quality of a company.
ESG
Supercategory for environmental, social, and governance criteria in the investment process.
ESG rating
Evaluation of a company's sustainability performance by specialized agencies.
ESMA
European Securities and Markets Authority providing guidelines and supervision of EU financial markets.
ESOP (Employee Stock Ownership Plan)
Employee participation program with stock or option allocation.
ESTR (€STR)
Euro Short-Term Rate as the reference interest rate for the money market segment in the euro area.
ETC (Exchange Traded Commodity)
Exchange-traded commodity security, usually structured as a debt instrument.
ETD (Exchange-Traded Derivatives)
Derivatives traded on futures exchanges with standard contracts and clearing.
ETF (Exchange Traded Fund)
Exchange-traded fund with typically index-tracking replication and low costs.
ETN (Exchange Traded Note)
Unsecured bearer bond with exchange trading and index reference.
EU Taxonomy
Classification system of the EU for ecologically sustainable economic activities.
EURIBOR
Reference interest rate for interbank loans in the euro area with various maturities.
Eurobond
Bond issued in a currency other than that of the country of issuance.
Euroclear
International central securities depository and securities settlement service provider.
Eurodollar
US dollar deposits at banks outside the USA.
European Central Bank (ECB)
Central bank of the euro currency area with responsibility for monetary policy and financial stability.
Event Risk
Risk of unexpected events with sudden price impacts.
Event Study
Empirical analysis of the price effect of defined events around an event window.
Event-Driven
Investment strategy focusing on special situations such as M&A, spin-offs, or restructurings.
Ex-Date (Ex-Dividend)
Trading day on which a stock is traded without entitlement to dividends.
Ex-dividend date
Decline in a stock's price on the ex-dividend date roughly equal to the amount of the dividend paid out.
Exchange fee
The fee charged by the trading venue for transactions or listings.
Exchange For Physical (EFP)
Exchange of a future for the physical position outside the order book.
Exchange Participant Regulation
Rules for the activity of specialists.
Exchange rate
Price of a currency in units of another currency.
Exchange rate parity
Relationship between interest rates and forward/spot exchange rates according to interest rate parity.
Exchange rate regime
Order of exchange rate formation such as fixed exchange rate, band, managed float, or free float.
Exchange rate risk
Danger of adverse yield effects due to currency fluctuations.
Exchange rate target band
Tolerance band, in which a currency is held against a reference.
Execution Only
Service without advice, where the broker only executes orders.
Execution price
Price at which an order was actually executed.
Execution Quality
Measure for execution quality based on price, speed, and likelihood of execution.
Execution venue
Trading venue or system where an order is executed (e.g. Xetra, floor trading, MTF).
Exercise style (American/European)
Exercise rules of options depending on style over the term or only on the expiration date.
Exit taxation
Taxation of hidden reserves when relocating tax residence abroad.
Exotic Options (Exotics)
Options variants with complex payout profiles such as barriers, Asians, or digitals.
Expected Return
Predicted average return of an asset based on a model or assumptions.
Expected Shortfall (ES)
Average loss beyond a confidence level; synonym for CVaR.
Expected Value
Weighted mean of possible manifestations of a random variable.
Expense ratio
Relationship of specific costs to revenue, assets, or premiums (e.g. OCF, TER, Cost-Income-Ratio).
Expense Ratio
The annual ongoing charges figure of a fund as a percentage of the fund's assets under management.
Exponential Moving Average (EMA)
Exponentially weighted moving average with stronger weighting of more recent data.
Exposure
Unintended multiple exposure due to overlapping products or indices.
Exposure
Total risk exposure to markets, factors, or counterparties.
Exposure-at-Default (EAD)
Expected claim amount at the time of a credit default.
External growth
Increase in sales/profit through acquisitions or investments instead of organic business.
Extrinsic value (Option)
Difference between option price and intrinsic value, essentially time and volatility value.
