Glossary

E

• Ex - dividend date The first date on which a stock purchase is no longer entitled to receive recently declared benefit, dividend in this case.
• Ex dividend The day on which a dividend paying stock trades without the right to receive the dividend.
• Exchange rate The number of units of one currency that may be purchased with one unit of another currency is termed as the exchange rate between the two currencies.
• Exercise The use of the right by the option holder to purchase the underlying shares at the exercise price if the option is a call, or to sell the underlying shares at the exercise price if the option is a put. Equity options traded on LIFFE are 'American-style' options; they can be exercised by the option holder at any time prior to expiry. When a call is exercised, the writer is obliged to make delivery of i.e. sell the underlying shares at the exercise price of the option and the buyer is obliged to take delivery i.e. buy. When a put is exercised, the writer is obliged to take delivery of i.e. purchase the underlying shares at the exercise price of the option and the buyer is obliged to make delivery i.e. sell.
• Exercise Notice A formal notification to the Clearing House that the holder of a call (put) option wishes to buy (sell) the underlying at the exercise price.
• Exercise price The fixed price per share at which a call option conveys the right to purchase the underlying shares and at which a put option conveys the right to sell the underlying shares. Also referred to as the option strike price. Example: A call option with an exercise price of Rs.260 conveys the right to purchase 1,000 shares at a price of Rs.260per share.
• Exit Load   When an investor wants to withdraw his or her money back from the fund, a kind of redemption charge that the investor is required to pay. The idea behind the levy of such charges is to discourage investors from making an exit from the fund. Exit load is levied as a percentage of NAV. (Also see entry load).  
• Expected Date Expected offering date of issue in registration. This date comes directly from the syndicate desk at the underwriter firm
• Expense Ratio It is the ratio of total expenses to net assets of the fund. Total expenses include management fees, the cost of shareholder mailings and other administrative expenses. A low expense ratio means that the fund is able to maintain the fund at low expenses. As the size of the fund increases, the expense ratio decreases.
• Expiry date The last date on which an option holder can exercise the right conveyed by the option. After that date, the option ceases to exist.