Glossary

Please click the terms to see the explanation.
Source: Deutsche Börse AG

Early-stage financing
Early-stage financing is used to fund various activities during the seed and start-up phases, e.g. writing up a business plan, creating the first prototypes, and commencing with production and sales operations.
eb.rexx indices
The eb.rexx® index family represents the market for fixed-interest securities denominated in euros, which are traded on the Eurex® Bonds platform and have a maturity of at least 1.5 years.

eb.rexx indices comprise the most liquid government bonds, collateralized bonds and sub-sovereigns.
ebB (Price Addendum)
A price addendum is a code that is added to the price in floor trading. It states in what way the respective order situation is to be taken into account as the price is fixed. This information is part of the tick data. ebB stands for "etwas bezahlt Brief" (partially paid, offers) and indicates that only a small portion of the sell orders limited at the price determined could be executed.
ebG (Price Addendum)
A price addendum is a code that is added to the price in floor trading. It states in what way the respective order situation is to be taken into account as the price is fixed. This information is part of the tick data. ebG stands for "etwas bezahlt Geld" (partially paid, bids) and indicates that only a small portion of the buy orders limited at the price determined could be executed.
EBIT
EBIT is an earnings ratio. It provides an indication of a company's operative earning power independent of its capital structure.  
EBITDA
EBITDA is a profit ratio. It indicates the operative earning power of a company, independent of its capital structure or propensity to invest.
ECN (electronic communication network)
ECNs are alternative private trading systems in the US. They are permitted to access the Nasdaq system provided they fulfill the following requirements, which were laid down by the US Securities and Exchange Commission (SEC) in January 1997:

Price information must be disseminated on an ongoing basis. The ECN must provide for limit book management or ongoing auctions. Customer orders must be (automatically) matched and executed.  

Moreover, the operators of the ECN must guarantee that they will forward the best available market maker orders to the Nasdaq system. Customers can view the ECN order book via a terminal or the internet. If a participant places an order through an ECN, the ECN attempts to execute the order in its own order book; if this is not possible, the order can be forwarded to Nasdaq or to another ECN. Orders are released from the system for only a brief period of time (e.g. 90 seconds) so that the ECN's own order book will remain sufficiently liquid. The obligation to ensure the best execution of customer orders is intended to prohibit an ECN from matching orders internally when the trade could be executed at a more favorable price in other markets. Thus, ECNs must link their order book with other markets to guarantee best execution.
Economic indicators
The indicators provide information as to the overall economic situation and its expected future development. Economic indicators are subdivided into early indicators, present indicators and late indicators. The early indicators include the ifo Business Climate index, the ZEW Economic Expectations and the Consumer Confidence index.
Elasticity (warrants)
Elasticity is calculated by multiplying the leverage of the warrant by its delta. Synonym: Gearing
Electronic exchange
An electronic exchange is a trading platform in which order entry and forwarding, matching of buy and sell orders, and price determination are performed by a computer. In most cases, the system also includes functions for clearing and settlement procedures, market supervision, and the publication of relevant information.

Unlike a trading floor, which requires the physical presence of participants, an electronic exchange can be accessed from any location. Trading can take place 24 hours a day, or during established hours. The advantages of an electronic exchange are low costs, error-free settlement, quick reaction times, flexible markets and access from anywhere in the world.

Germany has two electronic exchanges: Eurex® for derivatives, and Xetra® for the cash market. Participants in an electronic exchange must be admitted to electronic trading.
Employee shares
Employee shares are created when the company either undertakes a capital increase, or buys back its own stock on the stock exchange. They are usually issued at a preferential price that is substantially lower than the market price. Once purchased, the shares are usually frozen for a period of up to five years before they can be sold. From the point of view of the company, one advantage of issuing employee shares is that staff will have a greater personal stake in the company's performance. Moreover, such shares are increasingly being used as a component of flexible employee compensation systems, and thus as a way of motivating workers. When staff member purchase an employee share at the preferential price, the resulting non-cash benefit is tax-free, provided it does not exceed half of the market value of the stock, or €150. In addition, the shares must be held at least six years.
Entry Standard
Entry Standard is a transparency standard within the Open Market (Regulated Unofficial Market) with additional requirements. Companies in Entry Standard must meet the following criteria and publish on their website:

significant company news or circumstances that may be significant for the valuation of the respective stock/issuer

the audited consolidated financial statements and management report (respective national accounting principles or IFRS) no later than six months after the end of the reporting period

a brief, up-to-date profile of the company and a calendar of company events

an interim report no later than three months after the end of the first half.

Inclusion in Entry Standard does not equal admission to a regulated market in the sense of article 2, para. 5 of WpHG (German Securities Trading Act). In Entry Standard, the provisions for organized markets do not apply. This particularly concerns the following stipulations:

admission to the stock exchange (article 3, para 2 of AktG – German Stock Corporation Act)

obligation to publish ad-hoc announcements (article 15 of WpHG – German Securities Trading Act)

notification when threshold levels are reached (article 21 of WpHG – German Securities Trading Act)

mandatory offer in the case of a change of control (WpÜG – German Securities Takeover Act)

publication of a prospectus in the case of a private placement (article 3 of WpPG – German Securities Prospectus Act)

Therefore, Entry Standard is primarily aimed at qualified investors in the sense of article 2, para. 6 of WpPG (German Securities Prospectus Act), who are able to assess and accept the potential risks related to the investment in shares of the respective organization. Investors must be aware of the fact that this part of the Open Market (Regulated Unofficial Market) on the Frankfurt Stock Exchange is not subject to the high Europe-wide transparency standards and strict provisions for investor protection on organized markets.
Estimated price
An exchange broker will estimate the price of a security if there are no open buy or sell orders for that security. An estimated price is indicated with the letter "T", which stands for the German term "Taxe".
ETF (exchange-traded fund)
The abbreviation, ETF, stands for exchange-traded fund and refers to index trackers tradable on the stock exchange. The two main features of ETFs:

Transparent portfolio The composition of ETF portfolios is published on a daily basis. Thus, investors are provided with a continuous overview of the weighting of individual shares in the portfolio, which is based on the closing prices from the previous trading day.

Creation/redemption ETFs have a so-called creation and redemption mechanism, which allows professional market participants to exchange share baskets with the same composition for the ETF from the investment company. 

On the Frankfurt Stock Exchange, ETFs are listed in the XTF® segment and can be traded continuously on Xetra® or in floor trading. There is no front-end load for investors.
Euribor (European interbank offered rate)
On 1 January 1999, the Euribor was introduced as the new European reference rate. It replaces the national reference rates of all EU member countries (e.g. the Fibor in Germany), with the exception of London's Euro-Libor. The Euribor is calculated daily at 11:00am by Telerate in Brussels on the basis of the individual interest rates of selected European banks. The highest and the lowest rates are not taken into account in the calculation in order to arrive at a representative reference rate.
Euro
On 1 January 1999, the euro became the official currency of all countries participating in European Economic and Monetary Union. As of 1 January 2002, the first new euro banknotes and coins were be issued to replace the notes and coins of the individual EU countries. The national currencies of the member countries were ceased to be legal tender on 1 June 2002. The sub-unit of the euro is the cent, with 100 cents to one euro (€). Banknotes are issued in denominations of €5, €10, €20, €50, €100, €200 and €500; coins are issued in denominations of €0.01, €0.02, €0.05, €0.10, €0.20, €0.50, €1 and €2. The official exchange rate of euro to Deutschmark is 1.95583 – in other words, €100,000 is equivalent to DM195,583.
Euro Stoxx 50

The Euro Stoxx 50 index was introduced at the beginning of 1998 by Deutsche Börse AG in conjunction with Bourse de Paris, the Swiss Stock Exchange and the Dow Jones company. It is calculated as a price index and a performance index in euros and dollars. The base date is 31 December 1991 = 1,000.

The criteria for including a company in the index are market capitalization and trading volume of the European companies.
Until 1 March 2010 the index was named Dow Jones Euro Stoxx 50.

European-style option
Antagonism: American-style option.
Ex-day
With regard to dividend payments, the ex-day for German shares is generally the day after the general shareholders meeting, at which the dividend is set. Investors who have acquired a stake up to one day prior to the ex-day will be paid the dividend. Expected dividend payments are accordingly priced into the share’s price, i.e., they can lead to gains before the ex-day and a subsequent decline on that day. For mutual funds, the right to a disbursement of fund shares is separated on the ex-day. If investors acquire shares in the fund after that day, but prior to the actual disbursement, they pay a price that is reduced by the amount of the disbursement but do not, however, get the subsequent disbursement. The ex-day is generally one day prior to the actual disbursement.
Exchange Operating Board
Members of the Exchange Operating Board (Börsengeschäftsführung) are appointed and dismissed by the Exchange Council, in conjunction with the Exchange Supervisory Office. Section 3e of the German Stock Exchange Act stipulates that one or more persons can be appointed to the Börsengeschäftsführung for a maximum term of five years; a second term is also allowed. Business managers represent the exchange both in and out of court. The Exchange Operating Board is above all responsible for deciding which participants are to be admitted to exchange trading, regulating the organization of the exchange, handling business matters, and ensuring that trading takes place smoothly. To this end, it has the power to suspend or temporarily interrupt trading.
Exchange rate
The exchange rate indicates how much of a given currency (e.g., the respective national currency) must be paid in exchange for one unit of a different currency. As a rule, the exchange rate is determined on the basis of supply and demand, although it can also be fixed. The mexican Peso, for example, has a fixed exchange rate in relation to the US-Dollar.
Exchange Supervisory Office
The Exchange Supervisory Office (Börsenaufsichtsbehörde) ensures that stock exchanges comply with the relevant laws, as well as with the detailed legal regulations and directives, and monitors whether trading and settlement procedures are duly performed. It also has the authority to require trading participants or the exchange to furnish information or documents, or conduct audits as it sees fit. Section 1a of the German Stock Exchange Act authorizes the Exchange Supervisory Office to impose regulations on the stock exchange and its participants for the purpose of promoting proper trading and settlement procedures. Section 2a of the German Stock Exchange Act stipulates that the Exchange Supervisory Office must enforce compliance with the Law Against Restraints on Competition. In doing so, it pays particular attention to whether participants have fair access to trading, information and settlement systems, and other exchange-related services. The Exchange Supervisory Office can engage the services of a state commissioner to supervise trading on the exchange. In practice, however, Trading Surveillance (HÜSt) usually performs this function, although the Exchange Supervisory Office has the power to take charge of an inquiry or investigation at any time.
Exchange trader
Exchange traders conclude transactions on the exchange in the name of and for the account of their employer, or on behalf of a third party.

In order to be admitted to trading, exchange traders must demonstrate that they possess the necessary aptitude and sense of responsibility for trading on the exchange in an exam administered by the board of examiners at FWB® Frankfurter Wertpapierbörse (Frankfurt Stock Exchange). Traders who are active only in currency trading are not required to take the exam.

Exchange traders are permitted to trade only on behalf of their employer or a third party, and may not participate in own-account trading. In floor trading, each trader can represent only one firm; in electronic trading, one exchange trader can act on behalf of several firms.
Exchange turnover
For instance, the daily exchange turnover comprises all transactions executed (traded shares x respective price) during a trading day.
Exercise (warrants)
American options can be exercised on any bank business day during the entire exercise period. By contrast, European options can only be exercised on the expiration date. In some cases, the terms and conditions of the warrant stipulate that the warrant can only be exercised during a very specific time frame.
Exercise (warrants)
American options can be exercised on any bank business day during the entire exercise period. By contrast, European options can only be exercised on the expiration date. In some cases, the terms and conditions of the warrant stipulate that the warrant can only be exercised during a very specific time frame.
Exercise period (warrants)
As a rule, the right to exercise a warrant expires several days prior to the end of the official exercise period; at the same time, the warrant ceases to be eligible for trading on the exchange.
Exercise price
The exercise price is specified in the options contract.
Exercise ratio
Number of units of an underlying instrument that a warrant holder can purchase or sell by exercising the warrant
Exercise ratio (warrants)
Number of units of an underlying instrument that a warrant holder can purchase or sell by exercising the warrant.
Exhaustion gap
Exhaustion gaps occur in market situations in which almost all investors have already invested in or sold a stock at which point supply and demand are both equally low. In such situations a slightly higher offer or demand result in relatively greater price losses or gains.
Exit
Venture capital companies are usually very well-informed with respect to the earnings position of the company in which they have invested. If it becomes known that a venture capital company wishes to sell its participation in a company, potential buyers are often suspicious – and with good reason. For this reason, venture capital companies have four exit options: buyback, trade -sale, secondary purchase, and Going Public.
Exotics
The innovative powers of issuers seem to know no boundaries. They meet the demands of investors with new constructions of warrants and other leverage products. The names of these exotic issues are just as creative: Knock-ins, corridor, hamster, chooser and turbo warrants and even CLICK warrants. Above average chances to make profits are countered by above average risks up to losing everything.
Expiry
If the warrant has an intrinsic value, the option right must be exercised by this date at the latest; otherwise, the warrant expires without value.
Expiry date
The expiry date is the last day on which an investor can exercise an option right or warrant right to buy the respective equity at the strike price. After the expiry date has passed, the option right expires without value.

Terms:Triple witching day