Ex dividend

Phrase used to indicate that a stock is selling without a recently declared right or dividend. The ex-rights or ex-dividend date is generally four business days before the date of record

Similar financial terms

Exchangeable bond
An issue giving the bondholder the right to exchange the issue for a specified number of common stock shares of a corporation different from the issuer of the bond.

Exchange-rate risk on bonds
A non-domestic-currency nominated bond has unknown domestic currency cash flows. The domestic currency cash flows are dependent on the exchange rate at the time the payments are received. For example, suppose that a German investor purchases a bond whose payments are in British pounds (GBP). If pounds depreciate relative to euros (EUR), fewer euros will be received and vice versa. This risk is also referred to currency risk.

Exercise price
Price at which the holder of an option can buy (call option) or sell (put option) the underlying stock. Also referred to as strike price.

Expiry date
Maturity or expiration date of an option.

Stock index
A stock index tracks changes in the value of a hypothetical portfolio of stocks. The major stock indices in the world are the NASDAQ Composite, S&P 500 and Dow Jones Index.

AMEX
The American Stock Exchange (AMEX) is the second-oldest U.S. stock exchange, located on Wall Street in New York City. AMEX started as an alternative to the NYSE, the AMEX originating on the curb outside the NYSE, where brokers traded stocks that failed to meet the Big Board's listing requirements. Considerably smaller in market capitalization and trading volume than NASDAQ and the NYSE, the AMEX conducts trading through a centralized specialist system and is home primarily to small and medium-si ...

AMEX Composite
The American Stock Exchange introduced a new AMEX Composite Index with a new ticker symbol, XAX, on 2 January 1997. The XAX is a market capitalization-weighted, price appreciation index, and replaced the AMEX Market Value Index (XAM) which, since its inception, has been calculated on a "total return basis" to include the reinvestment of dividends paid by AMEX companies. The new AMEX Composite Index is more comparable with other major indexes, which reflect only the price appreciation of their re ...

U.S. Dollar Index
The U.S. dollar index is a trade-weighted index of the values of six foreign currencies. At the moment, the index consists of euros (EUR), Japanese yen (JPY), British pounds (GBP), Canadian dollars (CAD), Swedish kronas (SEK) and Swiss francs (CHF).

Exotic option
A non-standardized option

Exposure
The maximum loss suffered from a default by a counterparty.

Exercise limit
The maximum number of option contracts that can be exercised within a five-day period.

Early exercise
The exercise or assignment of an option prior to expiry.

ex
When appended to the share price, means “excluding”. Thus a share price quoted ex dividend (xd or ex div.), implies that you will not receive the announced dividend when you buy the shares. Conversely, you will still receive the dividend when you sell the shares xd, even though you do not hold the shares anymore at the actual time of the dividend payment.

OFEX
An unregulated, off exchange, alternative to the official Stock Market, organised by JP Jenkins Ltd. and targeted at smaller companies, with a potentially higher risk, but consequent prospects of greater return.

The OFEX is an unregulated over-the-counter market established in 1995 by J.P. Jenkins, a broker specialising in smaller companies, and authorised by the Financial Services Authority.

There are around 200 companies listed on OFEX, most of them small, immature companies ...

Herfindahl index
The Herfindahl index (HI) is a measure of industry concentration equal to the sum of the squared market shares of the firms in the industry.

The Herfindahl index is defined as the sum of the squares of the market shares of each individual firm. As such, the index can range from 0 to 10,000, moving from a very large amount of very small firms to a single monopolistic producer. Decreases in the Herfindahl index generally indicate a loss of pricing power and an increase in competition, whe ...

Indirect exchange rate
The required amount of foreign currency required to purchase on unit of domestic currency.

How are you making sex?
What is your market in a particular stock?

Expatriate
A person working or what is known as domiciled (living in) in a country which is not the place of his or her birth or nationality.

Oslo Stock Exchange
In the early 1800s, Norway was a country of farmers and fishermen. Christiania, as the capital city was then called, had just 10,000 citizens. The Norwegian economy was weak, and money was scarce. This had a crushing effect on business and industry, and it was decided that the country needed a commercial exchange to encourage greater commercial activity.

The merchant Nicolay Andresen is generally recognised as the "father" of the Oslo stock exchange. He made the first proposal for a com ...

Breadth index
A measurement of advances and declines in a trading period.

Expiration date
The date on which an option expires, after which the option cannot be exercised.

Extraordinary items
Unusual transactions showing up on a company's financial statement that will not recur every year. Extraordinary items may be restructuring, the writing off of losses due to changes in valuation methods, settlement of lawsuits, exceptionally high profit or loss from foreign exchange, or similar transactions not common for the company.

Accounting exposure
The change in the value of a firm's foreign currency denominated accounts due to a change in exchange rates.

American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades mostly in small-to medium-sized companies.

Annual fund operating expenses
For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.

Treynor Index
Treynor's T is a measure of the excess return per unit of risk, where excess return is defined as the difference between the portfolio's return and the risk-free rate of return over the same evaluation period and where the unit of risk is the portfolio's beta.

Translation exposure
Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates.

Transaction exposure
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.

Tom next
In the interbank market in Eurodollar deposits and the foreign exchange market, the value (delivery) date on a Tom next transaction is the next business day. Refers to "tomorrow next."

Time until expiration
The time remaining until a financial contract expires. Also called time to maturity.

Tax-exempt sector
The municipal bond market where state and local governments raise funds. Bonds issued in this sector are exempt from federal income taxes.

Strike index
For a stock index option, the index value at which the buyer of the option can buy or sell the underlying stock index. The strike index is converted to a dollar value by multiplying by the option's contract multiple.

Stratified sampling bond indexing
A method of bond indexing that divides the index into cells, each cell representing a different characteristic, and that buys bonds to match those characteristics.

Stratified sampling approach to indexing
An approach in which the index is divided into cells, each representing a different characteristic of the index, such as duration or maturity.

Stratified equity indexing
A method of constructing a replicating portfolio in which the stocks in the index are classified into stratum, and each stratum is represented in the portfolio.

Stock index option
An option in which the underlying is a common stock index.

Stock exchanges
In the US, a stock exchange is a formal organization, approved and regulated by the Securities and Exchange Commission (SEC). The SEC are made up of members that use the facilities to exchange certain common stocks. The two major US stock exchanges are the New York Stock Exchange (NYSE) and the American Stock Exchange (ASE or AMEX). Five regional stock exchanges include the Midwest, Pacific, Philadelphia, Boston, and Cincinnati. The Arizona stock exchange is an after hours electronic marketpla ...

Spot exchange rates
Exchange rate on currency for immediate delivery.

Small issues exemption
Securities issues that involve less than $1.5 million are not required to file a registration statement with the SEC. Instead, they are governed by Regulation A, for which only a brief offering statement is needed.

Single index model
A model of stock returns that decomposes influences on returns into a systematic factor, as measured by the return on the broad market index, and firm specific factors.

SIMEX
SIMEX (Singapore International Monetary Exchange) is a leading futures and options exchange in East Asia.

Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and urban renewal agencies.

Risk indexes
Categories of risk used to calculate fundamental beta, including (a) market variability, (b) earnings variability, (c) low valuation, (d) immaturity and smallness, (e) growth orientation, and (f) financial risk.

Return-to-maturity expectations
A variant of pure expectations theory which suggests that the return that an investor will realize by rolling over short-term bonds to some investment horizon will be the same as holding a zero-coupon bond with a maturity that is the same as that investment horizon.

Real exchange rates
Exchange rates that have been adjusted for the inflation differential between two countries.

Rational expectations
The idea that people rationally anticipate the future and respond to what they see ahead.

Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.

Pure expectations theory
A theory that asserts that the forward rates exclusively represent the expected future rates. In other words, the entire term structure reflects the markets expectations of future short-term rates. For example, an increasing sloping term structure implies increasing short-term interest rates. Related: biased expectations theories

Profitability index
The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.

Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the export of big-ticket items by US firms by purchasing at fixed interest rates the medium- to long-term debt obligations of importers of US products.

Positive convexity
A property of option-free bonds whereby the price appreciation for a large upward change in interest rates will be greater (in absolute terms) than the price depreciation for the same downward change in interest rates.

Planned capital expenditure program
Capital expenditure program as outlined in the corporate financial plan.

Philadelphia Stock Exchange (PHLX)
A securities exchange where American and European foreign currency options on spot exchange rates are traded.

Organized exchange
A securities marketplace wherein purchasers and sellers regularly gather to trade securities according to the formal rules adopted by the exchange.

Optimization approach to indexing
An approach to indexing which seeks to optimize some objective, such as to maximize the portfolio yield, to maximize convexity, or to maximize expected total returns.

Operating exposure
Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows.

Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate that has been adjusted for changes in purchasing power.

Nexus (of contracts)
A set or collection of something.

Next futures contract
The contract settling immediately after the nearby futures contract.

New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,000 common and preferred stocks are traded. The exchange is the older in the United States, founded in 1792, and the largest. It is lcoated on Wall Street in New York City

Negative convexity
A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points.

Mutually exclusive investment decisions
Investment decisions in which the acceptance of a project precludes the acceptance of one or more alternative projects.

Membership or a seat on the exchange
A limited number of exchange positions that enable the holder to trade for the holder's own accounts and charge clients for the execution of trades for their accounts.

Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.

London International Financial Futures Exchange
London International Financial Futures Exchange (LIFFE) is a London exchange where Eurodollar futures as well as futures-style options are traded.

Local expectations theory
A form of the pure expectations theory which suggests that the returns on bonds of different maturities will be the same over a short-term investment horizon.

TMWX (Wilshire 5000 Total Market Index)
The TMWX measures the performance of all U.S. headquartered equity securities with readily available price data.

Vancouver Stock Exchange (VSE)
The Vancouver Stock exchange (VSE) was one of Canada's junior company stock exchanges. On March 15, 1999, the VSE and the ASE (Alberta Stock Exchange) agreed to merge and form the CDNX - the Canadian Venture Exchange - which will also take on some junior Toronto and Montreal Exchange companies. The VSE got a bad reputation in the 80's due to many unscrupulous scam artists manipulating VSE listed companies. New regulatory controls and surveillance systems which had been implemented on the VSE wer ...

TSX Index
This is the re-named index tracking the top 60 Toronto Stock Exchange companies. It is managed and promoted by Standard and Poor's. It is generally referred to as the S&P/TSX60.

Junior Stock Exchange
A stock exchange which lists mainly small, emerging companies with low market capitalizations (e.g. under $100million or even under $10 million).

Exit strategy
Refers to the way in which investors and founders can "exit", i.e. leave their company, with a cash return on their investment - e.g. by going public or being acquired or being bought out by other shareholders.

Canadian Venture Exchange (CDNX)
The Canadian Venture Exchange (CDNX) was formed in late 1999 through the merging of the junior exchanges in Canada, i.e. the Vancouver Stock Exchange, the Alberta Stock Exchange, and various "parts" of the other, more senior exchanges (the Toronto Stock Exchange and the Montreal Stock Exchange) as well as the CDN, Canadian Dealing Network (which really isn't a stock exchange but is more like the OTC-BB in the USA, i.e. a market for "unlisted" stocks). The vision for the CDNX was to be the exchan ...

Kuala Lumpur Stock Exchange (KLSE)
Incorporated in 1965 as Kuala Lumpur's stock exchange (although share-trading activity dated from the 1930s).

Bill of exchange
General term for a document demanding payment.

Bond indexing
Designing a portfolio so that its performance will match the performance of some bond index.

Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.

Capital expenditures
Amount used during a particular period to acquire or improve long-term assets such as property, plant or equipment.

Chicago Board Options Exchange (CBOE)
A securities exchange created in the early 1970s for the public trading of standardized option contracts.

Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary functions are to provide a location for trading futures and options, collect and disseminate market information, maintain a clearing mechanism and enforce trading rules.

Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity Exchange, Inc. (COMEX), the New York Mercantile exchange (NYMEX), the New York Cotton Exchange, the Coffee, Sugar and Cocoa exchange (CSC), and the New York futures exchange (NYFE).

Consumer Price Index
The CPI, as it is called, measures the prices of consumer goods and services and is a measure of the pace of U.S. inflation. The U.S. Department of Labor publishes the CPI very month.

Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the issuer's option, into convertible bonds that have the same conversion features as the convertible preferred stock.

Convex
Bowed, as in the shape of a curve. Usually referring to the price/required yield relationship for option-free bonds.

Fishing expedition
An inquiry into an issue without a development plan.

CAC 40 index
A broad-based index of common stocks composed of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse.

Exchange rate overshooting
A phenomenon whereby the exchange rate changes by more in the short run than it does in the long run when the money supply changes.

Unsterilized foreign exchange intervention
A unsterilized foreign exchange intervention is an intervention in which a central bank allows the purchase or sale of domestic currency to affect the monetary base.

Extinguish
Retire or pay off debt.

Extrapolative statistical models
Statistical models that apply a formula to historical data and project results for a future period. Such models include the simple linear trend model, the simple exponential model, and the simple autoregressive model.

Madrid Stock Exchange (Bolsa de Madrid)
The largest of Spain's four stock exchange.

Executor
A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.

Fisher equation of exchange
Fisher's equation of exchange states MV = PT. M is the money supply; V is the velocity of circulation; P is average prices and T is the number of transactions. This equation is in fact an identity as it will always be true. At its simplest level you could imagine an economy that has a money supply of £5. If this £5 is on average used 20 times in a year, it will have generated £100 of spending. In the Fisher equation above M would be equal to £5, V equal to 20 and PT would be £100. This £100 coul ...

Forward exchange rate
The forward exchange rate is a rate for buying foreign exchange at a fixed point in the future. Taking out a forward contract for foreign exchange means that you are agreeing to buy foreign exchange at an agreed rate in the future. The existence of the forward market leads to a considerable amount of speculation.

Fixed exchange rates
A fixed exchange rate system is one where the value of the currency against other currencies remains exactly the same. A fixed exchange rate doesn't stay fixed on its own. Governments have to hold large stocks of foreign exchange, so that they can actively intervene to hold the value of the currency stable. Monetary and fiscal policies will also have to be directed to keeping the rate constant.

NedCo (Non-executive directors committee of BoE)
NedCo is a committee of the non-executive directors of the Bank of England. NedCo was established by the Bank of England Act 1998, and is responsible for reviewing the Bank's performance in relation to its objectives and strategy. They also determine the pay and conditions of the Governor, Deputy Governors and the four independent members of the Monetary Policy Committee.

Extra Dividend
A payment declared or paid by a corporation in addition to its ordinary dividend policy. It can reflect a distribution of profits which are considered extraordinary.

Extrinsic Value
The time value component of an option premium.

Montreal Stock Exchange (MSE)
One of the four major stock exchanges in Canada.

Commodity Price Index
Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities (for example, grains or livestock).

Market Index Deposits (MIDs)
Bank certificates of deposit or deposit notes with a return linked to the performance of an index, usually a stock market index.

Jensen index
Index that uses the capital asset pricing model to determine whether a money manager outperformed a market index. The alpha of an investment or investment manager.

Johannesburg Securities Exchange (JSE)
Established in 1886, the Johannesburg Securities Exchange is the only stock exchange in South Africa. Gold and mining stocks form the majority of shares listed. The discovery of the Witwatersrand goldfields in 1886 and the subsequent formation of mining and financial companies, meant investors needed a facility through which to buy and sell shares. Benjamin Woollan provided that facility when he founded the JSE in November 1887. The JSE was admitted as a member of the Federation Internatio ...

Cum dividend
Phrase used to indicate that a stock is selling with a recently declared right or dividend.

Dividend
Payment made by a firm to its owners, either in cash or in stock. Also referred to as the income component of the return on an investment in stock.

Dividend payout ratio
A ratio showing the percentage of net profits paid out in dividends on common stock, after reducing net profits by the amount of dividends paid on preferred stock.

Dividend yield
A stock's daily percentage summary of yield, calculated by dividing annual dividend per share by the day's closing stock price.

Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to smaller dividends because the dividend is sure but future capital gains are uncertain.

Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends, and hence low payout ratios, because capital gains are effectively taxed at lower rates than dividends.

Stock dividend
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.

Special dividend
Also referred to as an extra dividend. Dividend that is unlikely to be repeated.

Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors about changes in management's expectation about future earnings.

Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable investment opportunities for those funds are currently unavailable.

Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy in a perfect capital market.

Liquidating dividend
Payment by a firm to its owners from capital rather than from earnings.

Cash dividend
A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.

Cumulative dividend feature
A requirement that any missed preferred or preference stock dividends be paid in full before any common dividend payment is made.

Final dividend
The dividend that is paid at the end of the financial year as the final amount of profit has been published, under deduction of the interim dividend which was already paid out.

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Remote disbursement

Technique that involves writing checks drawn on banks in remote locations so as to increase disbursement float.


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