The Risk Limited Glossary
E:
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Efficient Frontier - a theoretical set of portfolios offering optimal risk-reward tradeoffs.
EDGAR - is a federally registered trademark of the U.S. Securities and Exchange Commission (SEC) and is the acronym for Electronic Data Gathering, Analysis, and Retrieval. EDGAR is the SEC's system used by all public companies to transmit required filings, such as quarterly reports and annual reports and ongoing disclosure obligations. EDGAR filings can be accessed online directly from the SEC or through various online service companies.
EFP - an acronym for Exchange for Physicals; an alternative to physical settlement offered by many futures exchanges. See below.
EITF - an acronym for the Emerging Issues Task Force, a unit of the Financial Accounting Foundation that addresses accounting issues not yet addressed by a published FASB Statement of Financial Accounting Standards.
Electric Power Off-Peak Trading Block - a standard time block in wholesale trading of electricity referring to times of relatively low energy demand on the power grid, typically nights and weekends. The off-peak trading block is usually defined as the 8-hour period beginning at 10 p.m. and ending at 6:00 a.m. (prevailing local time) for five business days per week, Monday through Friday, plus all hours for weekend periods. It represents all hours that are not defined as on-peak. Other negotiated blocks are also traded, such as 'super off-peak' periods, 7x24 [seven days per week, 24 hours per day], 6x16 [six days per week, 16 peak hours per day], and mid-peak.
Electric Power On-Peak Trading Block - a standard time block in wholesale trading of electricity, typically defined as the 16-hour period beginning at 6 a.m. and ending at 10:00 p.m. (from the hour ending 0700 to the hour ending 2200, prevailing local time) for five business days per week, Monday through Friday. Also referred to as 5x16. Other negotiated blocks are also traded, such as 'super on-peak' four hour periods. For U.S. physical market transactions, on-peak definitions may vary by North American Electric Reliability Council (NERC) region. The NYMEX PJM Monthly Financially Settled Peak and Off-Peak Electricity Futures is based on peak hours defined as from 7:00 a.m. to 11:00 p.m. (the hour ending 0800 to the hour ending 2300) prevailing local time, for peak days as Mondays through Fridays, excluding NERC holidays.
Electric Power Trading Day - for trading purposes in designating hours traded, the 24-hour period beginning at midnight and ending at the following midnight.
Embedded Derivatives - within a U.S. accounting context of FAS 133, portions of contracts that meet the definition of a derivative when the entire nonderivative contract cannot be considered a financial instruments derivative. See also FAS 133 and PIPES (Private Investments in Public Equities).
Emissions Credits - the instruments created by regulations in the U.S. market to encourage market-driven reductions of pollution.
Ethanol - ethyl alcohol produced by fermentation and distillation. An alcohol compound with the chemical formula CH3CH20H formed during sugar fermentation by yeast. Also referred to as grain alcohol. Used as a gasoline additive for octane enhancement.
European Option - an option that can only be exercised on its expiration date. See also American Option.
Exchange for Physicals (EFP) - a transaction in which the buyer of a cash commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way, the opposite hedges in futures of both parties are closed out simultaneously.
Exchange Traded - traded on a regulated exchange such as the New York Stock Exchange, Chicago Board of Trade, or New York Mercantile Exchange.
Exercise Price (Strike Price) - the price, specified in the option contract, at which the underlying futures contract, security, or commodity will move from seller to buyer.
Extendable Option - an option whose expiration may be extended.
Extrapolation - estimation of the value of a variable for future times at which the value has not yet been observed. This estimate may be reasonably reliable for short times into the future, but for longer time periods the estimate may become less accurate.
Extrinsic Value - the time value of an option, which reflects the probability that the option may move into the money before expiration.
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