The following definitions may help you better understand the capital markets. E Equities Common and preferred stocks, which represent a share in the ownership of a company. Equity option An option contract that grants the holder the right to buy or sell a specific number of shares of stock at a specified price during a specific period of time. Escrow Issued stock held separately from free-trading shares until certain conditions are met. European-style option Options that can be exercised only on their expiration date. Ex dividend The holder of shares purchased ex dividend is not entitled to an upcoming already-declared dividend, but is entitled to future dividends. Ex right The holder of shares purchased ex rights is not entitled to forthcoming rights. Exchange offering prospectus (EOP) A form of prospectus that allows a company to conduct a prospectus offering through the facilities of a stock exchange, rather than issuing them directly to the public. The company then applies to list the securities on the exchange. Exercise The act of an option holder who chooses to take delivery (calls) or make delivery (puts) of the underlying interest against payment of the exercise price. Expiration date or warrant right The date at which an option contract expires. This means that the option can't be exercised after that date. Top