What Is an Excess Margin Deposit? An excess margin deposit is the collateral held in a margin account that is in excess of the minimum level required to maintain that account’s good standing. Margin traders who fail to maintain excess margin deposits may find themselves subject to margin calls. Key Takeaways In margin trading, the
What is an Excess Profits Tax? An excess profits tax is a special tax that is assessed upon individual or corporate income beyond a specified amount of return on invested capital, usually in excess of what is deemed to be a normal income. An excess profits tax can be implemented with the intention of reducing
What Is an Exchange? An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments, and other groups a platform
What Is Exchangeable Debt? An exchangeable debt is a type of hybrid debt security that can be converted into the shares of a company other than the issuing company (usually a subsidiary). Companies issue exchangeable debt for a number of reasons, including tax savings and divesting a large stake in another company or subsidiary. Key
What Are Exchange Controls? Exchange controls are government-imposed limitations on the purchase and/or sale of currencies. These controls allow countries to better stabilize their economies by limiting in-flows and out-flows of currency, which can create exchange rate volatility. Not every nation may employ the measures, at least legitimately; the 14th article of the International Monetary Fund’s
What are Exchange Fees Exchange fees are a type of investment fee that some mutual funds charge to shareholders if they transfer to another fund within the same group. Other fees shareholders may encounter include sales loads, redemption fees, purchase fees, account fees, 12b-1 fees, and management fees. BREAKING DOWN Exchange Fees Exchange fees are
What Is Exchange of Futures for Physical? An exchange of futures for physical (EFP) is a private agreement between two parties to trade a futures position for the basket of underlying actuals. An exchange of futures for physicals can be used to open a futures position, close a futures position, or switch a futures position
What Is Exchange Privilege? Exchange privilege is the opportunity given to mutual fund shareholders to exchange their investment in a fund for another within the same fund family. This privilege can be used for a number of market strategies. Key Takeaways Exchange privilege is the opportunity given to mutual fund shareholders to exchange their investment
What Is an Exchange Rate? An exchange rate is a rate at which one currency will be exchanged for another currency and affects trade and the movement of money between countries. Exchange rates are impacted by both the domestic currency value and the foreign currency value. In July 2022, the exchange rate from U.S. Dollars
What Is the Exchange Ratio? The exchange ratio is the relative number of new shares that will be given to existing shareholders of a company that has been acquired or that has merged with another. After the old company shares have been delivered, the exchange ratio is used to give shareholders the same relative value
