- Odd lot
- A trading order for less than 100 shares of stock. Compare round lot.
- Indicates a willingness to sell at a given price. Related: Bid
- Official statement
- A statement published by an issuer of a new municipal security
describing itself and the issue
- Elimination of a current long or short position by making an opposite
transaction. Related: Buy in, Evening up, Liquidation
- Omnibus account
- An account carried by one futures commission merchant with
another futures commission merchant in which the transactions of two or more
persons are combined and carried in the name of the originating broker, rather than
designated separately. Related: Commission house, Futures commission merchant
- Open contracts
- Contracts which have been bought or sold without the transaction
having been completed by subsequent sale or purchase, or by making or taking actual
delivery of the financial instrument or physical commodity.
- Open-end fund
- Also called a mutual fund, an investment company that stands ready
to sell new shares to the public and to redeem its outstanding shares on demand at a
price equal to an appropriate share of the value of its portfolio, which is computed
daily at the close of the market.
- Open interest
- The total number of futures contracts traded in a given commodity
that have not yet been liquidated either by an offsetting futures transaction or by
delivery. Related: Liquidation
- Open order
- An order to a broker that is good until it is canceled or executed.
- The method of trading used at futures exchanges, typically involving
calling out the specific details of a buy or sell order, so that the information is available
to all traders.
- Opening, the
- The period at the beginning of the trading session officially designated
by the exchange during which all transactions are considered made "at the
opening". Related: Close, the
- Opening price
- The range of prices at which the first bids and offers were made or
first transactions were completed. Related: Range
- Operating cycle
- The average time intervening between the acquisition of materials
or services and the final cash realization from those acquisitions.
- Operationally efficient market
- Also called an internally efficient market, one in which
investors can obtain transactions services that reflect the true costs associated with
furnishing those services.
- Opinion shopping
- A practice prohibited by the SEC which involves attempts by a
corporation to obtain reporting objectives by following questionable accounting
principles with the help of a pliable auditor willing to go along with the desired
- Opportunity costs
- The difference in the performance of an actual investment and a
desired investment adjusted for fixed costs and execution costs. The performance
differential is a consequence of not being able to implement all desired trades.
- Optimal portfolio
- An efficient portfolio most preferred by an investor because its
risk/reward characteristics approximate the investor's utility function. A portfolio that
maximizes an investor's preferences with respect to return and risk.
- 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.
- The right, but not the obligation, to buy or sell an underlying futures contract.
- Original margin
- The margin needed to cover a specific new position. Related: Margin,
Security deposit (initial)
- Option-adjusted spread (OAS)
- The spread over an issuer's spot rate curve,
developed as a measure of the yield spread that can be used to convert dollar
differences between theoretical value and market price.
- Option premium
- The option price.
- Option price
- Also called the option premium, the price paid by the buyer of the
options contract for the right to buy or sell a security at a specified price in the future.
- Option seller
- Also called the option writer, the party who grants a right to trade a
security at a given price in the future.
- Option writer
- Option seller.
- Options contract
- A contract that, in exchange for the option price, gives the option
buyer the right, but not the obligation, to buy (or sell) a financial asset at the exercise
price from (or to) the option seller within a specified time period, or on a specified date
- Options contract multiple
- A constant, set at $100, which when multiplied by the cash
index value gives the dollar value of the stock index underlying an option. That is,
dollar value of the underlying stock index = cash index value x $100 (the options
- Options on physicals
- Interest rate options written on fixed-income securities, as
opposed to those written on interest rate futures contracts.
- A put option with a strike price lower than the underlying futures
price, or a call option with a strike price higher than the underlying futures
price. Related: In-the-Money
- Over-the-counter market (OTC)
- A decentralized market (as opposed to an exchange
market) where geographically dispersed dealers are linked together by telephones and
- Overfunded pension plan
- A pension plan that has a positive surplus (i.e., assets
- Overlay strategy
- A strategy of using futures for asset allocation by pension sponsors
to avoid disrupting the activities of money managers.
- Overnight repo
- A repurchase agreement with a term of one day.
- Overreaction hypothesis
- The supposition that investors overreact to unanticipated
news, resulting in exaggerated movement in stock prices followed by corrections.
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