| O | Fifth letter of a Nasdaq stock symbol specifying that it is the company's second class of preferred shares. |
| OAS | See: Option adjusted spread |
| Oath of Inspectors | A sworn statement signed by the Inspectors of Election, usually notarized, wherein they swear they will impartially and faithfully execute their duties as Inspectors of Election at the annual or special meeting of shareholders. |
| Objective (mutual funds) | The fund's investmentstrategy category as stated in the prospectus. There are more than 20 standardized categories. E.g. Aggressive growth, balanced. |
| Objective probability | The true unobservable underlying odds that something is so. |
| Obligation | A legal responsibility, such as to repay a debt. |
| Obligation bond | A municipal bond with a face value greater than the value of the underlying property. The difference is designed to compensate the lender for costs exceeding the mortgage value. |
| Obligee | The person to whom the obligation is owed, for example the lender. |
| Obligor | The person owing the obligation, for example the borrower. |
| Obligor | A person who has an obligation to pay off a debt. |
| Observational Noise | The error between the true value in a system and its observed value due to imprecision in measurement. Also called Measurement Noise. See: Dynamical Noise. |
| OCC | See: Options Clearing Corporation |
| Occupational lease | A lease of property where the tenant is actually in occupation of it. In a multi-tenanted building there may well be one headlease out of which are granted several occupational leases. |
| Ocean bill of lading | Receipt for a shipment by boat, that includes freight charges and title to the merchandise. |
| Odd lot | A trading order for less than 100 shares of stock. Compare round lot. |
| Odd-Lot Buy Back | An offer made by the corporation or its agent to purchase shares from odd-lot shareholders. |
| Odd-lot dealer | A broker who combines odd lots of securities from multiple buy or sell orders into round lots and executestransactions in those round lots. |
| Odd-Lot Resale | An offer made by the corporation or its agent to purchase shares from odd-lot shareholders and immediately resell them in the market, usually in round-lots to institutions, thus saving the corporation the expense of merely buying shares back. |
| Odd-lot short-sale ratio | The percentage of total odd-lot sales that is composed of short sales. |
| Odd-lot theory | The theory that profits can be made by making trades contrary to odd-lot trading patterns, since odd-lotinvestors have poor timing. This theory is no longer popular. |
| OECD | See: Orgainization for Economic Cooperation and Development |
| OEX index | Applies to derivative products. Quotron symbol for the S&P 100 index option. |
| Off the market | A purchase or sale is made off the market when the property is not publicly marketed. |
| Off-balance-sheet financing | Financing that is not shown as a liability on a company'sbalance sheet. |
| Off-board | Used for listed equity securities. Transacted away from a national securities exchange even though the stock itself is listed, such as on the NYSE, and instead of on the OTC market, a regional exchange, or in the third or fourth markets (between customers directly). After 9:30 a.m., if the stock has not opened due to the exchange's discretion, trading can occur elsewhere, but the trader must assume the role of a quasi-specialist in the process. |
| Off-budget Federal entities | Federally owned and controlled entities whose transactions are excluded from the budget totals under provisions of law. Their receipts, outlays, and surplus or deficit are not included in budget receipts, outlays or deficits. Their budget authority is not included in totals of the budget. |
| Offer | Indicates a willingness to sell at a given price. Related: Bid. |
| Offer price | See: Offer. |
| Offer wanted | Used in the context of general equities. Notice by a potential buyer of a security that he or she is looking for supply from a potential seller of the security, often requiring a capitalcommitment. Antithesis of bid wanted. |
| Offering date | Date on which a new set of stocks or bonds will first be sold to the public. |
| Offering memorandum | A document that outlines the terms of securities to be offered in a private placement. |
| Offering scale | The range of prices offered by the underwriter of a serial bondissue with different maturities. |
| Offering statement | A shortened registration statement required by the Securities and Exchange Commission on debtissues with less than a nine-month maturity. |
| Offerings | Often refers to initial public offerings. When a firm goes public and makes an offering of stock to the market. |
| Off-floor order | Used for listed equity securities. (1) Order to buy or sell a security that originates off the floor of an exchange; customer orders originating with brokers, as distinguished from orders placed by floor memberstrading for their own accounts. Exchange rules require that an off-floor order be executed before orders initiated on the floor. Upstairs order. Antithesis of on-floor order; (2) order not handled on the floor but instead upstairs. |
| Office of Thrift Supervision (OTS) | An agency of the U.S. Treasury department responsible for the U.S. savings and loan industry. |
| Official reserves | Holdings of gold and foreign currencies by official monetary institutions. |
| Official settlements balance (overall balance) | An overall measurement of a country's private financial and economic transactions with the rest of the world. |
| Official statement | A statement published by an issuer of a new municipal security describing itself and the issue. |
| Official unrequited transfers | Include a variety of subsidies, military aid, voluntary cancellation of debt, contributions to international organizations, indemnities imposed under peace treaties, technical assistance, taxes, or fines. |
| Offlake | In the context of project financing, the purchase of the project's output. |
| Offset | Elimination of a long or short position by making an opposite transaction. Related: Liquidation. |
| Offshore finance subsidiary | A wholly owned affiliate incorporated overseas, usually in a tax haven country, whose function is to issuesecurities abroad for use in either the parent's domestic or foreign business. |
| Offshore fund | A mutual fund whose headquarters is based outside the United States. |
| OID | See: Original issue discount debt |
| Old-line factoring | Factoring arrangement that provides collection, insurance, and finance for accounts receivable. |
| Oligopoly | A Market characterized by a small number of producers who often act together to control the supply of a particular good and its market price. |
| Oligopsony | A Market characterized by a small number of large buyers who control all purchases and therefore the market price of a good or service. |
| OM | The two-character ISO 3166 country code for OMAN. |
| OM Stockholm AB | The derivatives market of Sweden, trading a wide variety of interest rate and bondfutures. The exchange trades futures and options on the OMX equityindex. |
| Omitted dividend | A dividend that was scheduled to be declared, but that is not voted by the Board of Directors probably because the company is experiencing financial difficulties. |
| 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. |
| Omnibus Proxy | A list issued by depositories detailing their participants, and their holdings, and authorizing the participants to vote their proxies directly. This type of proxies are issued by Cede & Co. and by certain bank custodians. |
| OMR | The ISO 4217 currency code for the Oman Rial. |
| OMV | See open market value. |
| On | Used in the context of general equities. Conjunction that denotes tradeexecution /indication, usually during a pre-opening look. "Looks 6 on 6000 shares at opening." See: for/at. |
| On a clean up | Used in the context of general equities. Willingness to participate in part of a trade if all of the stock available is spoken for except for the "clean up amount." |
| On balance | Used for listed equity securities. Left over after pairing off other marketbuy and sell orders, usually before the opening of a stock or market but at times at the close (especially during indexexpirations). See: Imbalance of orders. |
| On board | Used in the context of general equities. Long. |
| On Board Ocean Bill of Lading | An ocean bill of lading bearing an on board notation, or words indicating that the merchandise is located aboard the vessel for transportation. These notations must be initialed or signed by an authorized employee or agent of the ship line. |
| On Carriage | Freight costs arising after the cost of principal international freight costs. These are usually inland freight charges for delivery within the buyer's country. |
| On the close order | A market order that is to be executed as close as possible to the closing price of the day. |
| On the money | Used in the context of general equities. In-line, or at the same price, as the last sale. |
| On the opening order | A market order that is to be executed at the price of the first trade of the day. |
| On the print | Used in the context of general equities. To participate in a block trade that has already transpired, as if that customer had been part of the trade originally; often used by a new party looking to participate in a trade that has just happened. See: Open on the print. |
| On the run | The most recently issued (and typically the most liquid) government bond in a particular maturity range. |
| On the sidelines | An investor who decides not to invest due to market uncertainty. |
| On the take | Used in the context of general equities. Price moving upward, because more buyers are taking offerings, causing offerings to vanish and be replaced by higher ones. Antithesis of come in, get hit. |
| On the tape | Used in the context of general equities. (1) Trade printed on the ticker tape; (2) news displayed on Reuters or the Dow Jones News Service. |
| One-decision stock | A quality stock that is not activelytraded, but rather held for its growth potential. |
| One-factor APT | A special case of the arbitrage pricing theory that is derived from the one-factor model by using diversification and arbitrage. It shows that the expected return on any riskyasset is a linear function of a single factor. |
| One-man picture | When both bid and the offeredprices of a broker come from the same source. |
| One-share-one-vote rule | The principle that all shareholders should have equal voting rights in publiccompanies and each shareholder should have one vote. |
| One-way market | (1) A market in which only one side, the bid or asked, is quoted or firm. (2) A market that is moving strongly in one direction. |
| On-floor order | Used for listed equity securities. Securityorder originating with a member on the floor of an exchange when dealing with his or her own account, versus an upstairs order. Antithesis of off-floor order. |
| OPD | Tape symbol showing either the first transaction of the day in a security after a delayed opening or the opening transaction in a security whose price has experienced a large rise or fall from the previous day's closing price. |
| OPEC | See: Organization of Petroleum Exporting Countries |
| Open | Used in the context of general equities. Having either buy or sell interest at the indicated price level and side of a preceding trade. "Open on the buy/sell side" means looking for buyers/sellers (for someone who is a seller/buyer). Antithesis of clean. |
| Open account | Arrangement whereby sales are made with no formal debtcontract. The buyer signs a receipt, and the seller records the sale in the sales ledger. |
| Open book | See: Unmatched book |
| Open contracts | Contracts that have been bought or sold without completion of the transaction by subsequent sale or purchase, or by making or taking actual delivery of the financial instrument or physical commodity. |
| Open depending on the floor | Used for listed equity securities. Having room for a customer buyer or seller contingent on the results of a trade being executed on the floor (i.e., satisfying the specialistbook and the orders the traderopened up). See: Open on the print, subject. |
| Open interest | The total number of derivativescontracts traded that have not yet been liquidated either by an offsetting derivative transaction or by delivery. Related: Liquidation. |
| Open market value | The best price reasonably obtainable given certain assumptions. The Royal Institution of Chartered Surveyors issues guidance to surveyors on how to undertake an open market valuation which is contained in the Red Book. |
| Open on the print | Used in the context of general equities. Block trader's term for a block trade that has been completed with an institutional client and printed on the consolidated tape, but leaves the block trader with stock available (because the trader has taken a long or short position to complete the trade) for new customers who are on the opposite side of the market to the initiating customer. |
| Open order (good-till-cancelled, GTC order) | Order to buy or sell a security that stays active until it is completed or the investorcancels it. |
| Open Policy | A marine cargo insurance policy issued to cover various unspecified exports over the life of the policy. |
| Open position | A netlong or short position whose value will change with a change in prices. |
| Open repo | A repurchase agreement with no definite term. The agreement is made on a day-to-day basis, and either the borrower or the lender may choose to terminate. The rate paid is higher than on overnight repo and is subject to adjustment if rates move. |
| Open up | Used in the context of general equities. Disclose more information (e.g., the exact price and quantity of one's potential interest). See: Put pants on it. |
| Open-end credit | Revolving line of credit that is extended with every purchase or cash advance. |
| Open-end fund | Used in the context of general equities. Mutual fund that continually creates new shares on demand. Mutual fundshareholdersbuy the funds at net asset value and may redeem them at any time at the prevailing market prices. Antithesis of closed-end fund. |
| Open-end lease | A lease agreement that provides for an additional payment at the expiration of the lease to adjust for any change in the value of the property. |
| Open-end mortgage | Mortgage against which additional debts may be issued. Related: Closed-end mortgage. |
| Opening | The period at the beginning of the trading session officially designated by an exchange, during which all transactions are considered made "at the opening." Related: Close. |
| Opening Bank | A bank which establishes a letter of credit. |
| Opening price | The range of prices at which the first bids and offers are made or the first transactions are completed on an exchange. |
| Opening purchase | Creation of or increase in a long position in a given series of options. |
| Opening sale | Creation of or increase in a short position in a given series of options. |
| Opening transaction | Applies to derivative products. (1)Buy or sell transaction that creates a position out of a flat one (writing an optionshort or buying an option long). Antithesis of closing transaction. (2) First transaction of the day in a stock. |
| Open-market operation | Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply. |
| Open-market purchase operation | A systematic program of repurchasing shares of stock in markettransactions at current market prices, in competition with other prospective investors. |
| Open-market rates | Interest rates that are determined in the open market by supply and demand, as opposed to being set by the Federal Reserve Board. |
| Open-outcry | The method of trading used at futuresexchanges, typically involving calling out the specific details of a buy or sell order, so that the information is available to all traders. |
| Operating Assets | Another term for working capital. |
| Operating cash flow | Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. |
| Operating cycle | The average time between the acquisition of materials or services and the final cash realization from that acquisition. |
| Operating expenses | The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. |
| Operating exposure | Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows. |
| Operating in the red | Doing business while losing money. |
| Operating lease | Short-term, cancelablelease. A type of lease in which the contract period is shorter than the life of the equipment, and the lessor pays all maintenance and servicing costs. |
| Operating leverage | Fixed operating costs, which are characterized as leverage because they accentuate variations in profits. |
| Operating profit (or loss) | Revenue from a firm's regular activities less costs and expenses and before income deductions. |
| Operating profit margin | The ratio of operating profit to net sales. |
| Operating rate | The percentage of total production capacity of a company, industry, or country that is being used. |
| Operating ratio | A ratio that measures a firm's operating efficiency. |
| Operating risk | The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. |
| Operationally efficient market | Market in which investors can obtain transactions services that reflect the true costs associated with furnishing those services. Also called an efficient market. |
| Operations department | See: Back office. |
| Opex | See: Operating Expenses |
| Opinion shopping | Attempts by a corporation to attain reporting objectives by following questionable accounting principles, with the help of an auditor willing to sanction the practices. Prohibited by the SEC. |
| OPM | Stands for "other people's money," which refers to borrowed funds used to increase the return on invested capital. |
| Oporto | Portugal's derivatives exchange (Bolsa de Derivados do Oporto) trading futures on the ten-year government bond, Portuguese stock index, and three-month interbank deposit rate LISBOR (Lisbon Interbank Offered Rate). |
| Opportunity cost of capital | Expected return that is forgone by investing in a project rather than in comparable financial securities. |
| Opportunity costs | The difference in the actual performance of a particular investment and some other desired investment adjusted for fixed costs and execution costs. It often refers to the most valuable alternative that is given up. |
| Opportunity line | Slope of a graph representing portfolios achieved by combining different levels of borrowing and lending with a single risky portfolio. Sometimes called investment opportunity set. |
| Opportunity set | The possible expected return and standard deviation pairs of all portfolios that can be constructed from a given set of assets. |
| Optimal contract | The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost. |
| 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. |
| Optimal redemption provision | Provision of a bond indenture that governs the issuer's ability to call the bonds for redemption prior to their scheduled maturity date. |
| Optimization approach to indexing | An approach to indexing that seeks to optimize some objective, such as to maximize the portfolioyield, to maximize convexity, or to maximize expected total returns. |
| Optimum capacity | The amount of manufacturing output that creates the lowest cost per unit. |
| Optimum Leverage Ratio | The borrowing level that maximizes the value of the firm. The cost of capital to the firm is minimized at that same level. |
| Option | A right to acquire property (a call option) or to require somebody to purchase property (a put option) at a given price. Usually options are limited in time. |
| Option | Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Buyers of call options bet that a stock will be worth more than the price set by the option (the strike price), plus the price they pay for the option itself. Buyers of put options bet that the stock's price will drop below the price set by the option. An option is part of a class of securities called derivatives, which means these securities derive their value from the worth of an underlying investment. |
| Option account | A brokerage account that is approved to hold optionpositions or trades. |
| Option agreement | A form that an optionsinvestor opening an option account fills out guarantees the investor will follow tradingregulations and has the financial resources to settle possible losses. |
| Option cycle | The cycle of optionexpiration months. The most common cycles are: January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD). |
| Option elasticity | The percentage increase in an option's value, given a 1 percentage point change in the value of the underlying security. |
| Option holder | A person who has an option that has not been exercised. |
| Option margin | The margin requirement for options described in Regulation T and in brokers' individual policies. |
| Option mutual fund | A mutual fund that buys and sells options for aggressive or conservative investment. |
| Option not to deliver | In the mortgage pipeline, an additional hedge placed in tandem with the forward or substitute sale. |
| Option premium | The option price. |
| Option price | Also called the option premium; the price the buyer of the options contract pays for the right to buy or sell a security at a specified price in the future. |
| Option Pricing Curve | A graphical representation of the projected price of an option at a fixed point in time. It reflects the amount of time value premium in the option for various stock prices, as well. The curve is generated by using a mathematical model. The delta (or hedge ratio) is the slope of a tangent line to the curve at a fixed stock price. See also Delta and Hedge Ratio |
| 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 series | A group of options on the same underlying security with the same exercise price and maturity month. |
| Option spread | The trading of options of the same class at the same time in order to profit from changes in the size of the spread between different options. |
| Option to tax | The common phrase for an election to waive exemption for VAT purposes. Some property transactions are subject to VAT. Others are exempt unless the owner opts to waive the exemption. If the owner opts to waive the exemption on any supply of that property, for example a sale or a lease, VAT is charged at the standard rate (currently 17.5%). By opting to tax the tax payer will be able to recover any input tax suffered by it in relation to the property. An example is rent paid in respect of constructing a property which is later leased or sold. It is possible to revoke an option, but only in limited circumstances, ie within 30 days if no tax has been reclaimed or after 20 years. A lender inherits the borrower’s VAT status in relation to a property if it seeks to enforce its security. |
| Option writer | See: Option seller |
| Option-adjusted spread (OAS) | (1) The spread over an issuer'sspot rate curve, developed as a measure of the yieldspread that can be used to convert dollar differences between theoretical value and market prices. (2) The cost of the implied call embedded in an MBS, defined as additional basis-yield spread. When added to the base yield spread of an MBS without an operative call produces the option-adjusted spread. |
| Optional dividend | A dividends that the shareholder can elect to receive either in cash or in stock. |
| Optional payment bond | A bond whose principal and/or interest may be paid in foreign or domestic currency at the discretion of the bondholder. |
| Options Clearing Corporation (OCC) | Applies to derivative products. Financial institution that is the actual issuer and guarantor of all listed optioncontracts. |
| 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 (expiration date). |
| Options contract multiple | A constant, set at $100, that when multiplied by the cash index value gives the dollar value of the stock indexunderlying an option. That is the dollar value of the underlying stock index = Cash index value x $100 (the options contract multiple). |
| Options on physicals | Interest rateoptions written on fixed income securities, as opposed to those written on futures contracts. |
| Or better | Used in the context of general equities. Indication on the order ticket of a limit order to buy or sell securities at a price better than the specified limit price if a better price can be obtained. Does not imply a not-held order, but rather puts more emphasis on executing at the limit if available. |
| Oral contract | A contract not recorded on paper or on computer, but made vocally which is usually enforceable. |
| Order | Instruction to a broker/dealer to buy, sell, deliver, or receive securities or commodities that commits the issuer of the "order" to the terms specified. See: indication, inquiry, bid wanted, offer wanted. |
| Order Book Official | The exchange employee in charge of keeping a book of public limit orders on exchanges utilizing the "marker-maker" system, as opposed to the "specialist system", of executing orders. See also Market-Marker and Specialist. |
| Order imbalance | Orders of one kind for a stock not offset by the opposite orders, which causes a wide spread between bid and offer prices. |
| Order Parameter | In a nonlinear dynamic system, a variable-acting link a macrovariable, or combination of variables-that summarizes the individual variables that can affect a system. In a controlled experiment, involving thermal convection, for example, temperature can be a control parameter; in a large complex system, temperature can be an order parameter, because it summarizes the effect of the sun, air pressure, and other atmospheric variables. See: Control parameter. |
| Order room | The brokerage firm department receives and processes all orders to buy and sell securities. |
| Order splitting | Breaking up orders so that they can be processed as small orders for execution by SOES. Prohibited by NASD. |
| Order ticket | A form detailing an order instruction that a customer gives an account executive. |
| Ordering Costs | Costs that occur when an order is placed regardless of the size of the order. |
| Ordinary income | The income derived from the regular operating activities of a firm or individual. |
| Ordinary interest | Interest based on a 360-day year instead of a 365-day year, resulting in what can be a significant difference. |
| Ordinary shares | Apples mainly to international equities. Shares of non-U.S. companiestraded in their individual home markets. Usually cannot be delivered in the U.S. See: ADR. |
| Organic growth | Refers to growth achieved by internal investments of the firm. This could be the day to day business of the firm or a division of the firm starting a new business from scratch. This is distinguished from growth by acquisition or merger which involves an outside firm. |
| Organization chart | A chart showing the hierarchical interrelationships of positions within an organization. |
| Organization for Economic Cooperation and Development (OECD) | An organization of industrialized countries formed to promote the economic health of its members and to contribute to worldwide development. |
| Organization of Petroleum Exporting Countries (OPEC) | A cartel of oil-producing countries. |
| Organized exchange | A securities marketplace where purchasers and sellers regularly gather to trade securities according to the formal rules adopted by the exchange. |
| Original face value | The principal amount of a mortgage as of its issue date. |
| Original issue discount debt (OID debt) | Debt that is initially offered at a price below par. |
| Original Issue Discount securities (OIDS) | Bonds on which the coupon rate is set considerably below the yield to maturity at the time of issuance so that the bonds are issued at a discount from a par value. |
| Original margin | The margin needed to cover a specific new position. Related: Margin, security deposit (initial). |
| Original maturity | Maturity at issue. For example, a five-year note has an original maturity of five years; one year later it has a maturity of four years. |
| Origination | The making of mortgageloans. |
| Originator | A bank, savings and loan, or mortgage banker that initially made a mortgage loan that is part of a pool. Also, an investment bank that has worked with the issuer of a new securitiesoffering from the beginning and is usually appointed manager of the underwriting syndicate. |
| Orphan stock | A stock that is ignored by research analysts and as a result may be trading at low price earnings ratios. |
| Osaka Securities Exchange (OSE) | Established after World War II, one of the three major securities markets in Japan. |
| OSE | See: Osaka Securities Exchange |
| Oslo Stock Exchange | An exchange founded in 1819 and trading stocks, bonds, and stock options that is considered the optionsmarket of Norway. |
| Ostrich clause | The name given to a clause entitling a lender to assume a state of affairs does (or does not) exist without further (or any) investigation. |
| OTC | See outline terms and conditions. |
| OTC | See: Over-the-counter. |
| OTC Bulletin Board | An electronic quotationlisting of the bid and asked prices of OTCstocks that do not meet the requirements to be listed on the NASDAQstock-listing system. |
| OTC margin stock | Shares traded over-the-counter that can be used as margin securities under Regulation T. |
| Other capital | In the balance of payments, other capital is a residual category that groups all the capitaltransactions that have not been included in direct investment, portfolio investment, and reserves categories. It is divided into long-term capital and short-term capital and, because of its residual status, can differ from country to country. Generally speaking, other long-term capital includes most nonnegotiable instruments of a year or more, like bank loans and mortgages. Other short-term capital includes financial assets that can be liquidated in less than a year such as currency, deposits, and bills. |
| Other current assets | Value of noncash assets, including prepaid expenses and accounts receivable, due within one year. |
| Other income | Income from activities that are not undertaken in the ordinary course of a firm's business. |
| Other long-term liabilities | Value of leases, future employee benefits, deferred taxes, and other obligations not requiring interest payments that must be paid over a period of more than one year. |
| Other sources | Amount of funds generated during the period from operations by sources other than depreciation or deferred taxes. Part of free cash flow calculation. |
| OTM | See: Out of the money. |
| Out | Used in the context of general equities. (1) No longer obligated to an order, as it has already been canceled: (2) advertised on Autex. |
| Out of line | A stock price that is too high or too low in comparison with similar-quality stocks in the same industry, according to its price/earnings ratio. |
| Out of print | Not open on the print. See: Clean. |
| Out of the name | Used in the context of general equities. To no longer have an activetradingprofile/position in the stock. |
| Out there | Used in the context of general equities. Indication gained from their trading and inquiry activity that buyers and/or (more often) sellers are in the market and should be found to get their order. "Feels like IBM is 'out there'." |
| Out with | Used in the context of general equities. Showing of an inquiry to another broker by a customer ("he's out with...."). |
| Outlays | Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interestcoupons. |
| Outline terms and conditions | Usually non-binding statement of the basis on which a lender will make a loan to the borrower A precursor to the facility letter or loan agreement. |
| Out-of-favor industry or stock | An unpopular industry or stock that usually has a low price-earnings ratio. |
| Out-of-the-money option | A call option is "out of the money" if the strike price is greater than the market price of the underlying security. That is, you have the right to purchase a security at a price higher than the market price, which is not valuable. A put option is out of the money if the strike price is lower than the market price of the underlying security. |
| Outperform | In general, this means to do better than some particular benchmark. Mutual Fund XYZ is said to outperform the S&P500 if its return exceeds the S&P500 return. However, this language does not take risk into account. That is, one might have a higher return than the benchmark in a particular year because of higher risk exposure. Outperform is also a term used by analysts to describe the prospects of a particular company. Usually, this means that the company will do better than its industry average. Related: underperform. |
| Outright quote | A quote in which all the digits of the bid and offer prices are quoted. See: Points quote. |
| Outright rate | Actual forward rate expressed in dollars per currency_unit, or vice versa. |
| Outside director | A director of a company who is not an employee of that company and brings in outside experience to help make board decisions. |
| Outside market | Used in the context of general equities. Outside the inside market (above the lowest offering and below the highest bid). |
| Outside of you | Used for listed equity securities. Another orderbidding for or offeringstock at the same price that the trader has put on the floor himself, represented by another broker in the trading crowd. These orders may have different price limits (possible top or low on floor mentioned to floor broker but not announced in the crowd). See: Matching orders. |
| Outsourcing | The transfer of support and ancillary functions of a business to specialist contractors for a fee. |
| Outsourcing | Purchasing a significant percentage of intermediate components from outside suppliers. |
| Outstanding | Used in the context of general equities. Stock held by shareholders (verses the company'streasury stock). |
| Outstanding Dividends | Dividendchecks which have been mailed to shareholders of record but not yet cashed. Funds are held until the check is paid, reissued or escheated to the state as abandoned property. |
| Outstanding share capital | Issued share capital less the par value of shares that are held as the company'streasury stock. |
| Outstanding shares | Shares that are currently owned by investors. |
| Over rented | Where the current or passing rent exceeds the estimated rental value. This has recently occurred in leases where there are upwards-only rent reviews. A review conducted at the top of the market will fix the rent reflecting those market conditions. Notwithstanding a subsequent fall in the market the rent remains at the level set, in excess of the open market rent. It may take some considerable time for the market to reach that rental level again. |
| Overage | Additional payments to be made on the occurrence of a contingent event. It may be extra rent above a base figure paid by reference to what the tenant receives from a sub-tenant or it may be part of the profit a developer makes. A land owner will sometimes sell land to a developer for a fixed price plus the right to receive overage. For example, if the developer is able to secure a more valuable planning permission. |
| Overage | Apples mainly to convertible securities. Difference between how much common stock one party must sell and the other wishes to buy for the same amount of convertible in a swap. |
| Overall FTC limitation | A limitation on the FTC equal to foreign source income times US tax on worldwide income divided by worldwide income. |
| Overall market price coverage | Total assets less intangibles divided by the total of the market value of the securityissue and the book value of liabilities and issues having a prior claim. This is used to determine how much of the market value of a certain class of securities would be covered in liquidation. |
| Overbought | Used in the context of general equities. Technically too high in price, and hence a technical correction is expected. See: Heavy. Antithesis of oversold. |
| Overbought-oversold indicator | An indicator that attempts to define when prices have moved too far and too fast in either direction and thus are vulnerable to reaction. |
| Overcapitalization | Said to occur when a firm cannot service its debt even though its debt/equity ratio is not excessive. |
| Overdraft | Provision of instant credit by a lending institution. |
| Overdraft checking account | A checking account associated with a line of credit that allows a person to write checks for more that the actual balance in the account, with a finance charge on the overdraft. |
| Overfunded pension plan | A pension plan that has a positive surplus (i.e., assets exceed liabilities). |
| Overhang | Used in the context of general equities. Sizable block of securities or commoditiescontracts that, if released on the market, would put downward pressure on prices; prohibits buying activity that would otherwise translate into upward price movement. Examples include shares held in a dealer's inventory, a large institutional holding, a secondary distribution still in registration, and a large commodityposition about to be liquidated. |
| Overhanging Bond | A concertible bondissue that investors do not convert into common stock because the stock has not appreciated in value. |
| Overhead | The expenses of a business that are not attributable directly to the production or sale of goods. |
| Overheating | An economy that is growing very quickly, with the risk of high inflation. |
| Overinvestment | In corporate finance, this refers to managers not acting in the best interests of the shareholders and investing too much (potentially in negative net present value projects). |
| Overissue | An excess of issued shares over authorized shares. |
| Overlap the market | Used in the context of general equities. Create a crossed market by expressing a willingness to sell on the bid side of the market and buy on the offer side. |
| Overlapping debt | The portion of debt of political subdivisions or neighboring special districts that a municipality is responsible for. |
| Overlay strategy | A strategy of using futures for asset allocation by pension sponsors to avoid disrupting the activities of money managers. |
| Overnight delivery risk | A risk brought about because differences in time zones between settlement centers require that payment or delivery on one side of a transaction be made without knowing until the next day whether the funds have been received in an account on the other side. Particularly apparent when delivery takes place in Europe for payment in dollars in New York. |
| Overnight position | A broker-dealer'sposition in a security at the end of a trading day. |
| Overnight repo | A repurchase agreement with a term of one day. |
| Overperform | To appreciate at a rate faster than appreciation of the overall market. |
| Overreaching | The concept that a sale by the trustees of a property extinguishes rights of beneficiaries under the trust. Where a property is owned by a nominee a lender may require the appointment of a second trustee to ensure all beneficiaries’ rights are overreached. Also the effect which a sale by a prior mortgagee has of vesting a property in a purchaser free of subsequent charges. |
| Overreaching | Used in the context of general equities. Creating artificial volume in a stock through activity not generated by normal/natural buyers and sellers in the market. |
| Overreaction hypothesis | The supposition that investors overreact to unanticipated news, resulting in exaggerated movements in stockprices followed by corrections. |
| Overrun | In the context of project financing, the amount of capital expenditures or funding above the original estimate to complete the project. |
| Overshooting | The tendency of a pool of MBS to reflect an especially high rate of prepayments the first time it crosses the threshold for refinancing, specially if two or more years have passed since the date of issue without the weighted average coupon of the pool crossing the refinancing threshold. |
| Oversold | Used in the context of general equities. Technically too low in price, and hence a technical correction is expected. Antithesis of overbought. |
| Oversubscribed issue | Investors are not able to buy all the shares or bonds they want, so underwriters must allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand because of growth prospects. |
| Oversubscription | The excess number of shares or bonds that investors want to buy but are not available due to high demand. |
| Oversubscription privilege | In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not taken up. |
| over-the-counter (OTC) | A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked by telephones and computer screens. The market is for securities not listed on a stock or bondexchange. The NASDAQ market is an OTC market for US stocks. Antithesis of listed. |
| Over-the-Counter Option | An option traded off-exchange, as opposed to a listed stock option. The OTC option has a direct link between buyer and seller, has no secondary market, and has no standardization of striking prices and expiration dates. See also Secondary Market. |
| Overtrading | Excessive broker trading in a discretionary account. Underwriters persuade brokerage clients to purchase some part of a new issue in return for the purchase by the underwriter of other securities from the clients at a premium. This premium is offset by the underwritingspread. |
| Overvalued | A stock price that is seen as too high according to the company'sprice-earnings ratio, expected earnings, or financial condition. |
| Overweight | Usually refers to recommendation that leads an investor to increase their investment in a particular security or asset class. The increase is usually with respect to a benchmark. Suppose that U.S. equities compose 40% of the benchmark portfolio. If one thinks the U.S. will outperform, the investor may increase the exposure to U.S. equity to more than 40%. |
| Overwithholding | Deducting and paying too much tax that may be refunded to the taxpayer or applied against the next period's obligation. |
| Overwriting | A speculative option strategy that involves selling call or putoptions on stocks that are believed to be overpriced or underpriced; the options are expected not to be exercised. |
| Own foreign offices | U.S. reporting institutions' parent organizations, branches, and/or majority owned subsidiaries located outside the United States. |
| Owner's equity | Paid-in capital plus donated capital plus retained earnings less liabilities. |
| Ownership-specific advantages | Property rights or intangible assets, including patents, trademarks, organizational and marketing expertise, production technology, and management and general organizational abilities, that form the basis for a company's advantage over other firms. |
