eFinancialCareers

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 investment strategy 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.

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

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 executes transactions 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-lot investors 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-balance-sheet financing
Financing that is not shown as a liability on a company's balance 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.

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 members trading 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.

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 capital commitment. 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 bond issue with different maturities.

Offering statement
A shortened registration statement required by the Securities and Exchange Commission on debt issues 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.

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 issue securities 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 bond futures. The exchange trades futures and options on the OMX equity index.

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.

On
Used in the context of general equities. Conjunction that denotes trade execution /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 market buy and sell orders, usually before the opening of a stock or market but at times at the close (especially during index expirations). 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.

On-floor order
Used for listed equity securities. Security order 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.

One-decision stock
A quality stock that is not actively traded, 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 risky asset is a linear function of a single factor.

One-man picture
When both bid and the offered prices of a broker come from the same source.

One-share-one-vote rule
The principle that all shareholders should have equal voting rights in public companies 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.

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 debt contract. 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 specialist book and the orders the trader opened up). See: Open on the print, subject.

Open interest
The total number of derivatives contracts traded that have not yet been liquidated either by an offsetting derivative transaction or by delivery. Related: Liquidation.

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 investor cancels it.

Open Policy
A marine cargo insurance policy issued to cover various unspecified exports over the life of the policy.

Open position
A net long 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 fund shareholders buy 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.

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 market transactions 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 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 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 option short or buying an option long). Antithesis of closing transaction. (2) First transaction of the day in a stock.

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, cancelable lease. 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 portfolio yield, 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
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 option positions or trades.

Option agreement
A form that an options investor opening an option account fills out guarantees the investor will follow trading regulations and has the financial resources to settle possible losses.

Option cycle
The cycle of option expiration 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 writer
See: Option seller

Option-adjusted spread (OAS)
(1) 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 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 option contracts.

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 index underlying 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 rate options 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. companies traded 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 of Petroleum Exporting Countries (OPEC)
A cartel of oil-producing countries.

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.

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)