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- O
- 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
- OCC
- See: Options Clearing
Corporation
- OID
- See: Original issue discount
debt
- OM
- The two-character ISO 3166 country code for OMAN.
- OMR
- The ISO 4217 currency code for the Oman Rial.
- OPEC
- See: Organization
of Petroleum Exporting Countries
- 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.
- 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 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
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.
- 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 US savings
and loan industry.
- Official reserves
- Holdings of gold and foreign currencies
by official monetary institutions.
- Official
statement
- A statement published by an issuer of a
new municipal security describing itself
and the issue
- Official
settlements balance (overall balance)
- An overall measurement of a country's private financial and economic transactions
with the rest of the world.
- 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.
- 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.
- "O.K. to cross"
- Used for listed equity securities. "Legal to cross
the buy and sell orders
on the exchange floor because transactor
is not a principal in the transaction."
- 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 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.
- 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 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 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 the close
order
- A market order that is to be executed
as close as possible to the closing price
of the day.
- 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.
- 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 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.
- 144 stock
- Used in the context of general equities. Restricted
stock.
- One-man picture
- When both bid and the offered prices
of a broker come from the same source.
- 1/f Noise
- See: Anti-Persistence
- Phase Space
- A graph which shows all possible states of a system. In phase space we plot
the value of a variable against possible
values of the other variables at the same time. If a system has three descriptive
variables, we plot the phase space in three dimensions, with each variable
taking one dimension.
- 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.
- 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-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 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-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 (good-till-cancelled)
order (GTC order)
- Order to buy
or sell a security that stays active until
it is completed or the investor cancels it.
- 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.
- Open position
- A net long or short
position whose value will change with a change in prices.
- 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 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.
- 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 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. 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 lease
- Short-term, cancelable lease.
A type of lease in which the contact 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
in the red
- Doing business while losing money.
- 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 internally efficient
market.
- Operations
department
- See: Back office.
- 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 performance of an actual investment and a desired
investment adjusted for fixed costs and execution
costs. When not all desired trades can be
implemented. 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-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.
- 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 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
- 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 interest rate 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, buy 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 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 US See: ADR.
- Organization
chart
- A chart showing the hierarchical interrelationships of positions
within an organization.
- 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 mortgage loans.
- 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 securities offering 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.
- Oslo Stock
Exchange
- An exchange founded in 1819 and trading
stocks, bonds,
and stock options that is considered
the options market
of Norway.
- OTC Bulletin
Board
- An electronic quotation listing of the
bid and asked prices of OTC
stocks that do not meet the requirements to
be listed on the NASDAQ stock-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 capital transactions 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.
- 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-favor industry
or stock
- An unpopular industry or stock that usually
has a low price-earnings ratio.
- 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-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.
- Out of the name
- Used in the context of general equities. To no longer have an active trading
profile/position
in the stock.
- Out of print
- Not open on the print. See:
Clean.
- 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 interest coupons.
- 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 order
bidding for or offering stock
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
- 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's
treasury stock).
- Outstanding
share capital
- Issued share capital less the par
value of shares that are held as the
company's treasury stock.
- Outstanding
shares
- Shares that are currently owned by investors.
- 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 bond exchange.
The NASDAQ market is an OTC market
for US stocks. Antithesis of listed.
- 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
security issue
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.
- 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 commodities contracts
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 commodity position
about to be liquidated.
- Overhanging
Bond
- A convertible bond issue 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) the production
or sale of goods.
- Overheating
- An economy that is growing very quickly, with the risk of high inflation.
- 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's
position 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
- 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 stock
prices followed by corrections.
- 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, especially 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
privilege
- In a rights issue, arrangement
by which shareholders are given the
right to apply for any shares that are not
taken up.
- 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 underwriting spread.
- Overvalued
- A stock price that is seen as too high according
to the company's price-earnings ratio,
expected earnings, or financial condition.
- 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 options strategy that involves
selling call or put
options on stocks
that are believed to be overpriced or underpriced; the options are expected
not to be exercised.
- Own foreign
offices
- US 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.
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