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Glossary of Investment Terms: O

Odd Lot
A non standard amount for a transaction.

OECD
Organisation of Economic Co-operation and Development. Membership is the more than developed countries.

Offer
The price at which a seller is willing to sell. The best offer is the lowest such price available.

Offered Market
Temporary situation where offers exceed bid.

Offered Market
Temporary situation where offers exceed bid.

Offset
The closing-out or liquidation of a futures position.

Official Settlements Account
A U.S. balance of payments measure based on movement of dollars in foreign official holdings and US reserves. Also referred to as reserve transaction account.

Old Lady
Old lady of Threadneedle Street, a term for the Bank of England.

Omnibus Account
An account maintained by one broker with another in which all of the accounts of the former are combined and carried only in its name, rather than designated separately.

One Cancels the Other Order (OCO)
A designation for two orders whereby one part of the two orders is executed the other is automatically cancelled.

Open Interest
The total number of outstanding option or futures contracts that have not been closed out by offset or fulfilled by delivery.

Open Market Operations
Central Bank operations in the markets to influence exchange and interest rates.

Open Order
An order that will be executed when a market moves to its designated price. Normally associated with Good 'til Cancelled Orders.

Open Outcry
A public auction method of trading conducted by calling out bids and offers across a trading ring or pit and having them accepted.

Open Position
The difference between assets and liabilities in a particular currency. This may be measured on a per currency basis or the position of all currencies when calculated in base currency.

Option
A contract conferring the right but not the obligation to buy (call) or to sell (put) a specified amount of an instrument at a specified price within a predetermined time period.

Option Class
All options of the same type - calls or puts -listed on the same underlying instrument.

Option Series
All options of the same class having the same exercise/strike price and expiration date.

Original Margin  
See Initial Margin.

OTC
A market conducted directly between dealers and principals via a telephone and computer network rather than a regulated exchange trading floor. These markets have not been very popular. They were never part of the Stock Exchange since they were seen as "unofficial". Each OTC firm operates a market in the shares of a restricted list of (generally small and little-known) companies. Sometimes the dealer simply puts would-be buyers and sellers together but does not take a position in the shares himself. These days OTC trading is seen as "consumer-friendly," meaning that it is interested in getting the buyer and seller the best possible price. Some see this as what share-trading is all about. However, market makers, many of whom create market movements purposefully, feel they are being elbowed out by OTC, and that speculation, arbitrage and "smart-trading" are undermined by the new market.

Out-of-the-Money
A put option is out-of-the-money if the exercise/strike price is below the price of the underlying instrument. A call option is out-of-the money if the exercise/strike price is higher than the price of the underlying instrument.

Outright Deal
A forward deal that is not part of a swap operation.

Overhang
A holding of foreign exchange that is temporarily unable to be converted from the reserve currency into other reserve assets.

Overheated (Economy)
Is an economy where high-growth rates placing pressure on production capacity resulting in increased inflationary pressures and higher interest rates.

Overnight Limit
Net long or short position in one or more currencies that a dealer can carry over into the next dealing day. Passing the book to other bank dealing rooms in the next trading time zone reduces the need for dealers to maintain these unmonitored exposures.

Overnight
A deal from today until the next business day.

Over the Counter
See OTC.

Oscillators
Quantitative methods designed to provide signals regarding the overbought and oversold conditions.