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 |
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. |
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. |
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-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. |
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
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. |
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. |
"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. |
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 sid" 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 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 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 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. |
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 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. |
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. |
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 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 cancelled: (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...."). |
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 U.S. 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
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. |
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. |
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. |
Owner's
equity |
| Paid-in capital
plus donated capital plus retained earnings less liabilities. |