I Need the Definition of...
Financial dictionary terms starting with “o”
Also known as the more generic "health care reform," Obamacare refers to the Patient Protection and Affordable Care Act (PPACA; signed into law on March 23, 2010) -- and to a lesser degree, the Health Care and Education Reconciliation Act of 2010, bo See More.
Objective probability is the chance that a specific thing will occur. See More.
An obligation is a legal requirement to fulfill a responsibility. In the finance world, this often involves making specific payments by specific dates and/or ensuring that a company meets certain performance requirements. See More.
An obligor is a person or entity legally required to provide a payment, service, or other benefit to another person or entity (the obligee). See More.
Obsolescence risk is the risk that a company's product or service will become obsolete or out of date. See More.
Obsolete inventory is inventory that is essentially useless and/or unsellable. See More.
Occupancy fraud occurs when a mortgage borrower lies to a bank about his or her intention to occupy the home that he or she is purchasing with the mortgage. See More.
Occupancy rate is the ratio of rental units rented versus the total number in the building, city, state, etc. See More.
Occupational labor mobility is the ease with which a workforce can switch industries, retrain for new jobs and transfer to other sectors. See More.
An ocean bill of lading is a receipt and invoice between a carrier and a shipper. See More.
The October Effect is the theory that stock prices will fall in the month of October. See More.
Odd dates are arbitrary maturity dates that do not necessarily correspond to the duration of the bond, option, futures contract, forward contract or other maturing instrument. Odd dates are also called broken dates. See More.
Odd days interest refers to interest earned on loans that close on any day other than the standard day the lender requires interest and principal payments. See More.
An odd lot is an order for anything less than 100 shares. This is the opposite of a "round lot," which are orders in multiples of 100 shares. However, thinly traded stocks sometimes trade in 10-share increments. See More.
The odd-lot theory states that an increase in odd lot activity is a buy signal in a market. See More.
An odd-lotter buys securities in odd lots. An odd lot is a group of shares that is not a multiple of 100 (100 shares is called a round lot). See More.
OEX is the ticker symbol of index options on the S&P 100, which trade on the Chicago Board Options Exchange (CBOE). See More.
Off balance sheet refers to items that are effectively assets or liabilities of a company but do not appear on the company's balance sheet. See More.
The New York Stock Exchange is commonly referred to as the Big Board. Accordingly, "off board" refers to trades of stocks that occur outside major exchanges. See More.
Off-balance-sheet financing is an accounting method whereby companies record certain assets or liabilities in a way that keeps them from appearing on the balance sheet. See More.
An off-floor order is an investor's request to a broker to buy or sell securities. See More.
Off-premise banking refers to regular banking transactions that happen outside of a physical bank, typically at automated teller machines (ATMs). See More.
An off-the-run Treasury is any Treasury bill or note that is not part of the most recent issue of the same maturity. See More.
An off-the-run Treasury yield curve is a yield curve based on the maturities, prices, and yields of Treasury bills or notes that are not part of the most recent issue of Treasury securities. See More.
Offensive competitive strategy therefore refers to those strategies that companies adopt to stay ahead of the competition rather than react to the competition. See More.
An offer is a communication of interest in buying or selling an asset. In other contexts, it might refer to the act of making something available for sale. See More.
An offer in compromise is an arrangement between a taxpayer and a taxing authority, whereby the taxing authority agrees to let a taxpayer settle a tax debt for less than the full amount. See More.
An offering memorandum is a legal document that discloses the terms, conditions, risks, and other information about a private placement. It is not the same thing as a prospectus (those are for issuances of publicly-traded securities). See More.
An offering price is the price at which a company lists its shares, bonds or other securities on an exchange. See More.
The Office of Federal Housing Enterprise Oversight (OFHEO) is a defunct regulatory body that ensured the financial safety of Freddie Mac and Fannie Mae. See More.
The Office of Foreign Assets Control is the entity within the U.S. Treasury Department that creates and enforces trade sanctions. The OFAC used to be called the Office of Foreign Funds Control. See More.
The Office of the Comptroller of the Currency (OCC) is a division of the U.S. Treasury. It regulates and supervises national banks, including domestic branches of foreign banks. The U.S. Treasury created the OCC in 1863 as part of the National C See More.
The Office of Thrift Supervision (OTS) was a regulatory agency that provided oversight to thrift institutions. On July 21, 2011, the OTS became part of the Office of the Comptroller of the Currency (OCC). See More.
Also called an official strike, an official industrial action is a work stoppage by a union. See More.
An official settlement account is an account that records transactions of foreign exchange reserves, bank deposits and gold at a central bank. See More.
An official staff commentary is a set of written answers from the Federal Reserve or the Treasury department regarding various interpretations and regulatory guidance on a myriad of topics. See More.
Also called an official industrial action, an official strike is a work stoppage by a union. See More.
An offline transaction, also known as a signature debit transaction, is a payment method that uses a debit card to transfer funds from a checking account to a merchant across a digital credit card network. See More.
An offset mortgage is a mortgage held in the same bank as the borrower's deposit accounts, savings accounts or other accounts. The mortgage payments are calculated based on the borrower's combined balance. Offset mortgages are not allowed in the Unit See More.
An offsetting transaction is a transaction that cancels out the effects of another transaction. See More.
An offtake agreement is an agreement between a buyer and seller of a resource to purchase or sell products that are yet to be produced. See More.
An oil refinery is a factory that turns crude oil into marketable products such as gasoline, jet fuel, lubricants and heating oils. See More.
Also called tar sands, oil sands are areas of the ground that contain a viscous form of oil called bitumen. See More.
Okun's gap occurs when a country's actual gross domestic product differs from its predicted gross domestic product when applying Okun's law. See More.
Named after economist Arthur Okun, Okun's law states that for every 1% increase in the employment rate, gross domestic product increases 3%. See More.
The Old Age and Survivors Insurance Trust Fund is an account that funds the Old Age Survivors and Disability Insurance Program (OASDI). OASDI, also known as Social Security, is a federal program that provides income and health insurance to retired pe See More.
The Old Age Survivors and Disability Insurance Program (OASDI), also known as Social Security, is a federal program that provides income and health insurance to retired people, the disabled, the poor and other groups. The program started in 1935 with See More.
Old Economy describes an economy or even a group of industries that does not rely on technology or technological advancement. See More.
In the banking world, Old Lady is a nickname for the Bank of England. The full nickname is "Old Lady of Threadneedle Street." See More.
An oligopoly is an economic market whereby a small number of companies or countries generate and control the entire supply of a good or service. See More.
An oligopsony is a market in which only a few buyers purchase all of an industry's output. See More.
Buying things on account is similar to saying, "put it on my tab." Eventually, however, you have to pay the tab. In our example, the transaction requires careful accounting. Once Company XYZ places its order and/or receives the parts, it will See More.
On Balance Volume (OBV) was designed by Joseph Granville to track the flow of volume in and out of a stock or index. Essentially, OBV is a running total of volume. An OBV line typically takes the form of a zig-zag. It can trend up (a bullish sign), d See More.
A One-Cancels-All (OCA) order is a group of limit orders linked together within a brokerage account. If one order is executed, all other linked orders are automatically canceled. See More.
In trading, a one-cancels-the-other order is an instruction given when placing two orders simultaneously. If one part of an order on a security is executed, then the other part is canceled. Such an order is also referred to as an "alternative ord See More.
Most investors have made decisions that they eventually regret. One-night-stand investments are simply decisions that investors regret sooner rather than later, turning what are supposed to be long-term investments into short-term ones. What causes t See More.
One-sided markets can be volatile and very stressful for market makers. Market makers are obligated to facilitate trading in particular stocks even if doing so is inconvenient or less profitable. In our example, it can also be very profitable for mar See More.
A one-stop shop is a single location where all of the needed services for a particular activity are provided. See More.
One-way markets can be volatile and very stressful for market makers. Market makers are obligated to facilitate trading in particular stocks even if doing so is inconvenient or less profitable. In our example, it can also be very profitable for marke See More.
Online banking enables bank customers to handle account management and perform account transactions directly with the bank through the internet. This is also known as internet banking. See More.
An online transaction, also known as a PIN-debit transaction, is a password-protected payment method that authorizes a transfer of funds over an electronic funds transfer (EFT) See More.
In the stock markets, open refers to the beginning of the trading day or the price of a security at the beginning of the trading day. See More.
An open order is an instruction to buy or sell securities that has not been executed or cancelled. Another term used is "backlog order." See More.
Open outcry is a trading mechanism that uses verbal bids and offers. It is usually conducted in trading pits on futures and options exchanges. See More.
Opening bell refers to the beginning of the trading day on an exchange. However, in the United States, only the New York Stock Exchange (NYSE) rings an actual bell every day. See More.
The open is the start of a new day, though it is important to note that that doesn't necessarily mean trading hasn't been going on right before the open. After-hours markets remain open as do other exchanges in other countries and time zones, See More.
Operating cash flow (OCF) is a measure of the cash generated or used by a company in a given period solely related to core operations. OCF is not the same as net income, which includes transactions that did not involve actual transfers of money (depr See More.
Operating cash flow demand (OCFD) is the present value of the minimum amount of cash a capital investment must generate over its life in order to meet the investor's minimum required return. See More.
Operating cash flow margin is cash from operating activities as a percentage of sales in a given period. See More.
The operating cash flow ratio is cash from operating activities as a percentage of current liabilities in a given period. See More.
An operating company/property company deal (opco propco) is a strategy in which a company is divided into at least two parts: a property company that owns all the real estate and assets associated with generating revenues, and an operating company th See More.
Operating costs are key components of operating income calculation (and operating income is a crucial component of many financial measures). Thus, the lower a company's operating costs are, the more profitable it generally is. Several thing See More.
Operating earnings is a measure of profitability that tells investors how much of revenue will eventually become profit for a company. The formula for calculating operating earnings is:Operating Earnings = revenue - cost of goods sold, labor and othe See More.
An operating expense is a day-to-day expense incurred in the normal course of business. These expenses appear on the income statement. See More.
The operating expense ratio (OER) is equal to a company's operating expenses divided by its revenues. The measure is very common in real estate analysis, whereby analysts are measuring the costs to operate a piece of property versus the income it gen See More.
Operating income is a measure of profitability that tells investors how much revenue will eventually become profit for a company. See More.
Operating income before depreciation and amortization (OIBDA) is a measure of the income generated or used by a company in a given period exclusive of the company's capital spending decisions and its tax structure. See More.
An operating lease is simply a lease that does not give the lessee rights similar to those of an owner of the asset. See More.
Operating leverage is the ratio of a company's fixed costs to its variable costs. See More.
Operating margin is a measure of profitability. It indicates how much of each dollar of revenues is left over after both costs of goods sold and operating expenses are considered. The formula is for calculating operating margin is: Operat See More.
Operating netback is a measure used in the oil and gas industry to reflect the net profit on oil and gas after royalties, production, and transportation expenses. See More.
Operating profit is a measure of income that tells investors how much of revenue will eventually become profit for a company. See More.
Operating ratio is the ratio of operating expenses to net sales. Operating ratio is also a common term in the insurance business, where it refers to an issuer's profit from underwriting and investment activities. See More.
Operating revenue is the sales associated with a company's core, day-to-day operations. See More.
Opportunity cost refers to the value forgone in order to make one particular investment instead of another. See More.
An option is a financial contract that gives an investor the right, but not the obligation, to either buy or sell an asset at a pre-determined price (known as the strike price) by a specified date (known as the expiration date). See More.
Option pricing theory is the theory of how options are valued in the market. The Black-Scholes model is the most common option pricing theory. See More.
Options backdating occurs when a company grants an option that is dated prior to the date the company granted the option. See More.
The Options Clearing Corporation (OCC) is a clearinghouse for equity options and is a guarantor of the obligations in listed options contracts. See More.
An options contract is an agreement between a buyer and seller that gives the purchaser of the option the right to buy or sell a particular asset at a later date at an agreed upon price. Options contracts are often used in securities, commoditi See More.
Thanks to an ability to spot undervalued companies and purchase them on the cheap, Buffett has made many people very wealthy over the course of his five-decade career. See More.
An ordinary dividend is a dividend that is not eligible for capital gains tax. See More.
Ordinary income is not a capital gain, dividend or other income subject to special taxation. See More.
The Organization for Economic Cooperation and Development (OECD) is an international economic forum that pursues cooperative approaches to common issues affecting individual members as well as the global community. See More.
Orphan stocks is a colloquial term for stocks that analysts and investors seem to disregard. See More.
"Out of the money" describes an option that is worthless if exercised today. In the case of a call option, the option has no intrinsic value because the current price of the underlying stock is less than the option strike price. In the See More.
Outsourcing is the process of contracting a portion of a company's activities to third-party providers. See More.
Outstanding shares are common stock authorized by the company, issued, purchased and held by investors. See More.
An over the counter security is traded through a dealer network rather than through a centralized, formal exchange (such as the NYSE, Nasdaq, or London Stock Exchange). Assets traded OTC are usually traded by private securities dealers who negotiate See More.
The Over the Counter Bulletin Board (OTCBB) is a quotation service offered by the National Association of Securities Dealers (NASD) that provides quote and volume information for securities traded over the counter (that is, securities not listed on t See More.
The over-the-counter (OTC) market, also known as the over-the-counter bulletin board (OTCBB), is a quotation service offered by the National Association of Securities Dealers (NASD) that provides quote and volume information for securities traded ove See More.
In most states, writing a bad check is at least a misdemeanor, with the consequences growing depending on the state, the amount involved and whether the transaction crosses state lines. Most overdrafts are simply oversights by consumers, so even if t See More.
Overhead refers to the ongoing operating expenses necessary to running a business, but are not attributed to a specific business activity. Also referred to as "indirect costs." See More.
The overnight rate is the interest rate banks charge each other on loans for meeting reserve requirements. The overnight rate is frequently confused with the discount rate, which is the interest rate the Federal Reserve charges on loans from the Fede See More.
Overvalued describes a security for which the market price is considered too high for its fundamentals. Some metrics used to evaluate whether a security is overvalued are: P/E ratio, growth potential, and balance sheet health. The term is the op See More.
Overweight refers to a given security which has been disproportionately allocated in an investment portfolio relative to a benchmark. It is the opposite of underweight. See More.