Glossary List O

Obligation

Obligation is the facility provided which allows the traders to sell the shares they have purchased in delivery before those shares get credited to traders demat account.

Obligation bond

Obligation bond is a municipal bond that is used to secure a mortgage on physical assets or properties that can be liquidated.

Obsolete inventory

Obsolete inventory is an inventory that has not seen any sales for a specified time even at the end of the product life cycle.

Occupancy certificate

This is a crucial document that shows that a building has been constructed based on the permitted plan by following local laws.

Odd lot

Odd lot is the order amount for security which is lesser than the normal trading unit for a said asset. Odd lots can have any number of shares in between 1 and 100.

Odious debt

Odious debt is the money that is borrowed by one country from a different country and is then misappropriated by the rulers of the nation. The debt of nation becomes odious debt when the funds borrowed are not used for the benefits of the nation’s citizens.

Offer Document

An Offer Document includes all the relevant information which is similar to a Prospectus in case of a public issue and a Letter of Offer in case of the rights issues that gets filed with ROC and Stock Exchanges.

Off Market

When a transaction gets settled between two parties after mutual agreement and terms without the involvement of stock exchange, it is called as off market transaction.

Omnibus clause

Omnibus clause is an automobile insurance clause which allows extended coverage to those individuals whose names are not included in the insurance policy.

One sided market

One sided market is the market where the market markers need to provide a firm bid and firm ask for every security which they use to make the market. This is also known as a two way market.

OPEC

OPEC, i.e. Organization of Petroleum Exporting Countries is the group that has 12 world’s major oil exporting countries.

Open ended schemes

Open ended schemes are mutual fund schemes that offer new units on a continuous basis to the public. These schemes offer units for sales and no duration for redemption is specified.

Open end mortgage

This is a kind of mortgage which lets the borrower to increase the mortgage amount at a later stage. This lets the borrower borrow more money from a lender if the said conditions are met.

Open interest

Open interest is mostly associated with futures and options and is the total number of future contracts or open options that exist on a given day and get delivered on another specified day.

Open position

Open position is the trade which is entered and is yet to get closed with the opposing trade. This can exist after a buy or after a short position.

Operational risk

Operational risk is the risk that remains after the financing and systematic risks are determined it includes the risks that result from any breakdowns that can occur due to internal procedures or systems or people.

Option chain

Option chain is the list of the put and the call options strike prices. This also includes the premiums for a said maturity period. The option quotes are often displayed as option chains by stock trading platforms.

Option Premium

Option Premium is the income an investor receives after he sells or writes the option contract to another party. This is also used to refer to the present price of any option contract.

Options

Option is the contract which lets the buyer the right but not obligation to sell or to buy an instrument at a said strike price on a said date depending on the kind of option.

Option spread

Option spread is the difference between the option’s strike price and the market value.

Option strategies

Option strategies can be simultaneous and more often mixed and include buying or selling of more than one options that differ in more than one of the options variables.

Option Writer

Option Writer is a seller who sells option or who opens the position to collect the payment of premium from the buyer

Oversubscribed

Oversubscribed is used for those situations in which there is a new security issue when a stock or even a bond gets underpriced or is in a great demand.

Over the counter (OTC)

Over the counter is used for those stocks that are traded via the dealer network. This is also used to refer to those debt securities or other kinds of financial instruments like derivates which too are traded through a dealer network.