Odd Lot
Anything less than the standard
unit of trading.
Off Balance Sheet Risk
Risk relative to operations that
are not reflected in variation of the institutions assets or liabilities, when
undertaken, but are reflected when profit or loss occurs.
Offer Document
As per SEBI DIP guidelines, offer
document means Prospectus in case of a public issue or offer for sale and
Letter of Offer in case of a rights issue.
Offer For Sale
An offer of securities by
existing shareholder(s) of a company to the public for subscription, through an
offer document.
Offer period
The period between the date of
entering into Memorandum of Understanding or the public announcement, as the
case may be and the date of completion of offer formalities relating to the
offer.
Offer Price
Price at which units in trust can
be bought. It often includes an entry fee. It also refers to the price at which
securities are offered to the public.
Ombudsman
An independent person appointed
to hear and act upon citizen’s complaint about government services. Invented in
Sweden, the idea has been widely adopted. For example, groups of banks,
mortgage lenders and insurance companies in various countries have appointed
ombudsmen to attend to the complaints of their customers. Customers who use the
ombudsman’s (free) service retain their full right to take legal action should
they not agree with the ombudsman’s decision .
Open ended scheme
An open-ended fund or scheme is
one that is available for subscription and repurchase on a continuous basis.
Open interest
The number of contracts
outstanding for a given option or futures contract.
Open market operation
Purchase or sale of government
securities by the monetary authorities (RBI in India) to increase or decrease
the domestic money supply.
Open Order
An order to buy and sell a
security that remains in effect until it is either cancelled by the customer or
executed.
Opening Price
The rate at which the first
transaction in a security is struck after the opening of the market.
Operating Income
Net Sales less cost of sales,
selling expenses, administrative expenses and depreciation. The pre-tax income
from normal operations.
Operational risk
The risk that deficiencies in
information systems or internal controls could result in unexpected losses.
Option
The contractual right, but not
obligation, to buy (call option) or sell (put option) a specified amount of
underlying security at a fixed price (strike price) before or at a designated
future date (expiration date). The option writer is the party that sells the
option. As per the Securities Contract Regulation Act (SCRA), “option in
securities” means a contract for the purchase or sale of a right to buy or
sell, or a right to buy and sell, securities in future, and includes a teji, a
mandi, a teji mandi, a galli, a put, a call or a put and call in securities.
Option premium
The market price of an option
that is paid by an option buyer to the option writer (seller) for the right to
buy (call) or sell (put) the underlying security at a specified price (called “strike
price” or “exercise price”) by the option’s expiration date.
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 spread
A spread is a type of option
position where you buy an option and sell an option and both of them are from
the same option class.
Option Seller
Also called the option writer, the party who grants a right
to trade a security at a given price in the future.
Optional Redemption
An optional call provision reserved
by the issuer that becomes exercisable after a certain number of years from
issue date. This provision allows the clean up of small amounts of remaining
principal with thin marketability.
Order book
It is an ‘electronic book’ that
shows the demand for the shares of the company at various prices.
Original Plan Poison Pill
Also called preferred stock plan.
An early poison pill antitakeover defense in which the firm issues a dividend
of convertible preferred stock to its common stockholders. If an acquiring firm
passes a trigger point of share ownership, preferred stockholders (other than
the large block holder) can put the preferred stock to the target firm (force
the firm to redeem it) at the highest price paid by the acquiring firm for the
target’s common or preferred stock during the past year. If the acquirer merges
with the target, the preferred can be converted into acquirer voting stock with
a market value no less than the redemption value at the trigger point.
OTC (Over the Counter)
A financial transaction that is
not made on an organised exchange. Generally the parties must negotiate all the
details of each transaction or agree to use simplifying market conventions.
Out of the money option
An option is described as being
out of the money when the current price of the underlying is below the strike
or exercise price for a call, and above the strike price for a put. Options can
also be described as being deep out of the money when they are likely to expire
out of the money.
Overtrading
A broker/dealer overpays a
customer for a security to enable the customer to subscribe to another security
offered by that broker/dealer at a higher markup than the loss to be sustained
when the firm sells the customer’s first security at prevailing market prices.
Ownership Flip-in Plan
A poison pill anti-takeover
defense often included as part of a flip-over plan. Target stockholders are
issued rights to purchase target shares at a discount if an acquirer passes a
specified level of share ownership. The acquirer’s rights are void and his or
her ownership interest becomes diluted.
