Obligation Bond:

A municipal bond used to secure a mortgage on property or other physical assets that can be liquidated. The face value of the bond is greater than the value of the property itself.

October Effect:

A theory that postulates that stocks will tend to decline during the month of October.

Offering:

In the most general sense, the issue or sale of a security by a company. It is often used in reference to an initial public offering (IPO) when a company’s stock is made available for purchase by the public but it can also be used in the context of a bond issue.

Open-End Fund:

A mutual fund that continues to sell shares to investors and will buy back shares when investors wish to sell.

Operating Cash Flow (OCF):

The cash generated from the operations of a company, generally defined as revenues less all operating expenses, but calculated through a series of adjustments to net income. The OCF can be found on the statement of cash flows.

Operating Earnings:

Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue.

Optimization:

In the context of technical analysis, it is the process of adjusting one’s trading system in an attempt to make it more effective. These adjustments include changing the number of periods used in moving averages, changing the number of indicators used, or simply taking away what doesn’t work.

Option:

A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time or on a specific date.

Options Contract:

One options contract represents one hundred shares in the underlying stock. The quoted price of an option is per share.

Organization of Petroleum Exporting Companies (OPEC): An organization consisting of the world’s major oil-exporting nations, OPEC was founded in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.

Outperform:

An analyst recommendation meaning a stock is expected to do slightly better than the market return.

Overnight Trading:

The buying or selling of currencies between 9pm and 8am local time. This type of transaction occurs when an investor takes a position at the end of the trading day in a foreign market that will be open while the local market is closed. The trade will be executed sometime that evening or early morning.

Overvalued:

A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a company’s financial strength.