Traders Glossary

Explore, learn, and discover all trading-related terms here in our comprehensive glossary.

OBV

An indicator that measures the opening buying volume of particular options.Where the reading is positive, more opening calls are being bought than opening puts, and vice versa.

OEX

Standard & Poor's 100 Stock Index.

Offer

The lowest price at which someone is willing to sell.Also can refer to the "Ask" of a "Bid-Ask" spread. See "Ask".

On the Money (At the Money)

See "ATM" or "At the Money".

Open Interest

The total number of options or futures contracts that are not closed or delivered on a particular day.

Open Outcry

Verbal system of floor trading still used at many exchanges (eg the CME and CBOT).

Opening

The beginning of the trading session at an exchange.

Opportunity Cost

The risk of an investment expressed as a comparison with another competing investment.

Option

A security which gives the buyer the right, not the obligation to buy (call) or sell (put) an underlying asset at a fixed price before a predetermined date.

Option Premium

The price of an option.

Option Writer

The seller of an option (usually naked).

Out of the Money (OTM)

Where the option has no intrinsic value and where you cannot exercise an option for a profit.

Out of the Money (OTM) Calls

OTM Calls are where the current stock price is less than the Call Strike Price.

Out of the Money (OTM) Puts

OTM Puts are where the current stock price is greater than the Put Strike Price.

OVI

An indicator that measures options transaction activity by way of Implied Volatility, Open Interest and Options Volume.The OVI ranges from +1 to -1.A persistently positive reading typically correlates with a bullish market, and a persistently negative reading typically correlates with a bearish market.The OVI is best used in conjunction with a chart pattern such as a bull flag, bear flag, or an approach towards support or resistance.

Par

The nominal value of a bond that is paid back to the bondholder at maturity.

Position Delta

The sum of all positive and negative deltas within a hedged trade position.

Premium

The price of an option.

Price Bar

The visual representation of a securities price fluctuations for a set period of time. Price bars can be for as little as 1 minute (or less) and as much as one year (or more).

Price Earnings Ratio

The price of a stock divided by the Earning per share for that stock.The same figure can be calculated by dividing the market capitalisation of a stock by the profit of that company.