Odd Lot:
Purchase or sale of less than the round lot unit of 100
shares.
Offer / Offer Price:
In the securities business this means the same as ask /
ask price, or the price at which a seller is offering to
sell an option or a stock.
One-cancels-other Order (OCO):
A type of order which treats two or more option orders as
a package, whereby the execution of any one of the orders
causes all the orders to be reduced by the same amount.
For example, the investor would enter an OCO order if
he/she wished to buy 10 May 60 calls or 10 June 60 calls
or any combination of the two which when summed equaled 10
contracts. An OCO order may be either a day order or a GTC
order.
Open Interest:
The total number of outstanding option contracts on a
given series.
Open Order:
Orders that have been placed with the broker but have yet
been executed or canceled.
Open Outcry:
The trading method by which competing market makers and
floor brokers representing public orders short their bids
and offers on the trading floor.
Opening Price:
The price at which a given stock opened for the current
trading day. For weekend days or holidays, this would be
the opening price for the previous trading day.
Opening Transaction:
An addition to, or creation of, a trading position. An
opening purchase transaction adds long options to an
investor's total position, and an opening sale transaction
adds short options. An opening option transaction
increases that option's open interest.
Option Chain:
A list of the options available for the underlying stock
symbol you entered.
Option Cycle:
The time from when an option contract is created by a
writer of that option to the expiration date; sometimes
referred to as an option's "lifetime." See also EXPIRATION
CYCLE.
Option Pricing Curve:
A graphical representation of the estimated theoretical
value of an option at one point in time, at various prices
of the underlying stock.
Option Pricing Model:
See BLACK-SCHOLES
FORMULA.
Option Writer:
The seller of an option contract who is obligated to meet
the terms of delivery if the option owner exercises his or
her right. This seller has made an opening sale
transaction, and has not yet closed that position.
Option:
A contract that gives the owner the right, if exercised,
to buy or sell a security at a specific price within a
specific time limit. Usually, they are traded as
securities themselves, with buyers and sellers trying to
profit from price changes. They are generally available
for 1 to 9 months, with some longer term options (called
LEAPS) also available for selected securities. Stock
option contracts generally carry the right to buy or sell
100 shares of the underlying stock (100 is the
multiplier), although as a result of a merger or
acquisition, it can be different. See also INDEX
OPTION.
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