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FOREX GLOSSARY

OCO - One Cancels the Other
A contingent order where the execution of one part of the order automatically cancels the other part.

Odd Lot
A non standard amount for a transaction.

OECD
Organisation of Economic Co-operation and Development. Membership is the more than developed countries.

Offer(ask)
The price at which a dealer is willing to sell. The Offer is also called the Ask or Ask Price.

Offered market
Temporary situation where offers exceed bid

Offset
The closing-out or liquidation of a futures position.

Official Settlements Account
A U.S. balance of payments measure based on movement of dollars in foreign official holdings and US reserves. Also referred to as reserve transaction account

Old Lady
Old lady of Threadneedle Street, a term for the Bank of England, the central bank of England.

Omnibus Account
An account maintained by one broker with another in which all of the accounts of the former are combined and carried only in its name, rather than designated separately.

Open Interest
The total number of outstanding option or futures contracts that have not been closed out by offset or fulfilled by delivery

Open Market Operations
Central Bank operations in the markets to influence exchange and interest rates.

Open Order
An order that will be executed when a market moves to its designated price. Normally associated with Good 'til Cancelled Orders.

Open Outcry
A public auction method of trading conducted by calling out bids and offers across a trading ring or pit and having them accepted.

Open Position
The difference between assets and liabilities in a particular currency. This may be measured on a per currency basis or the position of all currencies when calculated in base currency.

Options
An agreement that allows the holder to have the option to buy/sell a specific security at a certain price within a certain time. Two types of options – call and put. A call is the right to buy while a put is the right to sell. One can write or buy call and put options.

Option Class
All options of the same type - calls or puts -listed on the same underlying instrument

Option Contract
A financial contract giving the buyer the right, but not the obligation, to purchase or sell a specific forex contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the buyer pays to the seller for the contract rights is called the "premium."

Option Premium
The amount the buyer pays to the seller for the rights of an option contract.

Option Series
All options of the same class having the same exercise/strike price and expiration date.

Order
An order is an instruction, from a client to a broker to trade. An order can be placed at a specific price or at the market price. Also, it can be good until filled or until close of business.

OTC/Over The Counter
A market conducted directly between dealers and principals via a telephone and computer network rather than a regulated exchange trading floor. These markets have not been very popular. They were never part of the Stock Exchange since they were seen as "unofficial". Each OTC firm operates a market in the shares of a restricted list of (generally small and little-known) companies. Sometimes the dealer simply puts would-be buyers and sellers together but does not take a position in the shares himself. These days OTC trading is seen as "consumer-friendly," meaning that it is interested in getting the buyer and seller the best possible price. Some see this as what share-trading is all about. However, market makers, many of whom create market movements purposefully, feel they are being elbowed out by OTC, and that speculation, arbitrage and "smart-trading" are undermined by the new market.

Out-of-the-Money
An option contract having no intrinsic value.

Outright Deal
A forward deal that is not part of a swap operation

Overnight limit
Net long or short position in one or more currencies that a dealer can carry over into the next dealing day. Passing the book to other bank dealing rooms in the next trading time zone reduces the need for dealers to maintain these unmonitored exposures.

Overhang
A holding of foreign exchange that is temporarily unable to be converted from the reserve currency into other reserve assets.

Overheated (Economy)
Is an economy where high-growth rates placing pressure on production capacity resulting in increased inflationary pressures and higher interest rates.

Overnight Limit
Net long or short position in one or more currencies that a dealer can carry over into the next dealing day. Passing the book to other bank dealing rooms in the next trading time zone reduces the need for dealers to maintain these unmonitored exposures.

Overnight Position
A trade that remains open until the next business day.

Oscillators
Quantitative methods designed to provide signals regarding the overbought and oversold conditions