Education Glossary

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Term Definition
Oversold

An occurrence where a market's price has fallen sharply, where the decline exceeds the level of it's true value.

Overnight Position

Trading positions that are held overnight, remaining open until the next trading day.

Overbought\Oversold Indicator

A technical analysis decision support tool that identifies when prices for a financial asset have moved too far and/or too fast in either direction. It is calculated through the use of a moving average applied to the difference between advancing and declining issues.

Overbought

An occurrence where a market's prices are unjustifiably high due to extensive demand (buying).

Over the Counter (OTC)

Securities that are traded in a medium (such as a Dealer Network) other than a formal exchange.

Outside Reversal

A daily bar chart pattern where the security's high is higher than the previous trading day.

Out of the Money

When the current price of the underlying security is below the current strike price of the option.

Oscillator

A mathematical model for determining prices where a security is overbought or oversold. By identifying the extreme high and low prices, an oscillator can issue buy and sell signals when market activity nears either level.

Order Flow

Refers to the trade orders sent by brokers to market makers. 

Options Clearing Corporation

A clearing firm collectively owned by the major exchanges of the listed options.

Option Series

A collection of calls and puts that have the same unit of trading, expiration and strike prce on the same underlying security.

Option Class

A collection of options which have the same underlying security.

Option

A trader's right, without obligation, to buy or sell a financial asset at a specific, pre-determined price during a specific time period.

OPG Order

A type of "time in force" order transaction instructing that the trade be executed as close to the open as possible and will only be accepted up to l 9:15am Eastern.

Opening Transaction

The process of initiating a trade to buy or sell a financial instrument.

Opening Range

The price range for the highest bid and the lowest offer during the first few minutes of the Exchange's official open.

Open-End Fund

A type of mutual fund with no limit on the amount of shares issued. A trader purchases shares from the fund directly rather other shareholders.

Open Outcry

The audible communication between professionals on the trading floor of an exchange for bids and offers on a stock or commodity.

Open Interest

The total amount of outstanding contracts (not settled) that are held by traders at the end of each day.

On Balance Volume

Developed by Joseph Granville, this is a technical analysis indicator that tracks volume to predict changes in a financial instrument's price.

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