Glossary – Trading

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There are 14 names in this directory beginning with the letter O.
The operations of a financial institution which although physically located in a country, has little connection with that country’s financial systems. In certain countries a bank is not permitted to do business in the domestic market but only with other foreign banks. This is known as an off shore banking unit.

Offer (also known as the Ask price)
The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Offer. The Offer price is also known as the Ask. The Ask represents the price at which a trader can buy the base currency, which is shown to the right in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

If a market is said to be trading ‘offered’, it means a pair is attracting heavy selling interest, or offers.

Offsetting transaction
A trade that cancels or offsets some or all of the market risk of an open position.

On top
Attempting to sell at the current market order price.

One cancels the other order (OCO)
A designation for two orders whereby if one part of the two orders is executed, then the other is automatically cancelled.

One touch
An option that pays a fixed amount to the holder if the market touches the predetermined Barrier Level.

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

Open position
An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal.

A derivative which gives the right, but not the obligation, to buy or sell a product at a specific price before a specified date.

An instruction to execute a trade.

Order book
A system used to show market depth of traders willing to buy and sell at prices beyond the best available.

Over the counter (OTC)
Informal market that does not involve a securities exchange. Specifically used to refer to the NASDAQ dealer market for common stocks.

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