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Super Finance Glossary

Over 10,000 financial glossary terms...

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Browsing by the letter "O"

Displaying next 140 results of 292
Oporto
Definition: Portugal's derivatives exchange (Bolsa de Derivados do Oporto) trading futures on the ten-year government bond, Portuguese stock index, and three-month interbank deposit rate LISBOR (Lisbon Interbank Offered Rate).
Opportunity Cost Of Capital
Definition: Expected return that is forgone by investing in a project rather than in comparable financial securities.
Opportunity Costs
Definition: The difference in the actual performance of a particular investment and some other desired investment adjusted for fixed costs and execution costs. It often refers to the most valuable alternative that is given up.
Opportunity Line
Definition: Slope of a graph representing portfolios achieved by combining different levels of borrowing and lending with a single risky portfolio. Sometimes called investment opportunity set.
Opportunity Set
Definition: The possible expected return and standard deviation pairs of all portfolios that can be constructed from a given set of assets.
Optimal Contract
Definition: The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost.
Optimal Portfolio
Definition: An efficient portfolio most preferred by an investor because its risk/reward characteristics approximate the investor's utility function. A portfolio that maximizes an investor's preferences with respect to return and risk.
Optimal Redemption Provision
Definition: Provision of a bond indenture that governs the issuer's ability to call the bonds for redemption prior to their scheduled maturity date.
Optimization Approach To Indexing
Definition: An approach to indexing that seeks to optimize some objective, such as to maximize the portfolio yield, to maximize convexity, or to maximize expected total returns.
Optimum Capacity
Definition: The amount of manufacturing output that creates the lowest cost per unit.
Optimum Leverage Ratio
Definition: The borrowing level that maximizes the value of the firm. The cost of capital to the firm is minimized at that same level.
Option
Definition: Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Buyers of call options bet that a stock will be worth more than the price set by the option (the strike price), plus the price they pay for the option itself. Buyers of put options bet that the stock's price will drop below the price set by the option. An option is part of a class of securities called derivatives, which means these securities derive their value from the worth of an underlying investment.
Option Account
Definition: A brokerage account that is approved to hold option positions or trades.
Option Agreement
Definition: A form that an options investor opening an option account fills out guarantees the investor will follow trading regulations and has the financial resources to settle possible losses.
Option Buyer
Definition: The person who buys calls, puts, or any combination of calls and puts.
Option Cycle
Definition: The cycle of option expiration months. The most common cycles are: January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD).
Option Elasticity
Definition: The percentage increase in an option's value, given a 1 percentage point change in the value of the underlying security.
Option Holder
Definition: A person who has an option that has not been exercised.
Option Margin
Definition: The margin requirement for options described in Regulation T and in brokers' individual policies.
Option Mutual Fund
Definition: A mutual fund that buys and sells options for aggressive or conservative investment.
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