Category Archives: N-T

Naked Short Selling

The basic form of short selling is selling stock that you borrow from an owner and do not own yourself. In essence, you deliver the borrowed shares. Another form is to sell stock that you do not own and are not borrowing from someone. Here you owe the shorted shares to the buyer but “fail to deliver.”

Offer Price

The offer price, or the Bid price is what an investor is willing to pay for an investment. It is only an offer and will not be accepted if the seller is not willing to let go at the offer price.

OHLC (Bar) Chart

“OHLC” stands for “Open, High, Low, Close”, and this is a chart designed to help illustrate the movement of a stock’s price over time (typically a trading day, hour, or minute).

Oligopoly

An oligopoly is characterized by a small number of sellers who dominate an entire market. All of the firms who partake in an oligopoly are considered to be very large in terms of profit, size and client base.

Open Interest

Open Interest is the total number of options or futures contracts that are “open”, meaning currently owned by an investor and not yet expired.

Opportunity Cost

“Opportunity Cost” is what needs to be given up to get something. This is different from an item’s price – it refers to what you give up in order to get something. The opportunity cost for going to school is that you can’t stay home and nap. The opportunity cost of staying home to nap is not getting your diploma!

Option Spreads

Options SpreadsĀ are option trading strategies which make use of combinations of buying and selling call and put options of the same or varying strike prices and expiration dates to achieve specific objectives (hedging, arbitrage, etc.).

Options Contract

An Options Contract is a contract which specifies how much of the underlying asset can be bought or sold at a specific price. An option contract to buy the underlying is a call option, and to sell the underlying is a put option. Most stock options contracts represent 100 underlying shares.

Order Types

Market Orders, Limit Orders, Stop Market Orders, Stop Limit Orders and Trailing Stop Orders! Each one is used differently to balance a trading strategy – usually so you can place your orders and wait for prices to match your conditions