See: Execution; Limit Order; Limit Price; Orders; Order Ticket

Obligation Bond
A mortgage bond that has a face value greater than the underlying property's value. The excess amount is the lender's cost that exceeds the mortgage value.

See: Face Value; General Mortgage Bond

Obligator
Person or organization that has an obligation outstanding. The debtor is legally bound to pay the obligator any interest, if applicable, when due.

See: Debtor; Obligation Bond

OBV (On Balance Volume)
Technical Analysis method that tries to pinpoint when a security's shares are being accumulated (being bought) or are being sold. The on balance volume line and the stock price line are placed on one chart. When the two lines cross, the analyst considers it to be meaningful. When the chart indicates that a security is being accumulated, it is considered a buy signal and when being distributed, a sell signal.

See: Accumulation; Chartist; Technical Analysis; Volume

OCC (Option Clearing Corporation)
Organization equally owned by the exchanges through which the various options exchanges clear their trades. Some of OCC's responsibilities are supervising the listing of options, issuing and guaranteeing option transactions, processing the money transactions, and the assignment of option exercises to writers. The OCC also issues an options prospectus that outlines the rules and risks of trading options.

See: Assignment; Exercise; Options; Option Agreement; Option Writer; Risk

Odd Lot
Any number of shares traded that is less than its normal trading unit (round lot). Typically, an odd lot is 1 to 99 shares with a round lot being multiples of 100 shares. However, certain inactive stocks have round lots of 10 shares, with odd lots being 1 to 9 shares.

See: Normal Trading Unit; Odd Lot Differential; Odd Lot Theory; Round Lot

Odd Lot Differential
An extra charge, usually 1/8 of a point, that dealers may add to purchases and subtract from sales when the order's share quantity is less than the standard trading unit or round lot--also referred to as a "differential".

See: Normal Trading Unit; Odd Lot; Round Lot

Odd Lot Theory
An investment strategy that assumes small investors are always wrong because they react emotionally to the market and are usually guilty of bad timing. In a rising market, a lot of odd lot buying is considered an indication of a technical weakness in the market and a signal to sell. On the contrary, in a declining market, a lot of odd lot selling is seen as an indication of technical strength and a signal to buy. However, studies of odd lot trading have proven that the theory does not have too much substance and that investors trading odd lots of market leader stocks have generally managed to do reasonably well.

See: Odd Lot; Technical Analysis

OEX
Symbol for an option on the Standard & Poor's 100 stock index.

See: Index; Indexing; Options; Standard & Poor's Corporation

Off-Board
Said of listed security transactions that are not executed on a national exchange, or of unlisted security transactions executed over-the-counter.

See: Over The Counter; ThirdMarket

Offer
The price at which a person is willing to sell a security--also called "asked price". In contrast, the bid price is the price at which a person is willing to buy a security. The asked price is always higher than the bid price.

See: Asked Price

Offering Circular

See: Prospectus

Offering Date
The date in which a new issue distribution is available to investors to purchase.

See: Dated Date; Initial Public Offering; New Issue; Public Offering

Offering Price
The price at which a new or secondary distribution of securities is sold to investing public--also called "public offering price".

See: Initial Public Offering; New Issue; Public Offering Price; Secondary Distribution

Off Floor Order
A security order that is initiated off an exchange floor. These customer orders are placed with a broker and are required to be executed before orders that were initiated on the floor (on-floor orders--floor member orders who are trading for their own accounts).

See: Floor; On Floor Order

Office Of Supervisory Jurisdiction (OSJ)
As defined by the National Association of Securities Dealers' (NASD)--a member's parent office(s) that is responsible for supervising an office, or a group of offices.

See: National Association Of Securities Dealers

Official Notice Of Sale
A solicitation published, usually in financial newspapers, by municipalities that requests investment bankers to proffer a competitive bid on its pending bond issue. The notice lists the basic facts about the issue, such as its par value, and names the official who can provide further details.

See: Investment Banker; New Issue; Par Value

Official Statement
A document prepared for a new municipal issue by or for the issuer. It describes the issue, financial details about the issuer and other relevant facts.

See: Issuer; Legal Opinion; Municipal Bond; New Issue

OID (Original Issue Discount)
A new bond issue that is usually offered below par. The bond's value is increased (accreted) over its life from the original discounted price up to par. At the bond's maturity, it will be valued at par. Interest on these types of bonds are not paid until maturity. However, the interest is taxed as it is accreted. An example of an OID is a zero coupon bond.

See: Accretion; Discount; Maturity Date; New Issue; Par; Zero Coupon Security

Omitted Dividend
A dividend that is scheduled to be declared, but has not been voted for by a corporation's board of directors. The board may not vote for the dividend because the corporation is having financial problems and has determined that it is more important to conserve the cash than to pay a dividend to shareholders. Once announced to the public, if the omitted dividend is not expected, the corporation's stock price will usually decline.

See: Director; Dividend