Terms Starting with O

In finance, an offset refers to the process of canceling or nullifying the impact of one asset or liability by using another. It is commonly used to manage risk or reduce exposure.

OASDI is a federal program in the United States that provides financial benefits to retired workers, their families, and disabled individuals.

An oligopoly is a market structure characterized by a small number of firms that dominate the market, leading to limited competition.

An onerous contract is a contract where the costs to fulfill the obligations exceed the economic benefits expected to be received.

Online banking, also known as internet banking, allows users to manage their bank accounts and perform financial transactions digitally via their bank's website or mobile app.

Open market operations (OMO) refer to the buying and selling of government securities in the open market by a central bank to control the money supply and influence interest rates.

Operating income, also known as operating profit, represents the total earnings from a company's core business operations, excluding non-operating income, taxes, and interest expenses.

Operating leverage is a measure of how sensitive a company's operating income is to changes in its sales volume, highlighting the impact of fixed costs on profitability.

Operating margin is a profitability ratio that measures the percentage of profit a company makes from its operations, relative to its revenue.

Operations management involves the planning, organizing, and supervising of production, manufacturing, or the provision of services. It ensures that an organization’s resources are used efficiently and effectively to meet business objectives.

Opportunity cost refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

An option is a financial derivative that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date.

OPEC is an intergovernmental organization of oil-exporting countries that coordinates and unifies petroleum policies among member countries to ensure the stabilization of oil markets.

Organizational Behavior (OB) is the study of how people interact within groups in a workplace setting and how this affects the organization's structure, efficiency, and effectiveness.

Organizational structure refers to the system of hierarchy and arrangement within a company that determines how roles, responsibilities, and authority are distributed.

An Original Equipment Manufacturer (OEM) refers to a company that produces parts and equipment that may be marketed by another manufacturer.

Original Issue Discount (OID) refers to the difference between the par value of a bond at maturity and its lower issue price. It represents the interest earned by the bondholder over the life of the bond.

Out of the Money (OTM) refers to an options contract where the strike price is less favorable compared to the current market price of the underlying asset, making it unprofitable to exercise.

Outsourcing involves contracting out business processes to external parties, often to reduce costs or improve efficiency.

Over-the-counter (OTC) refers to the process of trading securities for companies that are not listed on a formal exchange. Transactions occur via a broker-dealer network as opposed to a centralized exchange.

The Over-The-Counter (OTC) market refers to a decentralized market where trading of financial instruments, including stocks, bonds, and derivatives, is conducted directly between two parties without a central exchange.

An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero, resulting in a negative balance.

Overhead refers to the ongoing business expenses not directly attributed to creating a product or service.

An Overnight Index Swap (OIS) is a financial derivative where two parties agree to exchange, over a set period, the interest earned on a principal amount calculated using a daily overnight rate for a fixed rate of interest.