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Glossary to investment terminology : O

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Odd Lot
This is an amount of shares traded that is less than the stipulated unit. At the Nairobi Stock Exchange, this comprises a trade of 200 shares, or a trade of KES 3,000 in value. When a transaction is less than this it is called an odd lot.

This is the lowest price that an investor is willing to sell their shares for.

Omitted Dividend
This is a dividend which was expected, but which was not declared, usually due to financial difficulties. The company hereby opts to conserve its resources rather than to pay out cash.

Open Ended Investment Company
An open-ended investment company is one which keeps accepting new investors and redeems the funds of those who wish to opt out, as opposed to a close-ended investment company which has a fixed number of investors.

Open Order
This is an order to buy or sell securities that has not been executed or cancelled. This usually happens because some requirement e.g. specified price has not yet been met.

Open Outcry
This refers to a system of trading at the stock exchange floor where brokers shout their bids and offers of securities. A contract is made when one broker cries out that he wants to sell at a certain price and then another broker yells out that he will buy at that same price.

This is the right but not the obligation to buy or sell a specific amount of shares at a specified price at a specified time. A call option gives the right to buy shares whereas a put option gives the right to sell shares. Each option has a buyer called the holder, and the seller called the writer.

Order Imbalance
This is a situation in which buy orders for a particular stock greatly outnumber the sell orders or vice versa, making it impossible to match the orders. It is also referred to as an imbalance of orders.

Over the Counter (OTC) This is a market where shares (or other securities) which are not listed in the main stock exchange are traded. These shares are traditionally those of small companies which do not meet the listing requirements of the exchange. For such transactions, brokers negotiate directly with one another through computer and telephony networks. It is also called off-board trading.

Overheated Market
This is a situation in which too much money is chasing too few shares leading to sharp price rises. This is said to be the last phase of a bull cycle and it usually portends an imminent onset of a bear cycle.

This is a situation in which the demand for shares in an initial public offering exceeds the number of shares issued. In a bull market, good public issues tend to get oversubscribed. See Hot Issue.

Shares are said to be overvalued when the current price is not justifiable when measured by such benchmarks like the price to earnings ratio (P/E ratio). These are usually shares which have caught the investors' fancy resulting in an emotional buying spree.