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Glossary of Futures Trading Terms

Terms beginning with 0-9 Terms beginning with A Terms beginning with B Terms beginning with C Terms beginning with D Terms beginning with E Terms beginning with F Terms beginning with G Terms beginning with H Terms beginning with I Terms beginning with J Terms beginning with K Terms beginning with L Terms beginning with M Terms beginning with N Terms beginning with O Terms beginning with P Terms beginning with Q Terms beginning with R Terms beginning with S Terms beginning with T Terms beginning with U Terms beginning with V Terms beginning with W X Terms beginning with Y Z

Glossary terms beginning with O

One Cancels Other (OCO)
A qualifier used when multiple orders are entered and the execution of one order cancels a second or alternate order. For example, with OCO you can place two orders linked to each other, allowing you to place a stop loss order on the same option.
Open-End Fund
A mutual fund that continues to sell shares to investors, and will buy back shares when investors wish to sell.
Opening Transaction
A trade that creates a new position or adds to an existing one. The new position can consist of either short or long options or stock.
Open Outcry
The term used to describe the pit-trading environment in which market makers compete for trades.
Option Chain
A way of quoting options prices through a list of all of the options for a given security, including the various strike prices, expiration dates, and whether they are calls or puts.
Option Clearing Corporation (OCC)
The firm responsible for issuing and standardizing all exchange traded options. The OCC, which serves as an intermediary between buyers and sellers, guarantees that all option contracts are honored and executed according to their terms.
Option Requirements
The balance you must maintain based upon the risk of the options positions in your account. Please review our margin guidelines for more information.
Original Issue Discount (OID)
An original issue discount bond is a bond issued at a price below par value. A zero-coupon bond is an example of an OID.
Over-the-Counter Market (OTC)
A market where products such as foreign currencies are bought and sold by telephone and other electronic means of communication rather than on a designated futures exchange.
OD
Daily range outside the prior day’s range.
Offer
An indication of willingness to sell at a given price, also referred to as an ask, or asking price. The opposite of bid.
Offset
The liquidation of a purchase of futures, forward or other financial instrument through the sale of an equal number of the same delivery months, or the covering of a short sale of futures forward, or other financial instrument through the purchase of an equal number of the same delivery month. Either action transfers the obligation to make or take delivery of the actual financial instrument to someone else.
Omnibus Account
An account carried by one futures commission merchant or financial institution with another where the transactions of two or more persons are combined, rather than designated separately, and the identity of the individual accounts is not disclosed.
Open Interest
The total number of futures contracts or market position of a given commodity which have not yet been offset or fulfilled by delivery of the actual; the total number of open transactions where each transaction has a buyer and a seller.
Open Outcry
Method of public auction for making bids and offers in the trading pits or rings of commodity exchanges.
Open Trade Equity
The unrealized gain or loss on open positions.
Open
The period at the beginning of a trading session during which all transactions are considered made “at the open”.
Opening Range
The range of closely related prices at which transactions took place at the opening of the market; buying and selling orders at the opening might be filled at any point within such a range.
Option buyer
The party who pays a premium to obtain the rights under an option.
Option contract
The right, but not the obligation, to buy or sell a specific quantity of an underlying instrument on or before a specific date in the future. The seller of the option has the obligation to sell the underlying instrument (in the case of a put option) or buy it from the option buyer (in the case of a call option) at the exercise price if the option is exercised.
Option period
The period between the option start date and the expiry date of an option contract.
Option Premium
The money, securities, or property the buyer pays to the writer (grantor) for granting an option contract, thus conveying the rights of the option to the buyer.
Option seller/writer
The party who is obligated to perform if an option is exercised by the option buyer.
Option
An agreement that represents the right to buy or sell a specified amount of an underlying security, a stock, bond, futures contract, etc. at a specified price within a specified time. The purchaser acquires a right, and the seller assumes an obligation. Stock options are traded on several exchanges, including the Chicago Board of Options Exchange, the American Stock Exchange, the Philadelphia Stock Exchange, the Pacific Stock Exchange and the New York Stock Exchange; futures options are traded on all U.S. futures exchanges; over-the-counter options are traded with a wide variety of financial institutions.
Order Execution
The handling of a customer order by a broker, including receiving the order verbally or in writing from the customer, transmitting it to the trading floor of the exchange where the transaction takes place, and returning confirmation (fill price) of the completed order to the customer.
Order to buy
An instruction sent by a client, or his authorized representative, to buy a given quantity of an identified financial instrument under specified conditions.
Order to sell
An instruction sent by a client, or his authorized representative, to sell a given quantity of an identified financial instrument under specified conditions.
Orders
See Limit Order, Market Order, Stop Order.
Original Margin (Initial Margin)
The term applied to the initial deposit of margin money required of clearing member firms by clearinghouse rules.
Out of the Money
A call option with a strike price higher, or a put option with a strike price lower than the current market value of the underlying asset. A put option is out of the money when the price of the underlying is above the option's exercise price. An option contract is out-of-the-money when there is no benefit to be derived from exercising the option immediately.
OB/OS
The overbought/oversold sentiment indicator as described by George Angell. This is a daily indicator of the overbought/oversold nature of the market used to determine if a trader should be a buyer or seller during the session.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

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