Archive for the 'O Glossary' Category

Over-the-counter market (OTC)

Over-the-counter market (OTC)

Over-the-counter market (OTC)

A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked together by telephones and computer screens. The market is for securities not listed on a stock or bond exchange. The NASDAQ market is an OTC market for U.S. stocks.



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Oversubscription privilege

Oversubscription privilege

Oversubscription privilege

In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not taken up.



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Oversubscribed issue

Oversubscribed issue

Oversubscribed issue

Investors are not able to buy all of the shares or bonds they want, so underwriters must allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand because of growth prospects.



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Overshooting

Overshooting

Overshooting

The tendency of a pool of MBSs to reflect an especially high rate or prepayments the first time it crosses the threshold for refinancing, especially if two or more years have passed since the date of issue without the WAC of the pool having crossed the refinancing threshold.



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Overreaction hypothesis

Overreaction hypothesis

Overreaction hypothesis

The supposition that investors overreact to unanticipated news, resulting in exaggerated movement in stock prices followed by corrections.



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Overperform

Overperform

Overperform

When a security is expected to appreciate at a rate faster than the overall market.



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Overnight repo

Overnight repo

Overnight repo

A repurchase agreement with a term of one day.



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Overnight delivery risk

Overnight delivery risk

Overnight delivery risk

A risk brought about because differences in time zones between settlement centers require that payment or delivery on one side of a transaction be made without knowing until the next day whether the funds have been received in an account on the other side. Particularly apparent where delivery takes place in Europe for payment in dollars in New York.



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Overlay strategy

Overlay strategy

Overlay strategy

A strategy of using futures for asset allocation by pension sponsors to avoid disrupting the activities of money managers.



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Overfunded pension plan

Overfunded pension plan

Overfunded pension plan

A pension plan that has a positive surplus (i.e., assets exceed liabilities).



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