BY
BRIAN W. LEITE
An Insider's Guide to the Real Language of
Trading and Exchanges
Over 2700 Entries
OASYS The Order Allocation System (OASYS) is an electronic post-trade allocation and acceptance service developed by Omgeo. Used to communicate trade and allocation details between institutional investors and broker/dealers.
OB A written abbreviation for or better.
obsolete securities Shares of defunct corporations.
odd lot A quantity of stock that is less than the standard unit of trading on an exchange. Usually less than 100 shares.
odd lot broker/dealer Historically, some broker/dealers specialized in the execution of odd lot orders. Their compensation was referred to as the odd lot differential.
odd lotter A small trader that tends to buy stock in less size than the standard trading unit.
off 1. A slang term for down, as in The market is really coming off here. 2. A slang term for executed, as in ZVZZT, I just saw 100,000 go off at $25.
off the hook A slang term to describe the party that is determined to not be responsible for an error. Opposite of ON THE HOOK.
off the run stock A stock that is not included in a market maker's list of quotes.
off-board trade A trade in a listed stock that takes place away from the floor of a securities exchange. Basically an over-the-counter or upstairs trade in a listed stock. See THIRD MARKET and FOURTH MARKET.
offensive trading strategies Strategies employed by large traders to actively attack traders who front run their orders. See also DEFENSIVE TRADING STRATEGIES.
offer 1. A quote that stipulates the lowest price sellers are willing to accept for a stock (the offer price), and the total amount of stock that is offered at that price (the offer size). As a quote, the offer is expressed as "quantity at price" as in ZVZZT, 100,000 at $25. Also known as the ask. 2. A dealer quote that stipulates a price and the amount of stock that the dealer is willing to offer at that price, as in XYZ, right now I can offer 25,000 at $50. 3. An abbreviation of offer price, as in ZVZZT is $25.10 bid, offered at $25.20.
offer price The lowest price sellers are willing to accept for a round lot of stock. Also called the asked price or asking price. See also OFFER.
offer size The amount of stock that is available for sale at the offer price. See also OFFER.
offer stock Dealer phrase used to indicate a willingness to commit capital in order to attract a large natural buyer. For example, ZVZZT, I've got nothing on the desk right now, but I'd offer stock to start a conversation. See also BID FOR STOCK.
offer wanted An notice of interest made by a potential buyer of a stock in which there are no current offers.
offered ahead A term used to indicate the status of sell limit orders held in a specialist's book at a lower price than your sell order, or at the same price as your order but entered before your order. Such orders are said to have price priority or time precedence. For example, XYZ, I checked with the specialist, and right now there's 10,000 shares offered ahead at a half. See also STOCK AHEAD.
offered away In the context of over-the-counter trading, a term to used stipulate the existence of a asked price equal to (listed stocks) or lower than (over-the-counter stocks) the offer price quoted by the trader making the offer. For example, ZVZZT, right now I can offer stock at $25.60. It looks like it’s offered away at $0.50 though … I can't compete there.
offered down A situation in which a stock is repeatedly offered for sale at a price that is lower than the last sale price. For example, ZVZZT keeps getting offered down. Check with the analyst and see if he's heard any negative chatter today.
offering Making a new issue available to the public through an underwriting.
offering price The net price at which investors are able to purchase shares in an underwriting.
off-floor order 1. An order that originates from a customer that is located off the floor of an exchange. Such orders are distinguished from (and often take precedence over) orders originating from floor members trading for their own accounts. 2. An order that is executed in the upstairs market.
off-floor trader See UPSTAIRS TRADER.
offset To close a position by making an opposite transaction.
off-the-board trade Another term for off-board trade.
OMS An abbreviation of order management system.
on 1. An abbreviation of paired on, as in XYZ is looking $25 on 100,000. 2. Indicates the quantity of the official opening trade on an exchange, as in XYZ opens at $25.50 on 50,000. 3. An abbreviation of on the tape, as in XYZ, you’re on at a quarter.
on a clean up A trade that leaves the seller with a zero net position. Often represents the last piece of a larger block. For example, XYZ, I'd buy 50,000 shares from your seller on a clean up. See also CLEAN UP.
on a scale Systematically placing portions of a larger order at stated price intervals, descending for purchases and ascending for sales. For example, Buy 50,000 ZVZZT on a nickel scale from $25.20 to $25.
on balance 1. The quantity of stock remaining after all marketable buy and sell orders have been paired off against each other. Usually occurs before the opening or at the close. For example, XYZ, paired on 200,000, 50,000 to buy on balance at the open. 2. The net change in a dealer's position at the conclusion of a trading operation. For example, ZVZZT, we traded 200,000 today, on balance we bought about 50,000.
on board A synonym for long, as in XYZ, I've already got 75,000 on board, only 25,000 more to come.
on 'change An historic slang term meaning "on the stock exchange." Often in reference specifically to the London Stock Exchange.
on close order See MARKET ON CLOSE ORDER and LIMIT ON CLOSE ORDER.
on open order See MARKET ON OPEN ORDER and LIMIT ON OPEN ORDER.
on special Describes stocks that are hard to borrow.
on the close order An instruction to buy or sell a specific quantity of stock at the official exchange closing price given a set of parameters. For example, XYZ, sell 25,000 on the close, use an ultimate $49.50 low. Also known as an at the close order. See also MARKET ON CLOSE ORDER and LIMIT ON CLOSE ORDER.
on the hook A slang term to describe the party that is determined to be responsible for an error. Opposite of OFF THE HOOK.
on the hop A slang term meaning "very quickly," as in Give me the ZVZZT trader on the hop.
on the money Industry lingo meaning IN LINE or "at the last sale."
on the opening order An instruction to buy or sell a specific quantity of stock at the official exchange opening price given a set of parameters. For example, XYZ, sell 25,000 on the opening. Also known as an at the opening order. See also MARKET ON OPEN ORDER and LIMIT ON OPEN ORDER.
on the print Industry jargon basically meaning "as part of a larger block trade." For example, ZVZZT, I hear you’re looking to trade 500,000. I'd buy 50,000 on the print. See also PRINT.
on the sidelines A slang term for the location of a trader who does not wish to trade in the current market. For example, ZVZZT, I think I'll wait on the sidelines until the DoJ investigation is completed.
on the take Describes a stock whose price is moving higher because traders are aggressively lifting the offers. For example, This ZVZZT is really on the take. The Street must have seriously liked that news. Opposite of GETTING HIT.
on the tape 1. Industry jargon basically meaning "officially executed and printed to the ticker tape." For example, XYZ, you're on the tape on 50,000 at $25 1/4. 2. Industry slang meaning "on the news wires." For example, I'm seeing some ZVZZT news on the tape right now.
on the wire Literally means "right now on the phone." Basically, a dealer term used to indicate that a firm bid or offer is being provided without a prior need to check liquidity conditions. Sometimes implies that the quote is immediate or cancel. For example, XYZ, I'll buy 100,000 from you at $50 on the wire.
one cancel all/other order An order that consists of limit orders in multiple stocks. When one of the limit orders meets a predetermined condition, all of the other orders are immediately cancelled.
one decision stock A stock that is purchased as a long term investment rather than as a trading vehicle.
one man picture A situation in which the best bid and the best offer both originate from the same trader.
one sided market 1. A quote in which only one side is firm (or even quoted at all). Also known as a one way market. 2. A market in which either buyers or sellers dominate.
one triggers all/other order An order that consists of orders in multiple stocks. Once the primary order is executed, the other orders will be activated.
one way market 1. A quote in which only one side is firm (or even quoted at all). Also known as a one sided market. 2. A market in which prices move strongly in one direction.
on-floor order 1. An order that originates from a member that is located on the floor of the exchange and who is trading for his own account. As distinguished from a customer order originating from off the floor of the exchange. 2. An order that is executed on the floor of an exchange.
ongoing buyer/seller A trader who plans on accumulating/distributing a block of stock using multiple trades over a period of time. Often employs the use of limit orders and scale orders. For example, ZVZZT, we've been an ongoing seller for a week now, and we continue to be a seller. Right now I can offer 50,000 at $25.
online trading Trading through an internet based trading platform provided by a broker/dealer.
opaque market A market that lacks transparency.
OPD As appears on the ticker tape, an abbreviation of "opening delayed."
open 1. The beginning of a trading session. Also called the opening. 2. The first price at which a particular stock trades during a trading session. Also called the opening price. 3. An order that has not been executed or cancelled. 4. A synonym for good 'til cancelled, as in Open buy 10,000 XYZ at $50. See also OPEN ORDER. 5. Establish a trading relationship. Also called open an account. 6. The portion of a block trade that has not been paired naturally, as in ZVZZT, 500,000 for sale, right now we're open on 50,000. See also OPEN ON THE PRINT.
open an account Officially establish a trading relationship.
open around order An instruction to cancel and replace a previous open order with a new open order that contains some alteration to the original order (normally a change in price). For example, Open around buy 10,000 ZVZZT at $25.50 cans $25.
Open Board See Open Board of Stock Brokers.
Open Board of Stock Brokers A stock exchange established in New York City in 1864. From the beginning, the Open Board adopted not only the traditional call market format, but instituted continuous trading in its Long Room as well. Originally, the exchange was open not only to members but also to non-members willing to pay an entrance fee. By 1865, the Open Board was trading significantly more volume than the New York Stock Exchange. The Open Board became the only exchange in the United States (before NASDAQ) to ever truly rival the Big Board. Ultimately merged with the New York Stock Exchange in 1869.
open book market A market that fully displays orders to the public.
open limit order book An order book in which away from the market limit orders can be viewed by the public.
open market A market that is accessible to the public. As distinguished from a market that is restricted to members only. For example, If I can't find some liquidity in one of the dark pools, I'm going to start picking away slowly in the open market.
open on the print Describes a situation in which a block trade has been executed by a dealer and printed to the ticker tape, but the dealer comes out of the trade with a net position and is willing to offer the position to a new customer at the print price. For example, ZVZZT, we're printing 250,000 at a quarter, come out open on 50,000 on the buy side.
open order 1. A good 'til cancelled order, as in Open Buy 50,000 XYZ at $25. 2. Less commonly, a standing order.
open outcry A method of trading in which traders gather in a physical location, often called a trading pit or ring, and openly post verbal bids and offers.
open position A position that has yet to be offset or closed out.
open trade A trade that has yet to be offset or closed out.
open up Trader's lingo meaning "disclose full trading interest." For example, XYZ, I've got size for sale in here. Why don't you try to open up your buyer and see if he's real.
opening The official beginning of a trading session on an exchange.
opening auction The price discovery method employed by specialists on the New York Stock Exchange to determine the official opening price for each stock. The opening print is often a BATCHED TRADE.
opening bell Traditionally on a stock exchange, a bell is rung to signal the beginning of the regular trading session.
opening cross A BATCHED TRADE for a particular stock that is executed in a crossing network at the official exchange opening price, as in I'm going to try to buy a little ZVZZT in the opening cross.
opening look Details provided by a specialist regarding the supply and demand situation for a stock prior to the opening. For example, XYZ is looking $25-$26 or XYZ, paired on 200,000, 50,000 to buy. See also PRE-OPENING INDICATION.
opening only order An immediate or cancel order that is good only for the opening trade of the regular trading session for a particular stock.
opening price The official first price at which a stock trades during a trading session on an exchange.
opening print A synonym for opening trade.
opening trade The first trade in a stock during a trading session on an exchange. Establishes the opening price. Often a batched trade.
operations department The department that provides all of the administrative and clerical functions that support the trading operations of a broker/dealer. These functions include the confirmation, clearance, settlement, and reconciliation of trades, record keeping, and regulatory compliance. Also called the back office.
operator 1. A professional (and often large scale) speculator. 2. A stock manipulator.
option contracts Derivative financial instruments that give the holder the right, but not the obligation, to buy (call) or sell (put) an underlying asset at a fixed price (strike price) for a set period of time. Options are used for hedging, for leverage, for speculation on price movements, for volatility positioning, and in arbitrage operations. Options have non-linear payoffs.
or better (OB) A term used to stipulate that the limit price on a buy order is higher than the current market price, or that the limit price on a sell order is lower than the current market price. Usually implies that the customer is willing to trade fairly aggressively to his limit, but expects more favorable partial executions than his limit price in the process. For example, It looks like ZVZZT is offered small at $25.30 right now. I'd buy 25,000 at $25.40 or better.
order Binding instructions from a customer to a broker/dealer to buy or sell stock within specified parameters.
order anticipator A parasitic trader who profits by either correctly identifying and exploiting the short term moves of other investors and traders or by compelling other investors and traders to trade at unfavorable terms. Examples include front runners and squeezers.
order book A list of live unfilled orders maintained by broker/dealers and exchanges.
order clerk A floor employee of an exchange member or member firm that is charged with receiving and processing orders from customers and upstairs traders to floor brokers.
order driven market A market in which prices are primarily determined through a two sided auction of customer buy and sell orders. Order driven markets often employ the services of specialists to act as auctioneers. In contrast to a QUOTE DRIVEN MARKET.
order entry firm Specifically, a NASDAQ member firm that enters orders into the NASDAQ system for execution by other market participants. A non-market maker.
order exposure problem In order to successfully source liquidity (especially in block size), traders must often reveal their trading interest to the market. However, some market participants will use that information to exploit the exposed party. Exploitive techniques include FRONT RUNNING and MOMENTUM INGNITION.
order flow The aggregate of orders processed by a broker/dealer. For example, The desk has seen a lot more order flow since we started using the balance sheet more aggressively. Not all of it good, unfortunately.
Order Handling Rules Regulations enacted in 1997 by the Securities and Exchange Commission to govern limit order display and quote display by market makers and specialists. The regulations required market makers and exchange specialists to publicly display any customer limit orders in their possession priced more aggressively than their posted quote. It also required market makers and specialists to posts their best quotes publicly instead of only privately. See also LIMIT ORDER DISPLAY RULE and QUOTE RULE.
order imbalance 1. A situation in which orders on one side of the market outweigh orders on the other side to the extent that achieving a clearing price becomes difficult. May result in a temporary trading halt. 2. The difference between the amount of stock bid for and offered for the opening auction/cross or the closing auction/cross on an exchange.
order management system (OMS) A computer system used for order management, data reporting, trade monitoring, position management, and compliance. Examples include the Brass OMS offered by SunGard and the Fidessa OMS.
order preferencing See preferencing.
order presentation Presenting an order to other traders in the market so that they can act upon it.
order presentation system A generic term for any system that presents orders to traders so that they can act upon them.
order priority rules See priority rules.
Order Protection Rule A Securities and Exchange Commission policy established in Rule 611 of Regulation NMS that was designed to ensure that orders on any given trading venue receive an execution price that is no worse than the best price quoted on any other trading venue. In essence, it is intended to limit (or prevent) trade throughs. Specifically, the Rule requires any venue that cannot execute an incoming marketable order at the best prevailing market price to forward the order to the venue that is quoting the best price. Therefore, the Rule (theoretically) homogenizes the prices of stocks across trading venues. It also gives intermarket price priority to AUTOMATED TRADING CENTERS.
order room The department of broker/dealer that receives and facilitates order flow from retail investors. Also called the wire room.
order routing Forwarding orders to the appropriate trading venue.
order routing system Any computer system designed to electronically forward orders to the appropriate trading venue. Examples include OTC LINK, SUPERDOT and SELECTNET. In contrast to an AUTOMATIC EXECUTION SYSTEM.
order splitting Historically, a (prohibited) trading practice employed by SOES bandits to break up large orders into smaller pieces so that each piece would fall within with the maximum individual SOES trade execution size parameters (usually 500 shares or 1000 shares).
order ticket A written (or electronic) customer order that provides detailed trading instructions.
orderly market A market in which two way quotes are continuously provided and where price changes between trades are relatively small.
ordinary shares 1. Another term for common stock. 2. See FOREIGN ORDINARY SHARES.
organized securities exchange See securities exchange.
orphan stock A slang term for a stock that has been largely ignored by Wall Street, as in You never know when today's orphan stock will become tomorrow's darling.
ostrich A slang term for a trader that ignores information that runs contrary to his investment thesis.
OTC An abbreviation of over-the-counter.
OTC Bulletin Board An electronic quotation service for over-the-counter securities maintained by FINRA. See also OTC MARKETS GROUP.
OTCBB An abbreviation of OTC Bulletin Board.
OTC Link The leading electronic inter-dealer quotation and trade messaging system in the over-the-counter securities markets. Developed and operated by OTC Markets Group.
OTC Markets Group The creator and operator of OTC Link, the leading inter-dealer electronic quotation system and trading platform in the over-the-counter securities market. See also OTC PINK, OTCQB, OTCQX, and NATIONAL QUOTATION BUREAU.
OTC Pink An electronic marketplace developed by OTC Markets Group to trade the more speculative over-the-counter securities. Basically, the electronic replacement for the PINK SHEETS. Maintains no financial standards or reporting requirements.
OTCQB An electronic marketplace developed by OTC Markets Group to facilitate the over-the-counter trading of shares of companies that are reporting either with the SEC or a U.S. banking regulator. Such companies are often considered less speculative than those that trade on OTC Pink.
OTCQX An electronic marketplace developed by OTC Markets Group to trade the highest quality over-the-counter securities. Many of these securities represent large foreign firms that chose not to officially list on a U.S. exchange.
other OTC The “market” for securities that are not listed on NASDAQ or on any national securities exchange, nor quoted on OTC Markets or the OTC Bulletin Board. Usually highly speculative or even potentially fraudulent. Also known as the grey market.
out 1. A term used to indicate that a customer has been released from any further obligation regarding a cancelled order, as in ZVZZT, you bought 10,000 at $25.30 too late to cancel, you're out on the balance of 15,000. 2. A term used by a trader to express an indication of interest, as in XYZ, I'm out as a buyer. 3. To no longer hold a position in a particular stock, as in Here is the tag ends of my ZVZZT order, then we're out of the name. 4. To no longer have market commitments, as in Until we get a pullback, I'm out of the market.
out loud The portion of a reserve order that is visible to other market participants, as in I just put 5,000 ZVZZT to buy in the machines, but I only put 200 out loud.
out of balance inventory ACTUAL INVENTORY does not match TARGET INVENTORY at a broker/dealer.
out of bed A slang term to describe a sharp break in prices, as in The earnings report looked reasonably solid, but ZVZZT is completely falling out of bed.
out of favor Unpopular.
out of line Describes a stock that trades at a valuation perceived to be either higher or lower than that of comparable stocks. For example, I love to fade stocks that are priced out of line, but I seem to be the only one these days.
out of the market To no longer have commitments in the market. To move to the sidelines. For example, Until we get a pullback, I'm out of the market.
out of the name To no longer hold a position in a particular stock. Usually implies a lack of short term interest in the stock as well. For example, Here's the tag ends of my ZVZZT order, then we're out of the name.
out on the balance A term used to indicate that a customer has been released from further obligation regarding a cancelled order. For example, ZVZZT, you bought 10,000 at $25.30 too late to cancel, you're out on the balance of 15,000.
out there Industry jargon meaning "in the market." For example, ZVZZT feels a little heavy. There's definitely size for sale out there.
out trade A trade that cannot be cleared because there is a discrepancy in the information submitted by the parties to the transaction. Also called a trade break.
outperform To beat either a particular benchmark or general expectations.
outright Describes shares purchased in a cash account.
outright quote A quote that contains all of the digits, not just the fractions or decimals. An example would be XYZ is $50.50-$50.75, 20,000 by 50,000.
Outside Board An historic slang term for the aggregate of CURBSTONE BROKERS in New York City.
outside broker Historically, referred to any broker who was not a member of an organized exchange. Basically, a dealer in unlisted securities. Often a curbstone broker.
outside market 1. Quotes that are away from the best bid or the best ask. 2. Originally referred generally to any stock market other than the New York Stock Exchange, but especially to the aggregate of CURBSTONE BROKERS in New York City. Later referred more specifically to the OVER-THE-COUNTER MARKET.
outside of us Describes a competing buyer (seller) outside of the control of your execution trader. For example, ZVZZT, it looks like there's a size buyer outside of us. Do you want to stay with it up here?
outside of you 1. Trader's lingo used to indicate the status of another order being worked on the floor of an exchange at the same price as your order. For example, XYZ, there's 25,000 to buy outside of you. We're going along. See also MATCHED ORDERS. 2. Trader's lingo used to indicate the status of another order being worked by your execution trader at the same price as your order. For example, ZVZZT, I catch 25,000 to buy outside of you. He wants to go along.
outside stock Originally referred to any stock that was not listed on an organized exchange. Later referred more specifically to stocks that traded in the over-the-counter market. See also OUTSIDE MARKET.
outsize the book To SHUT OUT THE BOOK by executing a block trade on the floor of an exchange that is larger than the aggregate size of the orders held on the specialist's book at the execution price. In such a case, size precedence outweighs time precedence.
outsourced trading A situation in which an institutional investor who does not wish to conduct trading operations in house instead employs the services of a third party trading desk.
outstanding shares Stock held by investors. Includes officers and insiders as well as the general public.
over the day A term used to stipulate that a not held order should be worked by the trader from the market opening (or from the time entered) until the market close. May also indicate that the order should be a TIME WEIGHTED AVERAGE PRICE ORDER (TWAP ORDER) or a VOLUME WEIGHTED AVERAGE PRICE ORDER (VWAP ORDER). For example, ZVZZT, take 250,000 for sale. TWAP it over the day please.
overbought Describes a stock whose price has risen too far, too fast, from a technical perspective. Implies that a pullback is expected.
overextended Describes a trader who has made more commitments than he can safely satisfy.
overhang A situation in which the price of a stock is relatively weak because a large block is for sale, or is rumored to be for sale. For example, Somebody needs to take down that piece in ZVZZT and get rid of this overhang.
overlap the market To purposely create a crossed market internally by simultaneously offering stock on the best bid and bidding for stock at the best ask. Has been done by dealers looking to attract customer order flow. For example, I’ll make ZVZZT 3/8 at a quarter, 25 up for anybody … who wants to play? See also LOCK A STOCK.
overnight position The inventory of a stock retained by a dealer at the end of the trading day.
overperform To beat either a particular benchmark or general expectations. To outperform.
overreaction hypothesis The hypothesis that traders tend to overreact to new market information causing exaggerated short term price movements and subsequent corrections.
oversold Describe a stock whose price has fallen too far, too fast, from a technical perspective. Implies that at bounce is expected.
overstay the market To fail to close a position near the point of profit maximization. For example, It looks like I might have overstayed my welcome in ZVZZT. I'm betting we get another bounce soon though.
over-the-counter market (OTC market) A decentralized market for stocks that are not listed on an organized exchange. Comprised of a network of geographically dispersed broker/dealers who negotiate trades directly with one another through computers or over the telephone. The term probably originated from the counters in private banking houses where investors historically transacted securities business. However, the over-the-counter stock market in the United States really became a competitive force after the telephone gained widespread acceptance in the 1880s. For the first time, broker/dealers and their customers could effectively communicate without needing to congregate. The market was further enhanced by the formation of the National Quotation Bureau in 1913 whose Pink Sheets publication greatly improved visibility. This network of wire houses, investment banks, wholesalers, and retail firms continued without significant structural modification until NASDAQ was created in 1971. Currently, the most prominent quotation aggregators in over-the-counter market are OTC Markets Group and the OTC Bulletin Board.
over-the-counter market maker A trader or firm that specializes in making markets in stocks that are not listed on an organized exchange. See also NASDAQ MARKET MAKER.
over-the-counter stock A stock that is not listed on an organized stock exchange.
over-the-counter trading Trading that takes place in offices rather than on an organized exchange.
overvalued Describes a stock that is perceived to be expensive relative to one or more valuation metrics. For example, XYZ is seriously overvalued here. I'm a seller.
own 'em Industry term meaning "fill the entire buy order at the stated price." For example, ZVZZT, work 100,000 to buy with a $25.50 top, but I'd own 'em at $25 the figure.
Copyright 2016 by Brian W. Leite. All rights reserved. Reproduction of all or part of this dictionary without explicit permission is prohibited..