Glossary – O
Offer: See Ask.
On Balance Volume (OBV): The idea behind the OBV is that volume precedes price. OBV is a simple indicator that adds a period’s volume when the close is up and subtracts the period’s volume when the close is down. A collective total of the additions and subtractions in volume form the OBV line. This line can then be compared with the price chart of the underlying security to look for divergences or confirmation.
Open Interest: The number of options or futures contracts that are still unliquidated at the end of a trading day. A rise or fall in open interest shows that money is flowing into or out of a futures contract or options, respectively. In futures markets, rising open interest is considered good for the current trend.
Oscillator: An indicator that determines when a market is in an overbought or oversold condition. When the oscillator reaches an upper extreme, the market is overbought. When the oscillator line reaches a lower extreme, the market is oversold.
Over The Counter (OTC): A market that is not geographically centralized like the trading floor of the NYSE. OTC securities are traded through a telephone and computer network.
Overbought: A technical scenario that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be found by analyzing the chart pattern or with indicators such as the Relative Strength Index (RSI). It is important to understand that overbought is not the same as being bearish. It merely suggests that the stock has risen too far too fast and might be due for a pullback.
Oversold: A technical scenario that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be found by analyzing the chart pattern or with indicators such as the Relative Strength Index (RSI). It is important to understand that oversold is not the same as being bullish. It merely suggests that the stock has fallen too far too fast and might be due for a rally.
Outside Day: When the high is above the previous day’s high and the low is below the previous day’s low.