Forex Glossary (O)

Commonly used forex terms and their definitions.

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Odd Lot - A non standard amount for a transaction.

Offer - The price, or rate, that a willing seller is prepared to sell at, it is also the best price available to a trader to buy at.

Offset - The closing-out or liquidation of an open position.

One Cancels the Other Order (O.C.O. Order) - A contingent order where the execution of one part of the order automatically cancels the other part.

Open Position - Any deal which has not been settled by physical payment or reversed by an equal and opposite deal for the same value date.

Order - See Market Order. During times of extreme volatility it can be difficult or impossible to execute orders.

Oscillator - An technical 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.

Overbought - A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp advance from 1.2700 to 1.3200 in 2 weeks might lead a technician to believe that an instrument is overbought. Or an instrument is sometimes considered overbought when the Stochastic Oscillator exceeds 80 and when the Relative Strength Index (RSI) exceeds 70. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the instrument has risen too far too fast and might be due for a pullback.

Overnight Limit - Net long or short position in one or more currencies that a dealer can carry over into the next dealing day. Passing the book to other bank dealing rooms in the next trading time zone reduces the need for dealers to maintain these unmonitored exposures.

Overnight - A deal from today until the next business day.

Oversold - A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp decline from 1.3200 to 1.2700 in 2 weeks might lead a technician to believe that an instrument is oversold. Or an instrument is sometimes considered oversold when the Stochastic Oscillator is less than 20 and when the Relative Strength Index (RSI) is less than 30. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.

Over The Counter (OTC) - Used to describe any transaction that is not conducted over an exchange.


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