Offer price

The price at which you can buy a specified instrument.

For Forex trading, it is the price at which you can buy the trade/base currency (quoted first) by selling the price currency of the pair.

For example, if you buy EURUSD 100,000, you are buying Euro 100,000 against US dollars.

One-cancels-other (O.C.O.) order

One-cancels-other orders really consist of two orders. If either of the orders is executed because its market conditions have been met, the related order is automatically cancelled.

Open position

A position in a currency that has not yet been offset.

For example, if you buy USDJPY 100,000, you have an open position in USDJPY until you offset it by selling USDJPY 100,000.


A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time or on a specific date.

Options are formally referred to as Options contracts.

Options are traded for almost all financial instruments, including Stocks, Futures, and currencies. Many Options are traded on public exchanges, but a significant volume of Options trading, especially for the Forex market, takes place over the counter (OTC).

Options can be used for a wide range of purposes, but generally, they are most commonly used in two ways.

First, a party can purchase a put or call Option as a tool for outright speculation, that is, buying an Option in the hope that the underlying instrument will rise or fall dramatically in price.

Secondly, a party may purchase an Option as a hedge in order to protect from losses or protect unrealised profits in the underlying instrument.

Option buyers take a limited risk (the cost of the Option, or its premium) with the potential for nearly unlimited profit.

Sellers of Options have a different strategy and are taking unlimited risks for the sake of a limited profit, unless they are selling covered Options, in which a position in the underlying instrument guarantees against a loss in the Option premium (but does not guarantee against a loss in the underlying instrument).


A trade order to buy or sell a specified instrument. Limit and Stop orders are the main types.

Order duration

The duration for which the order is valid. See Day Order (DO) and Good till Cancelled (GTC) for details.

Other collateral

Instruments that are not tradable online. For example, bonds and other positions that are transferred from another bank.

Out of the money

An Option that has no intrinsic value.

If an Option expires out of the money, it is worthless.

An out-of-the-money Option is a call Option with a strike price that is higher than the current market level, or a put Option with a strike price that is below the current market price.


A particular price level that, if hit during the life of an Option, immediately invalidates the Option.

Over the counter (OTC)

A trade that is negotiated between two parties without the use of an exchange.

For example, a security that is not traded on an exchange is known as an OTC security. It is a market where commodities and instruments are traded directly between two parties, for example, between an investment bank and a client.

This is different from trading on a public exchange, which is an open market place.

Over-the-counter products can be tailored to individual clients whereas exchanges trade standardised contracts.

A large over-the-counter market has grown up in, for example, Forex and Forex Options.