Get an overview of financial terms and their definitions.
The Organisation for Economic Co-operation and Development (OECD) is an international organization that promotes economic and social well-being around the world. It was founded in 1961 and is headquartered in Paris, France. The OECD is made up of 36 member countries, which are primarily developed countries, but also include a few emerging economies.
An offer is a proposal from a seller to sell a product or service at a specified price. In securities trading, an offer is often expressed as an "ask," which is the price at which a seller is willing to sell a particular security. In an auction-style market, such as a stock exchange, offers are made by sellers and paired with bids made by buyers. The lowest ask and the highest bid at a given time make up the "bid-ask spread," which is the difference between the prices at which buyers are willing to buy and sellers are willing to sell. The ask price is typically higher than the bid price, and the difference between the two is called the "spread."
Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date. A call option gives the holder the right to buy the underlying asset; a put option gives the holder the right to sell the underlying asset. Options are often used to hedge against potential price movements in other assets, or to speculate on price movements.
Off the Run
In finance, "off the run" refers to securities that have not been issued most recently. In the case of government bonds issued every year, for example, the most recently issued bond would be considered "on the run," but all previous bonds would be considered "off the run." Due to their limited trading, off-the-run securities are usually considered less liquid than on-the-run securities.
On the Run
"On-the-run" is a term used in the bond market to refer to the most recently issued bonds in a particular series or issuer. On-the-run bonds are typically the most liquid and widely traded bonds in a given market, and they are usually considered to be the benchmark or reference bonds for that market.
Out Off The Money (OTM)
In finance, an option is considered to be out of the money if the current market price of the underlying asset is lower than the strike price for a call option, or higher than the strike price for a put option. Out-of-the-money options have no intrinsic value, because the holder of the option is not entitled to buy or sell the underlying asset at a price that is different from the current market price.
Over The Counter Market (OTC)
The OTC (over-the-counter) market is a decentralized market where financial instruments are traded directly between two parties without a central exchange. Alternatively, it is known as the "off-exchange" market. The OTC market is typically facilitated by market makers, who act as intermediaries between buyers and sellers and help match buyers and sellers.