OFEX

OFEX is a market providing a share-trading platform for unlisted and unquoted securities, off-exchange. The OFEX market is operated in the UK by OFEX plc.

Offering Circular

A term frequently used interchangeably for a prospectus or offering memorandum.

Official List

The main market of the London Stock Exchange. Also referred to as the ‘Full List’.

Open Offer

In the UK, an offer of securities, not being by way of a rights issue, to existing shareholders of an issuer.

Open Order

An order by a customer to a broker/dealer to buy or sell a security that remains in effect until either executed or cancelled by the customer.

Opening Price

The price at which a security trades at the beginning of a day or, in the case of an initial offering, at the commencement of its first day of trading.

Operating Ratio

A company’s operating expenses divided by its operating revenues, or, more generally, any of a number of ratios measuring a company’s operating efficiency, such as sales to cost of goods sold, net profits to gross income, operating expenses to operating income, and net profit to net worth.

Option

A contractual right to purchase or sell something (such as stock) at a future time or within a specified period at a specified price.

Optionee

The holder of an option.

Organisational Chart

A graphic representation of how authority and responsibility is distributed within a company or other organisation.

Organisational Meeting

In the public offering process, the first meeting after the underwriter or underwriters have been selected, attended by representatives of the issuer, the underwriters, their respective lawyers and the issuer’s accountants. The initial portion of the meeting is typically spent reviewing the timetable for the proposed public offering, with the remainder being used to familiarise the underwriters and their lawyers with the company’s business.

OTC Bulletin Board (or Nasdaq Bulletin Board)

A quotation service that displays real-time quotes, last-sale prices, and volume information in the over-the-counter equity securities. The OTC Bulletin Board is operated by the Nasdaq Stock Market, Inc., but at present is not part of the Nasdaq Stock Market. The OTC Bulletin Board is scheduled to be replaced by the Bulletin Board Exchange (or BBX) in 2003 as part of a set of proposals (including qualitative listing standards) to increase the quality of the market. See ‘Over-the-Counter’.

Out-of-the-Money Option

An option is out-of-the-money if the strike price of the option is higher than the market price of the underlying security or commodity.

Outside Director

See ‘Independent or Outside Director’.

Outstanding Stock

The shares of a corporation’s stock that have been issued and are in the hands of the public. Also called ‘shares outstanding.’

Over-allotment Option

The option granted to an underwriter in a public offering giving it the option, for a period of anywhere from 15 to 45 days (usually 30 days) after the effective date, to purchase additional securities from the issuer (usually up to 15% of the shares being sold) at the initial price to the public, for the purpose of covering over-subscriptions for the securities. See ‘Green Shoe’.

Overhang

A large number of securities that may be released into the market, putting downward pressure on the trading price of the shares. In connection with a stock offering, underwriters try to minimize the amount of overhang to promote confidence in the price at which the shares are initially offered to the market. Also known as ‘Market Overhang.’

Over-the-Counter (OTC)

A security that is not traded on an exchange, usually due to an inability to meet listing requirements. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone. Also called ‘unlisted. ‘Also, the computer and phone system through which over-the-counter (as well as listed) securities are traded. See ‘OTC Bulletin Board’.