Glossary

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• Opening purchase A transaction whereby the buyer becomes the holder of an option.
• Opening sale A transaction whereby the seller becomes the writer of an option.
• Operating Cycle The length of time from the commitment of cash for purchase until the collection of receivable resulting from the sale of goods or services.
• Operating profit margin Operating profit for a certain period is calculated by dividing the difference between Net Sale & Net Expenditure by Net Sales. Operating profit margin indicates how effective a company is at controlling the costs and expenses associated with their normal business operations. 
• Order Book When the underwriter refers to how well orders are building for an IPO or a secondary deal, he means the book or listing of buy orders from investors. The book for a deal can be many times oversubscribed. In fact, an oversubscribed deal is desired by both underwriters and investors, because it means that there will be an initial pop in the stock when it begins trading and subsequent aftermarket orders.
• Order point The quantity to which inventory must fall in order to signal that an order must fall in order to signal that an order must be placed to replenish an item.
• Out-of-the-money option An option that has no intrinsic value. That is an option which theoretically, it would not be worthwhile to exercise immediately e.g. a call option whose exercise price is above the current underlying share price or a put option whose exercise price is below the current underlying share price.
• Over allotment This is the fancy name for the green shoe, the underwriting agreement which allows the underwriters to buy up to an additional 15% of shares at the offering prices for a period of several weeks after the offering.
• Oversubscribed When an Initial Public Offering has more orders than there are shares available it is said to be oversubscribed. Many underwriters like to see a book several times oversubscribed because they know that investors inflate the size of their indications of interest. When a book is grossly oversubscribed it is said to be a hot deal.