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Glossary of Investment Terms (O)

The following are useful investment terms beginning with ‘O’

Occupational Pension Scheme
This is a type of pension scheme provided by an employer for its employees. The vast majority of these schemes are either "defined benefit" or "defined contribution".

Off Balance Sheet
These are assets or liabilities which do not appear on a traditional company balance sheet, e.g. leasing obligations.

This is the price at which a third party will "offer" to buy an asset - also known as the "ask" price.

Offer To Bid
A comparison between the purchase price of an asset i.e. the offer, against the selling price i.e. the bid.

Offer To Offer
A price comparison method which compares the price at which an asset was acquired, against the cost to buy in the market today.

Off Market
Relating to a transaction which occurs outside a formal market - e.g. transactions in unlisted securities or transactions involving listed shares which were not executed on a stock exchange.

In simple terms this refers to anywhere outside of the authority of the Inland Revenue.

Offshore Sector
A group of funds all registered outside the UK.

The Occupational Pensions Advisory Service - an independent organisation which gives free advice to members of the public who have a problem with an occupational pension scheme or a personal pension scheme. The advice given is general rather than specific investment advice.

Open Ended Investment Company (OEIC)
OEICs are now more common in the UK than ever before, having been very popular in Europe for many years. They are effectively open-ended investment funds which are able to create new shares of cancel existing shares in issue.

Opening Price
The first quoted price of a stock or share as the market opens.

Open Market Option
An option to move the value of your pension fund at retirement to any insurance company to purchase a pension income known as an Annuity. Normally used to gain a higher annuity rate.

Occupational Pensions Regulatory Authority.

A form of risk management aimed at optimising the performance of your investment funds, by creating a mix to give maximum potential return, or minimum potential loss.

Optimised Portfolios
These are portfolios where the spread of investments are optimised to any one investment objective. Traditionally fund managers offer a range of investment funds with exposure to a wide array of investments and risk profiles.

An option but not the obligation to buy or sell an asset in the future.

Ordinary Residence
For the purposes of taxation, an individual may be ordinarily resident in the UK although he or she is not physically resident in a particular tax year .The term 'ordinary residence' is broadly equivalent to habitual residence. If an individual is a resident in the UK year after year, he or she is ordinarily resident here and liable for UK tax.

Ordinary Shares
A class of share commonly associated with stock market investments in the UK.

Outperformance can be measured in real terms or relative to any particular benchmark.

Where a pension arrangement has assets which exceed those required to meet its liabilities.

Having a greater exposure to a particular sector or stock in an investment portfolio compared with a neutral or benchmark position (As opposed to Underweight).

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