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Orders, Execution & Market Structure

Off-Market Transfer

A movement of securities between demat accounts that is settled directly through the depository rather than through an exchange trade.

Test: securities move by depository instruction without an exchange trade and without clearing corporation involvement qualitative
Market Basics & Instruments

Offer for Sale

A sale of shares by existing shareholders to the public, in which the proceeds go to those sellers and not to the company.

Test: the shares offered already exist and the issuer receives none of the proceeds qualitative
Indian Market, Regulation & Taxation

Old Tax Regime

India's original personal income tax structure, with higher slab rates but a wide range of deductions and exemptions.

Taxable Income = Gross Income - Deductions and Exemptions claimed; tax computed on the old slab schedule
Market Psychology & Behavioural Finance

Omission Bias

Judging harmful actions as worse than equally harmful failures to act.

Test: an identical outcome is judged more acceptable when it results from inaction than from action qualitative
Indicators & Oscillators

On-Balance Volume

A running total that adds a period's volume when the close rises and subtracts it when the close falls.

OBV = Previous OBV + Volume if Close > Previous Close; - Volume if Close < Previous Close; unchanged if equal shares
Derivatives, Futures & Options

Open Interest

The total number of derivative contracts that remain open and have not been closed or settled.

Open Interest rises when a new buyer and a new seller create a contract, and falls when both sides close shares
Corporate Actions, Dividends & Governance

Open Market Buyback

A buyback in which the company purchases its own shares on the exchange over a period, rather than through a tender offer.

Test: shares are acquired through normal market purchases within a stated price ceiling and time window qualitative
Economy, Macro & Market Cycles

Open Market Operations

A central bank's buying or selling of government securities to add or remove liquidity from the banking system.

Test: the central bank transacts in government securities with the market, changing system liquidity by the transaction value ₹ crore
Corporate Actions, Dividends & Governance

Open Offer

A mandatory offer to buy shares from public shareholders, triggered when an acquirer crosses a control threshold.

Trigger: acquiring 25% or more of voting rights, or acquiring control; the offer must be for at least 26% of the expanded voting capital qualitative
Orders, Execution & Market Structure

Open Order

An order that has been accepted by the exchange but not yet executed, cancelled or expired.

Test: the order rests in the book with unexecuted quantity remaining and validity not yet lapsed qualitative
Technical Analysis & Chart Patterns

Open, High, Low, Close

The four prices that summarise a trading period: the first trade, the highest, the lowest and the last.

Range = High - Low; Change = Close - Open; True Range also considers the previous Close
Market Basics & Instruments

Opening Price

The price at which a security's first trade of the session is executed, determined in India by a pre-open call auction.

Opening Price = the price in the pre-open auction that maximises executable quantity
Financial Statements & Accounting

Operating Cash Flow

The cash generated by a company's core business activities during a period, after working capital movements and taxes paid.

Operating Cash Flow = Net Profit + Non-Cash Charges - Increase in Working Capital - Taxes Paid ₹ crore
Financial Statements & Accounting

Operating Expenses

The costs of running the business that are not direct costs of production, such as employee benefits, selling costs and administration.

Operating Expenses = Employee Benefits + Selling and Distribution + Administrative and Other Expenses ₹ crore
Fundamental Analysis & Valuation

Operating Leverage

The degree to which a company's fixed costs amplify the effect of a revenue change on its operating profit.

Degree of Operating Leverage = Percentage Change in Operating Profit / Percentage Change in Revenue ratio (x, times)
Fundamental Analysis & Valuation

Operating Margin

Operating profit as a percentage of revenue, showing what the core business keeps before interest and tax.

Operating Margin = Operating Profit (EBIT) / Revenue x 100 %
Financial Statements & Accounting

Operating Profit

Profit from the core business after all operating costs including depreciation, but before interest and tax.

Operating Profit (EBIT) = Revenue - Operating Expenses - Depreciation and Amortisation ₹ crore
Market Psychology & Behavioural Finance

Optimism Bias

The tendency to expect better outcomes for oneself than the base rate justifies.

Test: personal probability estimates for favourable outcomes exceed the observed frequency in the relevant population qualitative
Derivatives, Futures & Options

Option

A contract giving its buyer the right, but not the obligation, to buy or sell an underlying at a set price by a set date.

Test: the holder may exercise or let the contract lapse; the writer must perform if the holder exercises qualitative
Derivatives, Futures & Options

Option Chain

A table listing all available strikes for an underlying and expiry, with prices, volumes and open interest for calls and puts.

Test: the display lists every listed strike for one expiry, with call data on one side and put data on the other qualitative
Derivatives, Futures & Options

Option Intrinsic Value

The value an option would have if exercised immediately, which is never less than zero.

Call Intrinsic Value = max(Spot - Strike, 0); Put Intrinsic Value = max(Strike - Spot, 0)
Derivatives, Futures & Options

Option Premium

The price paid by an option's buyer to its writer for the rights the contract confers.

Premium = Intrinsic Value + Time Value; Total Cost = Premium x Lot Size
Derivatives, Futures & Options

Option Writer

The party that sells an option and takes on the obligation to perform if the holder exercises.

Test: the party received the premium at inception and must deliver or take delivery at the strike if assigned qualitative
Orders, Execution & Market Structure

Order Book

The exchange's live record of all unexecuted buy and sell limit orders in a security, ranked by price and then by time.

Test: an order rests in the book until it is matched, modified, cancelled, or expires at the session close qualitative