Glossary
- N, O
Naked Call
A
call option where the writer is not short the underlying security.
Naked Put
A
put option where the writer is not long the underlying security.
Neckline
A
trendline drawn along the reaction lows of a head and shoulders top or
the rally peaks of a head and shoulders bottom.
When
two or more averages, indices or indicators fail to show confirming
trends.
Neural
Network
An
artificial intelligence program that is capable of learning through a
training process of trial and error.
Non-confirmation
A
market is said to be "In gear" when most averages and
indicators that form a part of it confirm successive highs or lows.
For example, when the Dow Jones Industrial Average (DJIA) makes
new highs, but the advance/decline (A/D) line does not, a
non-confirmation is said to occur.
If other indicators or averages also fail to confirm, conditions
are regarded as bearish until the non-confirmations are cleared up, and
vice versa.
O
OAS
Option-adjusted
spread.
Odd
Lots
Units
of stock of less than 100 shares; these do not customarily appear on the
tape.
Odd-Lot
Shorts
Odd
lots that are sold short. Since
odd lots are usually the vehicle of uninformed traders, a high level of
odd-lot shorts in relation to total odd-lot sales often characterizes a
major market bottom. A low
level of odd-lot shorts compared with total odd-lot sales is a sign of a
market top.
Offer
That which shows one's desire to sell a commodity at a given price; opposite of bid.
On
Balance Volume (OBV)
On
Balance Volume is an indicator developed by Joe Granville. OBV is
calculated by starting with an arbitrary number. If the next period is
up the volume for that period is added to the starting point and vice
versa. The OBV then becomes a cumulative running total of this
calculation. OBV is interpreted using divergence analysis as well as
other trend determining techniques such as trendline and moving average
analysis.
Opening
Range
The
range of prices that occur during the first 30 seconds to fifteen
minutes of trading, depending on the preference of the individual.
Option
The
right to buy or sell specific securities at a specified price within a
specified time. A
"put" gives the holder the right to sell the stock, a
"call" the right to buy the stock.
In recent years options on specific stocks have been listed on
several exchanges, so that it is now possible to trade these instruments
in the same way that the underlying stocks can be bought and sold.
Oscillator
An
indicator used to identify overbought and oversold price regions.
Out-of-the-Money Option
Condition
where an option has no intrinsic value.
Out Trade
A mismatched trade between two traders in the pit, which is settled the next day.
Outside
Day (Bar)
A
day in which the trading range completely encompasses that of the
previous session. It is often a signal that market psychology has
changed and therefore represents a short-term reversal signal. Outside
“days” (bars) can also be observer for Intraday, weekly and monthly
data.
Overbought
Condition
A
high momentum or oscillator reading that indicates prices have moved too
far from the norm. i.e. that the probabilities favor a trend reversal.
Oversold
Condition
A
low momentum or oscillator reading that indicates prices have moved too
far from the norm. i.e. that the probabilities favor a trend reversal.
Overbought/Oversold
Indicator
An
indicator that attempts to define when prices have moved too far and too
fast in either direction and thus are vulnerable to a reaction.
Over-the-Counter
(OTC) Market
An informal collection of brokers and dealers. Securities traded include almost all federal, state, municipal, and corporate bonds and all widely owned equity issues not listed on the stock exchanges.
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