Login

Don't have an account? Register now
Register
Your Email Address
You are

Already have an account? login
Forgot password? Click here
Password Reset

Already have an account? login
Password Reset
Thank you! Further instructions were sent to your email. Please, check your mailbox to proceed.

Glossary

Glossary

All | # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are 7 terms in this directory beginning with the letter O.
Open-end Fund
An open-end fund, or a mutual fund, generally sells as many shares as investor demand requires. As money flows in, the fund grows. If money flows out of the fund the number of the fund's outstanding shares drops. Open-end funds are sometimes closed to new investors, but existing investors can still continue to invest money in the fund. In order to sell shares an investor generally sells the shares back to the fund. If an investor wishes to buy additional shares in a mutual fund, the investor generally buys newly issued shares directly from the fund.

Option Pool
The number of shares set aside for future issuance to employees of a private company.

Original Issue Discount
OID. A discount from par value of a bond or debt-like instrument. In structuring a private equity transaction, the use of a preferred stock with liquidation preference or other clauses that guarantee a fixed payment in the future can potentially create adverse tax consequences. The IRS views this cash flow stream as, in essence, a zero coupon bond upon which tax payments are due yearly based on "phantom income" imputed from the difference between the original investment and "guaranteed" eventual payout. Although complex, the solution is to include enough clauses in the investment agreements to create the possibility of a material change in the cash flows of owners of the preferred stock under different scenarios of events such as a buyout, dissolution or IPO.

OTC
Over-the-Counter. A market for securities made up of dealers who may or may not be members of a formal securities exchange. The over-the-counter market is conducted over the telephone and is a negotiated market rather than an auction market such as the NYSE.

Outstanding Stock
The amount of common shares of a corporation that are in the hands of investors. It is equal to the amount of issued shares less treasury stock.

Over-subscription
Occurs when demand for shares exceeds the supply or number of shares offered for sale. As a result, the underwriters or investment bankers must allocate the shares among investors. In private placements, this occurs when a deal is in great demand because of the company's growth prospects.

Over-subscription Privilege
In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not purchased.