0800 118 100


Homepage  Dictionary  Letter O 

Dictionary

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

Letter O

  • Operational effectiveness

    A condition of the aliquot effectiveness of primary markets is the operational effectiveness of secondary markets. A market is said to be operationally effective if only a small difference eyxists between the return on the sale of securities and the costs of buying the security, i.e. if transaction costs are low. This difference, which is called the spread in the case of market makers, is the profit earned by financial intermediaries. At any given moment a market maker quotes the price at which he is willing to buy a financial instrument (bid price) and the price at which he is willing to sell the same financial instrument (asked price). The spread represents the difference between these two prices.

  • Optimal portfolio

    An optimal portfolio is a portfolio that gives the greatest ratio of additional return (= expected return – interest) to risk. We can combine this portfolio in an arbitrary ratio with a risk-free investment and we will always attain the same ratio of additional return to risk.

  • Options

    Options, unlike forwards, futures and swaps, give their owner the right, rather than the obligation, to buy or sell a certain asset by a certain date or over a certain period of time in the future at an agreed price (exercise price, strike price), with the seller of the option being obliged to sell or buy the given asset under the same conditions. The conditions of the contract are specified in detail within an agreement. Options are traded on OTC (over-the-counter) market as well as on stock exchanges. An option may be divided into options for spot assets (the owner of the option has the right to buy or sell the given asset) according to the type of underlying asset or futures options (the owner of the option has the right to buy or sell the given asset via futures).

Subnavigation

Important links

Contact Us

In SR

0800 118 100

From abroad

BIC / SWIFT code: KOMBSKBAXXX
(KOMBSKBA)


Searching

Main navigation